The always excellent Don Boudreaux has me scratching my head a little today. He’s talking about his opposition to a raise in the Federal Gas Tax:

Because I see no good reason to believe that the market price of gasoline is chronically too low – or, more precisely, because I see no good reason to believe that the current price of gasoline, which already includes substantial excises taxes, is too low – I oppose further hikes in the tax on gasoline as a means of “correcting” a presumed, but wholly unproven, market failure.

What I’ve not seen in this discussion is the part of the argument that appears obvious to me, that of negative externalities. As far as I can see roughly the amount raised by the gas tax gets spent on the highways. Yet there are negative externalities over and above those direct costs, most obviously noise and air pollution. A “good” system of excise taxes, in so far as one is possible, would compensate those who suffer these costs at the expense of those who cause them. To the extent that there are such uncompensated takings this would indicate a rise in gas taxes and a reduction in others on those who suffer the takings.
This probably would not result in a rasie in the federal tax however, as pollution by motor vehicles is a local thing (pace CO2 and GW of course) so I guess I would be advocating a large raise in gas taxes in the LA basin, for example, to be balanced by a reduction in property taxes. Thinking on that I can see that the local jurisdictions in the US are probably too small for that to make sense, and California is too large.
Ho Hum, yet I still think that a case can be made for certain excise taxes being too low: they do not compensate sufficiently for the external costs of some activities.