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Tuesday, October 10, 2006

Stockholm's Congestion Tax

Sweden's new center-right government has decided to implement a congestion tax:

Sweden watch, by Andrew Leonard: ...The recent electoral victory by a center-right coalition [in Sweden] resulted in many predictions of a swift turn to Milton Friedmanism... But take a look at one of the first major decisions by the new government, ... the reinstitution of a congestion tax in Stockholm. Since members of the coalition campaigned against the tax, and since in a referendum on the tax held at the same time as the general election the majority of voters who lived outside of Stockholm voted against it, the decision came as a bit of a surprise.

Why the change of heart? Simple, really. A trial of the tax conducted for six months earlier this year resulted in lower traffic and cleaner air. Then, after the the trial ended, congestion started to build up again. So, in other words, the tax worked. And in Sweden, whether you're on the right or the left, you like things that work.

The government's plan is to devote revenue from the tax to completing a ring road around the city, which is disappointing to environmentalists. But in the meantime, ... one in five new cars purchased in Stockholm this spring was a "clean car" -- running at least partially on electricity or alcohol -- and thus exempt from the congestion tax.

Perhaps the most telling stat: At the start of the trial, 55 percent of Stockholm residents opposed it. But after a few months sans traffic jams and breathing cleaner air, only 41 percent were against it. ...

    Posted by on Tuesday, October 10, 2006 at 12:03 AM in Economics, Environment, Regulation, Taxes | Permalink  TrackBack (0)  Comments (15)

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