What Stupid Is: Not Raising The Gasoline Tax

“The plunging oil price is like a dangerously addictive painkiller: short-term relief is being provided at a cost of serious long-term harm.”

That’s not the hyperbolic rhetoric of some raving enviro-fascist. It is, rather, the worldly voice of the Financial Times, the U.K.’s version of the Wall Street Journal.

The piece goes on to quote a researcher from Sandia National Labs who points out that suppliers have a vested interest in steep price drops, “because when the oil price falls like that, the economics of any of these alternatives … turn against you, and you walk away from it”.

Got that? A U.S. government official has gone on record all but accusing oil company executives of conspiring to quash the development of alternative energy sources by manipulating oil prices. (You may want to add that one to your file on “high crimes against humanity and nature.”)

A gasoline tax is a quintessential no-brainer. Time magazine, the most mainstream of U.S. media, is now on board. Even the pompous wing-nut Krauthammer called for a gas tax — in the form of a price floor — way back in 2004. (Didn’t he get the memo that conservatives are supposed to be against “social engineering?”)

But so far, not Obama. In a December 8 interview he said that “putting additional burdens on American families right now, I think, is a mistake.”  He should have finished that sentence with “strictly from the perspective of my short-term political capital.”

If the roadblock truly is the immediate financial burden, then the solution is a tax shift, whereby increased taxes on gasoline get offset by a reduction in some other tax, ideally payroll tax.  Under such a scheme, the overall tax burden remains relatively constant, gasoline consumers receive the desired cost signals, and the tax cuts help encourage a productive activity, i.e. employment.  Sounds a lot like the kind of smart change Obama promised.