Morocco's Jobless Trap: When High Taxes, Labor Laws, and Corruption Stifle Economic Opportunity

Morocco is a country with such vibrant cities as Fez and Tangier, a diverse geography, a rich culture, a wealth of historic sites, and has been featured in such films as Casablanca and Game of Thrones. Guess what else Morocco has? High unemployment. According to the Moroccan government's Haut Commissariat du Plan, Moroccan unemployment is at 13.3 percent, which is slightly below the 30-year high (see below).

Youth unemployment is even worse, reaching a 25-year high (see below). Sadly, the problem is nothing new. NPR complained about high Moroccan youth unemployment in 2012. So what is causing this increase in unemployment? Sure, there was the COVID pandemic, but unemployment in Morocco is higher now than it was during the pandemic. 

As the International Monetary Fund (IMF) illustrates in its Article IV Consultation report, Morocco has withstood five droughts in six years that have led to production shortfalls of 40 percent. This seems like it explains the problem: lower agricultural output. However, Morocco's agriculture sector contributes about 15 percent to Morocco's GDP. That is a higher percentage, especially considering that high-income countries only have 2 percent of their GDP in agriculture. 

I bring this up because as economies develop and mature, they become less dependent on their agricultural sector. Similar to this recent article from the Institute for Research in Economic and Fiscal Issues (IREF), I argue that Morocco's dependency on agriculture is a larger symptom of government largesse getting in the way of true economic development. 

Taxation. Morocco's corporate tax can reach as high as 35 percent. You can read my analyses on corporate tax here, here, and here as to why that rate is too high. The standard value-added tax (VAT) in Morocco is 20 percent, which is higher than the global VAT average of 15 percent. A high VAT is significant because it reduces disposable income and discourages spending. On top of that, the Moroccan tax system has a narrow tax base and is riddled with tax exemptions that make evasion and avoidance common (Moutii, 2025). 

Government Spending. The good news is that Morocco is working on fiscal consolidation (IMF, p. 10). The bad news is that Morocco's debt-to-GDP ratio is 70.9 percent, which is about 30 percentage points higher than the recommended limit that should not be exceeded on the long-term for developing countries. Whether the Moroccan government can maintain fiscal discipline will determine how much this becomes a factor and avoids heading towards a fiscal cliff similar to that of the United States.

Labor Law Rigidity. The Legatum Institute details in its case study on Morocco that the Moroccan labor market is characterized by a lack of inclusion of women and youth, slow job growth, and low quality of jobs (also read this 2025 World Bank report on boosting the business environment in Morocco). This lack of labor market flexibility is brought on by a quickly growing minimum wage and high overtime costs, regulations that cause redundancies in businesses, rigidity on temporary contracts, and stringent barriers on terminating the employment of workers, all of which contribute to the high cost of labor. Additionally, a skills mismatch and lack of workforce development exacerbate the labor law rigidity (ibid., p. 50).

Corruption. According to Transparency International (TI), Morocco's corruption is worse than the global average. Even worse, its TI Corruption Perceptions Index score has declined since 2018. As I pointed out last year, corruption erodes economic growth. This is due to the fact that corruption impacts business confidence and hinders investment, as is illustrated by over 16,000 enterprises collapsing in Morocco last year. 

Postscript. It is true that there were global challenges such as pandemic and drought. It is also true that Morocco's high unemployment rate is more structural in nature. Punitive corporate taxes, a high VAT rate, and rigid labor laws make it difficult to modernize and diversify the economy. A richness in culture, geography, or global visibility is not going to save Morocco. It is a policy paralysis that will keep employment rates stubbornly high until the Moroccan government removes the barriers to economic prosperity.

No #MeToo for Israeli Women: The International Community Turned a Blind Eye to Hamas' Sexual Violence on October 7

 October 7, 2023, was a horrific day for Israel. A barrage of militant Hamas terrorists crossed into Israeli territory to carry out the worst pogrom against Jews since the Holocaust. Not only was there murder, kidnapping, and torture, but Hamas terrorists also used sexual violence against Israeli women. If this attack had happened in any other country, I imagine that advocates against sexual violence would not have equivocated and would have spoken up right away against such atrocities. However, since the October 7 attack took place in Israel, the "international community" took a different approach. 

In its press release on October 13, 2023, UN Women did not acknowledge the sexual assault of Israeli women and mostly talked about the humanitarian situation in Gaza, which is peculiar since Israeli Defense Forces did not have a physical presence between 2005 and October 23, 2023 when the IDF launched its full-scale incursion in Gaza. It took UN Women nearly two months to issue sort of any condemnation. When it did, UN Women could not help but partake in false equivalence. To its credit, the United Nations did eventually get around to admitting in 2024 that there are reasonable grounds that sexual violence took place in multiple places by Hamas on October 7. 

Neither Amnesty International nor Human Rights Watch (HRW) were much better in terms of being able to unequivocally condemn Hamas. HRW could not sufficiently condemn Hamas for its barbarism shortly after the attack, and did not even address Hamas' sexual violence. It took HRW until June 2024, or nine months later, to come out with a report acknowledging the sexual violence during the October 7 attacks. In contrast, HRW has swiftly condemned the sexual violence in Congo, in the DRC, and Sudan . 

On October 13, 2023, Amnesty International could not clearly criticize what Hamas did without condemning Israel in a manner that was tantamount to victim-blaming. Amnesty International unequivocally and quickly reported on the rapes committed by Tigray fighters in Ethiopia and the gang rapes of Rohingya women in Myanmar without equivocating. In contrast, Amnesty's December 2023 report on what happened on October 7 only confirmed one rape, which as we will see shortly, is an understatement of what happened.

This brings us to the Dinah Project, which is an Israeli group founded to advocate for the victims of conflict-related sexual violence (CRSV) during the October 7 attacks. Last week, the Dinah Project released a report entitled A Quest for Justice: October 7 and Beyond. Not only does this report extensively document over 15 cases of CRSV committed by Hamas and provides a legal framework to hold Hamas accountable. It makes the argument that the acts of CRSV were not individual acts. Instead, the sexual violence was a deliberate, ideologically motivated, and systematic tactic central to Hamas' genocidal goals, something which I have brought up before. 

This blatant one-sidedness is not new. In 1975, the United Nations passed a resolution falsely stating that Zionism is racism. Although the resolution was overturned in 1991, that animus remains to this day. It does not matter that there are actual human rights abuses taking place in the world. Israel is disproportionately vilified with such false accusations as apartheid, occupation, and settler colonialism. A few months ago, I had to refute Amnesty International's claim that Israel was committing genocide (see here, here, and here). 

So why the tempered or delayed responses from human rights organizations? Why are there so many on the Left, the Far Left in particular, who ignore the mounting evidence of sexual violence against Israelis and are incapable of condemning the terrorist group Hamas? Why is Israel subject to such frequent, intense, and disproportionate condemnation while so many of these critics ignore real human rights abuses and oppression? Shortly after the October 7 attacks, I asked myself why the "progressive" Left would be on Hamas' side because it was perplexing to me (see here and here). After examination, I was able to get past why the "progressive" Left would not side with a minority group that has been persecuted for centuries. 

With identity politics leading the way, the "progressive" Left can only see in terms of the oppressor and the oppressed in very black and white terms. For them, Israel is the oppressor. Acknowledging Hamas' usage as a weapon of war would have refuted the oppressor/oppressed dichotomy favored by many international actors. Moreover, the state of Israel is a repudiation of victimhood. Israel shows that a minority as oppressed as the Jews can overcome discrimination, stigma, and genocide to the point of creating a flourishing state. Leftist ideology loses credibility if minorities overcome adversity because it means we humans are not merely victims of circumstances. 

In contrast, the Palestinian cause is the personification of victimhood, which is why the Far Left clings to it so dearly to the point where Hamas can do no wrong and Israeli victims' suffering does not release them of being supposed "oppressors." Pro-Palestinian individuals cannot view Hamas as anything but virtuous. To do otherwise would be admitting that their worldview is not only wrong, but morally depraved. Conversely, if the Far Left has excused the likes of Stalin and Mao Zedong killing millions, why would they have moral qualms with the sexual violence perpetrated by Hamas? 

Anti-capitalist sentiment could explain why the Far Left would defend Hamas rapists and not care about Israeli victims. Earlier this month, the United Nations Human Rights Commission (UNHRC) released a report entitled Forever Occupation, Genocide, and Profit. This UNHRC report was incapable of acknowledging that Hamas started the current war, that they systematically carried out murder and sexual violence, or that there are still hostages. What did the report conclude? "The enduring ideological, political, and economic engine of racial capitalism has transformed the Israeli displacement-replacement economy occupation into an economy of genocide." Much like I argued in 2023, Jews and the state of Israel personify capitalism and all the evils that anti-capitalists see in capitalism.

Whether Israel is viewed as oppressor, capitalist, or rejector of victimhood that the Far Left loves all too much, this is how "human rights advocates" can reach such a level of moral distortion. What Israel represents to these people is so reprehensible that they can contort facts and their perception of current events to believe that rape is resistance. The #MeToo movement died shortly after the October 7, 2023, because of these double standards. Major human rights organizations have failed in their respective missions. It is this overall indifference towards the suffering of Israeli women that caused the Dinah Project to come into being. 

We live in troubled times with anti-Semitism I previously thought was relegated to history books. Yet we are seeing and documenting horrid anti-Semitism in real time. We are seeing that sexual violence does not matter if the victim is Israeli or Jewish. We see that it has lamentably become acceptable to attack and murder Jews across the world in order to "globalize the intifada." As a survey from the Anti-Defamation League shows, it is how the United States has stooped low enough where 24 percent of Americans found that violence against Jews is "understandable." 

Given the entrenched hatred for Israel and for Jews in multiple international organizations, I remain skeptical as to whether the victims of the October 7 attacks will receive the justice they deserve. Until the world can view Hamas as the Islamist, regressive, homophobic anti-Semites that they are, and until people can realize that it is the Palestinians who embody everything the anti-Zionists accuse Israel of, most people will continue to cling to the moral inversion in which it is "understandable" to attack Jews and where #MeToo does not apply to Jews or Israelis. Even so, I hope that the Dinah Project is a first step to pursue justice for those who suffered at the hands of Hamas terrorists and could also be used as a framework to legally punish anyone who commits sexual violence in conflict. There is no acceptable instance in which rape is resistance. As we move forward, let us not forget who stood up for victims of sexual violence and who stood on the side of genocidal rapists.

Making Tomatoes Expensive Again: How Trump's Tomato Tariffs Will Squeeze Your Wallet

From salsa and salads to ketchup and tomato sauce, tomatoes are one of the most consumed produce items in the United States. While tomatoes serve multiple culinary purposes, the U.S. tomato market is being threatened. In April, the Trump administration withdrew from a suspension agreement on fresh tomatoes from Mexico. 

With the termination of this agreement, the U.S. Department of Commerce is implementing an antidumping duty of 20.91 percent on tomato imports from Mexico that is to take effect today: July 14, 2025. DOC claims that the agreement failed to protect U.S. tomato farmers from the "unfairly priced Mexican imports." An anti-dumping duty is a type of tariff that only comes into play when there is evidence of "dumping." Dumping is when foreign companies sell goods at prices lower than what they sell for in their home market or below the cost of production. 

The U.S. government, in short, is unhappy that Mexico can and does sell tomatoes at a much lower price than U.S. farmers. As I have explained with tax policy and who pays their "fair share," it is amazing how much fairness is in the eye of the beholder. We will get into the fairness aspect in a moment. What is worth mentioning is that Mexico accounts for 90 percent of U.S. tomato imports and 61 percent of overall tomato consumption. Fruit imports account for 60 percent of the fruits consumed in the U.S., which is twice the share in comparison to what it was in the early 1980s.

What is even more undeniable is that these tariffs will increase the costs of tomatoes. Based on mainstream microeconomic theory, tariffs decrease the quantity of imports, thereby increasing prices. It is not mere economic theory. Trump's tariffs during his first term cost the average U.S. household $831 per year. Looking at the tomato market, it is no mystery why tomato prices will increase.

Mexico has a cost advantage due to lower labor costs, a longer growing season, and better climatic conditions for growing tomatoes. What the DOC does not want to recognize is that Mexico simply has a natural market relationship in which Mexican tomato farmers are better positioned to supply tomatoes than U.S. tomato farmers, especially in the winter. U.S. tomato farmers in Florida have had to plow their tomatoes because increased picking and packing costs render them unprofitable to pick. With Trump's onerous deportations on top of it, undocumented workers who would have otherwise picked the tomatoes are too scared to work, thereby increasing tomato costs further. 

The think-tank American Action Forum (AAF) estimates that these tariffs will increase the cost of tomatoes by 8 cents a pound, or about a 7 percent increase. That estimate assumes that the only cost will be U.S. consumers paying for the cost increase because a spoiler for Trump: the vast majority of the cost of his tariffs is passed on to everyday Americans. 

Due to consumer expectations and U.S. businesses wanting to avoid profit margin decay, the AAF's estimate in cost increase could increase to 15 cents, or an 11 percent increase in cost. Since Mexico accounts for 90 percent of U.S. tomato imports and 61 percent of overall tomato consumption, the United States will need to try to compensate for the shortfall in meeting demand. 

In order to do so, the United States would need anywhere between 42,000 to 250,000 additional acres dedicated to tomato production. This is upwards of six times the size of Washington, DC. However, given that the United States does not have that advantage, odds are that there will be fewer tomatoes to eat. Not only that, this will mean less economic output. A study from Texas A&M (Ribera et al., 2025) shows that Mexican tomato imports to the United States create over $8 billion in economic impact, an impact that supports approximately 47,000 jobs in the United States (see below).

Whether it is with steel, automobiles, or movies, Trump still fails to realize that tariffs are a classic instance of "cut off your nose to spite your face." Interest groups demand tariffs and they often win because the concentrated benefits are more visible than the dispersed costs on millions of consumers. 

Trump was quick to blame Biden during the presidential campaign about causing food inflation. Let there be no mistake: Biden's fiscal policy contributed to food inflation. In its supposed quest to pursue market "fairness," Trump is going to protect a few well-connected farmers. As a result, Trump will raise tomato prices for the everyday consumer while slashing economic output and destroying jobs. American consumers and Mexican farmers should not be punished simply because Mexican farmers are better at producing affordable tomatoes. Affordable tomatoes are now the latest casualty in Trump's trade war and tariff turmoil. 

Privatize the TSA: Its "Shoes Off" Policy Shows Need to Unite the TSA's Stranglehold on Airport Security

Some good news for Americans traveling by air: the Transportation Security Administration (TSA) announced this Tuesday that the TSA no longer requires travelers to take off their shoes as part of TSA's security checkpoint process. While it is a relief there is one less protocol to follow at U.S. airports, this instance gets at the inanity of TSA's security protocols. 

TSA was created in 2001 in response to the 9/11 attacks. The Aviation and Transportation and Security Act was passed in November 2001 nationalizing passenger screening in the name of national security. Prior to 9/11, airline passenger screening was the responsibility of the airlines. Since private companies had years of experience whereas the U.S. government had no experience in airline passenger screening prior to 9/11, it remains unclear why the TSA thought it would have a better chance of thwarting terrorists. 

Consider TSA's "shoes off" policy as Exhibit A of the TSA's dysfunction. Shortly after 9/11, Richard Reid, also known as the Shoe Bomber, traveled from Paris to Miami. He unsuccessfully tried to ignite 50 grams of pentaerythritol tetranitrate (PNET) that was concealed in his shoes. Reid is serving life in prison, but his attempt inspired the TSA to take on the "shoes off" travel policy. If this policy were so vital to national security, you would think that the TSA would have implemented it right away, right? Not so much. 

As late as August 2006, the TSA was still advising travelers that they did not need to remove shoes before entering a metal detector. It would not have taken five years to implement the policy if it were that urgent, much like it would not have taken two decades to have implemented the REAL ID Act if it a national ID were meant to enhance national security. Second, the TSA has never in its existence caught anyone with a hidden bomb in their shoe, thereby questioning the logic of such a policy. If that were not enough, there are very few instances in which other countries have this airport policy. By and large, the European Union, Australia, Canada, Israel, India, United Kingdom, and Mexico do not have this protocol in place. 

If it were simply a matter of one stupid policy, I would be merely calling for reform on a specific TSA policy. However, "shoes off" is an example of overall TSA incompetency chasing a problem that by and large does not exist. Let us start with that second part first. Last year, the Cato Institute conducted a risk analysis of foreign-born terrorism on U.S. soil looking at terrorist attacks from 1975 to 2023, including 9/11. The probability of a person being killed in terrorist attack on U.S. soil committed by a foreign-born individual is about 1 in 4.5 million. To put that in context, a U.S. citizen is almost 4 times more likely to get struck by lightning than in a terrorist attack.  

I seriously question how safe the TSA keeps passengers. In 2013, I called for the elimination of the TSA because its screening capabilities were so shoddy. In 2015, ABC News was able to conduct an investigation of how the DHS carried out undercover tests to test TSA's competence. It turns out that 95 percent of mock explosives or banned weapons smuggled by DHS during these simulations went unnoticed by the TSA. 

A 2019 report from the Government Accountability Office (GAO) on these TSA simulations shows that the TSA has a long way to go. Repeat incidents plus a lack of reporting showing considerable improvement indicate the TSA remains inept at its screening process. Data on TSA screening failure rates has been kept classified since 2017, so we cannot get a current figure on TSA's incompetence. This should not be a surprise: the "solution" to dealing with poor screening practices is to curtail transparency and sweep the problem under the rug. 

To be fair, we need to ask whether the cost is justifiable. It is a fair question given that the U.S. government spent $9.1 billion on TSA in fiscal year 2024. In 2023, I discussed the value of a statistical life, which is a common practice in cost-benefit analysis to determine the amount one is willing to pay to reduce the probability of a death. Governments have a higher VSL than actuarial practices. Even if you go with the higher amounts, it could not exceed much beyond $12 million. 

The most generous independent estimate is $15 million, which is already beyond standard CBA. However, that $15 million figure assumes 100 percent effectiveness rate. Assuming that the 95 percent failure rate still holds, the estimate is closer to $667 million per life saved. Once adjusted for inflation, that estimate puts the cost at $912 million per life saved. This is public policy speak to say that the TSA is so inefficient that the exceptionally high costs do not justify any purported benefits by any reasonable CBA. 

On top of that, there are other useless TSA practices. As security professional Bruce Schneier points out, liquid bans are arbitrary and unproven, full-body scanners are invasive and ineffective; and the SPOT behavioral screening program lacks evidence of effectiveness. And do not get me started on the TSA not following the science by forcing airplane passengers to wear face masks during the COVID pandemic.

The TSA is talented at feeling up and patting down airline passengers, confiscating items that do not need to be confiscated, and creating a bunch of national security theater, but is efficient at little else. It's American government at its finest because a government monopoly is incapable of properly trading off costs and benefits. The TSA has been far more invasive and costly than terrorism itself. The TSA belongs in a list of U.S. federal government agencies that should be eliminated, including the Department of Education, the U.S. Agency for International Development, the Consumer Financial Protection Bureau, and the Federal Emergency Management Agency (FEMA).   If we care about airport security, fiscal discipline, and national security, the TSA should be abolished and privatized so airplane passengers can go through metal detectors without dealing with the excessive security theater. 

Big Beautiful Bill Will Result In Big Debt Without the Big Beautiful Economic Growth

President Trump spent his Fourth of July signing into law the One Big Beautiful Bill Act (OBBBA), a budget reconciliation bill passed by the 119th Congress. OBBBA contains a number of policy priorities from Trump's second term, including removing the tax on overtime, funding Trump's deportations of undocumented workers, extending individual income tax provisions from the 2017 Tax Cuts and Jobs Act, and removing the tax on tips. Given its sheer size, I cannot cover everything in one entry. We will have to see if I cover various provisions in the future. 

What I can say is that on the whole, the OBBBA is not looking good for the United States. The White House's Council of Economic Advisers (CEA) is optimistic. According to the CEA's analysis, the OBBBA is expected to reduce the debt-to-GDP ratio to 94 percent, reduce the deficit by $8.5 to $11.1 trillion over the next ten years, and increase the real GDP by between 4.6 percent to 4.9 percent over the next four years. But none of the policy wonks on any side of the political aisle share the White House's optimism. 

While the Right-leaning Tax Foundation calculates that there will be modest GDP growth as a result of the OBBBA, Tax Foundation is anticipating an extra $3 trillion in debt. The Congressional Budget Office (CBO) estimates that OBBBA will increase the debt by $3.4 billion. The Wharton School, which is the premiere business school in the United States, assessed the OBBBA and found that it would increase deficits by $4.1 trillion, as well as the debt-to-GDP ratio increasing by 7.7 percent and decreasing the GDP by 0.3 percent over the next decade. The bipartisan Committee for a Responsible Federal Budget (CRFB) found that OBBBA will increase the deficit by $4.1 trillion, accelerate Medicare and Social Security insolvency to 2032, and explode interest costs to $2 trillion a year. 

For those of us who care about the deleterious effects of debt on everyday living, this "Big Beautiful Bill" is a big mess. Neither the expanded tax preferences nor the subsidies like the ones in OBBBA are going to do us any favors. We should all be concerned about deficits and economic growth, but that is not evident in the bill that the Republicans passed. Without considerable spending cuts to get the U.S. government's spending binge under control, OBBBA will be nothing but a big, bloated blunder in the United States' budgetary history. 

Grounds for Repeal: Why It's Time to Ditch Corporate Average Fuel Economy (CAFE) Standards

The One Big Beautiful Bill Act (OBBBA) is a proposed budget reconciliation bill that is making the news with such provisions as removing the tax on overtime, funding Trump's harmful deportations, increasing the SALT deduction, removing the tax on tips, or cutting Medicaid. There is another OBBBA provision that is making the news: CAFE standards. 

In the OBBBA, the fines for the automobile fuel milage standards known as Corporate Average Fuel Economy (CAFE) standards are set to $0. This makes CAFE standards compliance voluntary while indirectly nullifying the standards without explicitly repealing CAFE standards. CAFE standards were part of the Energy Policy and Conservation Act of 1975. These standards were created in response to the 1973-74 oil embargo in order to reduce U.S. dependence on foreign oil. CAFE standards are currently set at 53.4 miles for passenger cars and 38.2 miles for light-duty trucks. 

Over time, CAFE standards came to serve another purpose: reducing greenhouse gases (GHG). The idea behind CAFE standards is to incentivize cleaner and more efficient technologies, which were supposed to benefit consumers through lower fuel costs. So why am I happy CAFE standards will de facto no longer be in effect? In short, because it is an inefficient law with unintended consequences.

CAFE standards will not help save the planet. The National Highway Traffic Safety Administration (NHTSA) estimates that CAFE standards will reduce CO2 emissions by 605 million metric tons from 2026 to 2050. While that sounds like a lot of metric tons, the truth is that 605 million metric tons is the equivalent of six hours of global CO2 emissions in 2021. Given that there are 8,760 hours in a year, never mind a 25-year period, CAFE standards will do virtually nothing to reduce global carbon emissions.

CAFE standards have killed people. CAFE standards create an incentive to manufacture lighter vehicles because it is easier to achieve these standards with lighter vehicles. While lighter vehicles might be good for energy efficiency, they are less safe because the risk of vehicular death increases when a lighter vehicle collides with a truck or SUV, as opposed to a heavier vehicle in the same crash. For each 0.1 mile per gallon (MPG) increase in CAFE standards, there has been an increase of 150 deaths (Jacobsen, 2011). Other studies with more lenient standards have found that CAFE standards increase vehicle deaths (see Anderson and Auffhammer, 2013; National Academy of Sciences, 2002; Crandall and Graham, 1989). It would be an a fortiori assumption that stricter CAFE standards, combined with increased traffic, kill more people. 

CAFE standards increase the price of new and used vehicles alike. As this study from the Mackinac Center shows, complying with CAFE standards entails a lighter vehicle weight, less acceleration, and technological upgrades, all of which are more expensive. A majority of those costs are passed on to the consumer, with an estimated cost of $24.1 billion of consumer costs in 2023 (Jacobsen, 2013). 

We have to remember that CAFE standards do not apply to the individual vehicle, but rather an average across the entire fleet of a given manufacturer. Even so, the standards have become so high that they incentivize greater electric vehicle (EV) manufacturing than would otherwise exist. The average EV costs about $7,000 more than a traditional gas automobile, which means that CAFE standards are both incentivizing EV manufacturing and increasing automobile prices.  

Not only that, used car owners are incentivized to hold onto their car longer, which constricts supply and drives up prices. In 2015 dollars, an increase of CAFE standards by 1 mile per gallon resulted a $164 increase in the average price of a large used car (Jacobson and van Benthem, 2015).

CAFE standards disproportionately harm the poor. 92 percent of U.S. households own a vehicle, which is to say that owning a vehicle is vital for the vast majority of Americans. This is significant since a car will cost a low-income household a higher percentage of household income than a high-income household. CAFE standards can very well make new vehicles out of reach for a low-income household, thereby driving them towards the used vehicle market and driving those prices up further. Additionally, energy efficiency standards are regressive because they require a high upfront cost. One study found that efficiency standards such as CAFE standards force low-income households to buy higher-cost vehicles, thereby being more regressive than an energy tax (Levinson, 2016). 

Postscript. To recap, CAFE standards will do nothing of statistical significance to save the planet. All the while, CAFE standards kill people while driving up new and used automobile costs, especially for low-income households. These unintended consequences make the case even stronger for consumers to have the freedom to choose how to buy, drive, fuel, and insure their vehicles. Granted, the OBBBA's provision is not quite as good as simply repealing it because Democrats can always regain power and increase the fines for violating CAFE standards. But it is nice to have at least some reprieve from a regulations that is as much of environmental feel-good policy such as plastic bag bans, the Endangered Species Act, or the act of recycling plastic.