THE EFFERVESCENT Alfred E. Kahn has an answer to the question about unleaded gasoline. As you may recall from our last exciting installment, the price gap between leaded and unleaded gasoline is widening steadily. That tempts people with new cars to use the cheaper leaded gas, and the lead destroys the catalyst that controls the pollution in the car's exhaust. Mr. Kahn's solution is simplicity itself. He suggests raising the tax on leaded gasoline and lowering it on unleaded gasoline. Mr. Kahn is more rational than a man in his position, as adviser to a president, can safely afford to be.
Perhaps he was not following the energy bill or the tax-reform bill in the past Congress. If the administration adopts the Kahn plan, recent history offers a pretty clear view of the rest of the story.
Mr. Kahn will draft a one-page bill to raise the tax on the one kind of gas and lower it on the other. But the White House political staff will immediately point out that his draft fails to address profound questions of social equity. What about the poor, who buy unleaded gas because it's cheaper? What about young people driving old cars? What about the inhabitants of lower Louisiana, who need their outboard motors to get around the swampss and bayous? There will have to be a rebate formula. It will take into account each family's income, the number and ages of its various automobiles and the distance from its front door-step to the bus stop. The legislative draftsmen at the Energy Department have had a lot of experience with that kind of formula, and eventually the 53-page bill will be sent to Congress.
The House will receive the bill without much warmth, remembering the exceedingly modest support the Carter administration gave its own gasoline tax the last time. But the members of the Ways and Means Committee are good sports, and they will move it along in due course. The real fun will start when it arrives at the Senate Finance Committee. First the committee will add tuition tax credits for families with children in private schools. Then, warming to its work, it will vote import quotas on straw hats from Hong Kong, beef from Argentina and automobiles from Japan. At that point Chairman Russell Long (D-La.) will complain publicly that the committee is running out of control. As if to prove the accusation, it will then add several obscure but pregnant provisions that seem to refer to the tax treatment of certain oil wells in the Gulf states. When the 268-page bill comes to the Senate floor, the administration will narrowly manage to defeat an amendment to improve business confidence by repealing the capital-gains tax and returning to the gold standard.
When the bill gets back to the House, liberal Democrats will denounce it as an outrage and declare all-out war. They will succeed in getting all references to gasoline taxes and the environment stricken-but not, unfortunately, the import quotas or the obscure tax changes for the oil wells. By the time the staff of the Joint Committee on Taxation has straightened out a few technical difficulties, the bill will run to 417 pages and Ralph Nader will be calling on President Carter to veto it. But the feeling at the White House will be that Congress has worked so long and hard on the bill that he has no choice but to sign it. By the time the bill is finally enacted, late in the autumn of 1980, Mr. Kahn might well wish he had chosen some other instrument of policy.
It's a pity that things will work out that way, because a 10-cent increase in the tax on leaded gas is the quickest and most effective way to discourage people from using it.But fiddling with taxes to influence social behavior is a device that has been overused in recent years. The administration could afford to try it again this winter only if it had assurance of a wide consensus in Congress to support it, move it quickly, keep it simple and exclude any amendments. Since there is no sign of anything close to a consensus, the country is evidently going to have to live for a while with a wide spread between leaded- and unleaded- fuel prices. Perhaps it's a public risk that is, on balance, less risky than the solution.