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. 

4 Responses to “What Stupid Is: Not Raising The Gasoline Tax”

  1. michael

    Just got back from Georgia, a state that has one of the lowest state gas taxes in the nation-7.5%. Other than some of the worst traffic in the country, there doesn’t seem to be much to disincentivize driving or incentivize transit use. Gas was $1.25/gal when I was there, and at one point in the past 2 months it actually could be bought for under a $1!! Tell you what though, if you have some cash, there are some screaming deals on real estate in the Atlanta metro area.

  2. Dan Staley

    How did you like all that ped infrastructure from MARTA to the High Museum of Art, michael?

    What, you say, you didn’t see any? Correct you are! No crosswalk from the train across the street to museum. Joke. No crosswalk across an arterial to the Peachtree station. Funny.

  3. dan bertolet

    And now even the blowhards at the Weekly Standard are on it, giving the front page to Krauthammer, who proposes a “Net-Zero Gas Tax” as if he invented the idea:

    http://weeklystandard.com/Content/Public/Articles/000/000/015/949rsrgi.asp

    It’s entertaining to listen to him try to justify market intervention when he’s spent his life bloviating about how it’s the evil work of socialists, etc. Regarding how it may impact climate change: “This shift has the collateral environmental effect of reducing pollution and CO2 emissions, an important benefit for those who believe in man-made global warming and a painless bonus for agnostics (like me) who nonetheless believe that the endless pumping of CO2 into the atmosphere cannot be a good thing.” Cannot be a good thing? Why is that Charles?

  4. Costa Mesa Water Damage

    Found your webblog on AskJeeves, great information, but the site looks awkward in my browser setup, but works out fine in IE. proceed figure.

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