> Increased liability insurance, if mandatory, is effectively just a tax collected by an independent entity.

No regulatory agency will be as effective for accurately pricing risky behavior as an insurance market.

> At least on first blush, it makes sense (to me) to just cut out that middleman and levy it directly.

The whole point of liability insurance is restitution in the case where the insured caused harm.

Adding a government tax would be adding a middleman.

One thing to note is that, not only can taxes be made progressive, liability insurance is likely regressive considering higher paying jobs are more likely to be remote.

If you are too poor to afford compensation for the damage you might cause while driving then you ought not be driving.

I'd agree with this in a vacuum, but unfortunately the state of infrastructure in the United States[1] is such that most people--especially lower-income folks--need to drive to work, the grocery store, to ferry kids to/from school, &c. This isn't a good situation, but it's the reality at the moment. Moral "oughts" like you're providing really only hold weight if a person has a realistic alternative, imo.

[1] I'm not sure the situation in other countries.

The infrastructure problem would get figured out more quickly if people were jailed for driving without sufficient funds to compensate people in case of an accident.

The status quo is to require all other road users to take the losses from impoverished drivers which is as equally “unfair” as your sob story.

It’s not a tax. It’s literally insurance for liability.

We're talking about an incentive structure. Whether that's liability insurance or a direct tax, the goal is the same: to disincentivize unnecessarily dangerous road vehicles.

In a competitive market for insurance the goal is to optimize the actuarial outcomes such that you make a margin after losses are paid out on average. Making the tables optimal and margins small bring you volume of business. Taxes have no such incentive structure at all.

They don't apply the same technique, but they absolutely do establish the same incentive structure: taxing "vices" leads to decreased consumption[1], especially when the target isn't something you can easily sell on the black market (like cigarettes can be).

If Car B costs $X,XXX more than Car A for the sole reason that it's more deadly to everyone else outside of the car, then the purchasing envelope shifts for a large number of people.

[1]: https://www.tobaccofreekids.org/press-releases/2012_09_20_ny

But when you talk about incentive structures you have to consider both sides to understand the final price. Taking a one sided view doesn’t explain the final price at all.

Which side am I missing? When people buy cigarettes at the store, it's generally understood that the tax they're paying is used, in part, to offset the social ills of smoking. I would expect a similar understanding when purchasing large cars.

The insurance company doesn’t care about your safety, just how risky you are and the expected payout for insurance over your lifetime subtracted from the income produced from the policy. They don’t increase it to change behavior as you imply. This is different than the government taxation which is less about revenue and costs than about public health incentive creation.

Okay. In that case, I think I strongly prefer the tax!

> Okay. In that case, I think I strongly prefer the tax!

I'm reading this as you preferring a moral solution rather than a technical one? You must feel pretty confident that the folks in charge of governing will always have priorities that align with your own.

These are both moral solutions, in my book; the GP has convinced me that one is more effective than the other.

I don't think any such law will ever come into effect. So I don't feel the need to be confident (or the opposite) with respect to my elected officials. It's all wishing.

Sometimes, a tax can effectively be insurance for liability.

Sin taxes, e.g. alcohol or tobacco tax, in part help pay for the social cost of those activities.

As the name implies, sin taxes are taxes to discourage use. Tobacco smoking, for instance, likely saves tax payers money because:

1) Smokers pay more in taxes through tobacco purchases.

2) Smokers die way earlier, so there are less social security payments and fewer medical expenses.

No, that's just how they're sold.