Smart Taxes: An Open Invitation To Join The Pigou Club

Many economists favor higher taxes on energy-related products such as gasoline, while the general public is more skeptical. This essay discusses various aspects of this policy debate. It focuses, in particular, on the use of these taxes to correct for various externalities - an idea advocated long ago by British economist Arthur Pigou. As an economics educator, the author has always been fascinated by topics about which there is a large gap between the beliefs of economists and those of the general public.