@pkrugman.bsky.social while a VAT isn’t a skewing trade (favoring domestic producers), it is lowering consumption and will thereby reduce imports (as well as domestic production). In theory it therefore impacts the trade balance. Maybe that’s the convoluted argument behind the tarrifanatics.

… is where the argument falls in place.

Is the congestion externality reason enough? Sure, those who ride busses suffer from congestion without causing it. Bikers? Not sure it is any better with fewer cars driving faster. As for the drivers, they contribute to and pay for the externality in equal parts. Environmental externalities …