You need to be careful when you're talking about taxing commercial vehicles, as this impacts small businesses who use trucks for their operations such as landscaping and (snicker) plumbing. Meanwhile, the gas tax would have a negative impact on buyer power and subsequent GDP growth as folks would curb other discretionary spending. So, ultimately, a gas tax would stymie economic growth in the long term.
I'm not proposing taxing commercial vehicles, or any vehicles. I'm in favor of a higher tax on gas. I did, however, point out that there's no reason to specifically exempt businesses from a Pigouvian tax, since the point is to "internalize" the externalities associated with the use of gas. Moreover, if you're concerned about helping small businesses, consider that the revenue from the gas tax could be used to fund tax cuts or tax exemptions for small business. The same principle applies when considering the impact on consumers. The beauty of the tax is that much of the burden falls on oil companies and oil-exporting countries, while all of the revenue goes to our government. Thus, we have an opportunity to encourage the conservation of gasoline while using the revenue to more than compensate the American people. For instance, the gas tax hike could be offset with a reduction in payroll taxes, which harm consumers and small businesses.
What are you talking about? This country was founded because of taxation on colonies. Forget what the government thinks is fair tax and look at what people can actually afford to pay. For all you people in Pigou Club, tell me something what is the real result of this taxation? I know you environmentalist want to reduce emissions, and less traffic, pollution, build new roads and highway etc...However the only outcome of this will be less people driving a car. Right? But that means our living standards goes down to the point where only those who can afford to as you eloquently put it, will buy cars. I keep hearing these claims by the leftist nut jobs that the US consumes the most energy in the world. So what if we do? Its paid for by our hard earned money. We are not stealing it or confiscating it from someone else. All this infrastructure building aka "New Deal II", isn't that suppose to be paid already through our income taxes anyway? Since the dawn of civilization, one of the primary purpose of taxes is to provide infrastructure, from roads, bridges to sewage, aqueduct and everything in between. Why in the hell does our government need more and more money each year to pay for things the should be fixing in the first place with our collected taxes? Naturally the answer is always well we don't have enough money. Well that is plain wrong, the federal government needs to tighten its belt and slash all the excess waste and trim the spending to pay for things taxes are actually created for. Look each day we are losing privilege to keep the fruits of labor and our property is being confiscated to pay for the excess of an over drunken massive government. Last week its was to the automakers, next week it will be someone new. Tinfoil hat in hand taking our income in the name of saving the economy.
Government tripling the price of a product isn't exactly what the Framers of the Constitution had in mind.
You mean like the Bailouts? Auto and Financial? Rocket River Start the cutting at corporate welfare!!
To be precise, the results of a gas tax are less consumption of gas and higher government revenue. The underlying principle is that society as a whole will reach the "optimal" consumption of gas only when people are forced to consider the impact that their decision to consume has on others. I don't see what's so radical about this. If you do $2 of damage to society, then that's $2 you ought to have to pay. This is really a basic concept in economics, and as someone who has studied the issue, I have to say that you really seem to lack an understanding of the basics here.
On the flipside, the government has tripled the price of lots of things. If we had no minimum wage laws and no safety standards, I imagine everything from food to clothes to cars would be substantially cheaper. But even looking at it from just a tax perspective, in the early years of the US, import tariffs were one of the primary methods of taxation, and they were fairly substantial at times. Not sure if they ever tripled the price of a product, but they certainly would have increased them notably.
This is vastly different than what we are discussing now, and I suspect that you know that. Minimum wage laws and safety standards had a by-product of increased cost. A tax is specifically designed to increase the cost. Additionally, the two things you mentioned did not have the increased cost flowing directly into the treasury. Minimum wage resulted in money flowing into the pocket of workers, not government. There are lots of things that our government used to do that were a bad idea. That isolationist and/or protectionist policy was one of them. That is a large reason that we did away with lots of them.
The depression in the 1930's was caused by: Crashing stock market, massive layoffs, poor economy and raising taxes to make up for the government's loss of income from the 1st 3 problems. Many argue that the raising the taxes was the nail in the coffin for the US that brought us down so deep and for so long. Raising taxes is the 1 thing missing from today. And I think most governments (federal, state and local) realize that they need the money to survive but raising the taxes is like taking blood from a person that already has a massive bleeding problem - a very good way to kill the patient. And because of this, most governments are making cuts or dipping into the rainy day fund instead of increasing taxes. Raising gas prices does more than hurt the SUV drivers - it hurts everyone. Small car drivers, bus riders, even if you don't drive you will pay higher cost in food, clothing and any retail materials as the increase in processing and transportation costs will be passed on to the consumer. Higher cost of goods = less goods sold. Less goods sold = more layoffs. More layoffs = less taxes and more problems. Raising taxes - any taxes but expecially gas taxes - would be the missing piece of the circle that would complete the swirl.
Depends if you're looking at the means or the intent. Your original statement was about tripling the price of goods. My only point is that the government has done that in other ways. In all cases, the intent has been to improve the quality of the society - but the means have certainly been different. True - but you said that the framers of the Constitution didn't have that in mind. But in fact, they were the ones that used tariffs and raising prices of goods as their primary method of taxation. If anything, the framers didn't have in mind the idea of NOT taxing imports, but we've since figured out that they were wrong about that.
This is the piece that I think everyone is missing and forgetting from the summer. Higher gas prices didn't just raise the cost of gas. It substantially raised the cost of food and all sorts of other stuff - and that affects everyone, not just the consumers of gas.
It isn't just from the summer. Food prices have yet to recede. The truly scary thing about it is that people have gotten used to paying the higher prices, and the higher prices are less noticeable because fuel is cheaper. So, people have forgotten. If fuel goes back up, prices will increase again for all consumer goods. This idea is just bad, bad, bad.
One, I don't think the level of taxation is an issue that materially impacts the philosophy on which the country is based. We could have our Constitutional Democratic Republic with high taxes or with low taxes. Two, those guys are dead and don't have to live with the results. Speaking to ArtV's point, this would be a bad time to significantly increase taxes on fuel. We'd be better served starting that in a boom time. And, as bucket has mentioned, you could potentially offset the increases in prices such a tax would cause by reducing other taxes which also serve to inflate prices. And, finally, I don't think we'd really be "tripling the price." I think we're already paying the price, but not accounting for it. The dollars coming out of people's pockets would triple, but they are paying for it in intangible ways already (and perhaps borrowing from their children in ways) in environmental damage, in excessive energy production, in international power relationships, and so on. But, since there is no good way to quantify in dollars how much it costs us that we have to be friendly with Saudi Arabia, for example, people don't account for it when they are at the pump. It has a cost, but we don't pay it in dollars. A tax monetizes that cost and funds the management of that cost. One might argue that they can't afford to buy clean air, clean water, energy efficiency, national security, and international influence. But, it's not money for nothing.
Believe it or not, I actually think that the many, many leading economists who support a higher gas tax have actually considered this. What you're missing is that as far as the prices of other goods are dependent on transportation consts, society is better off when consumers of those goods have to take into consideration the negative impact of the fuel used to transport the goods.
Sure - but that's all living in a theoretical world where there are no consequences to price shocks. If you were to start a society from scratch, that may work just fine. In reality, if you create a price shock to all basic goods, you're creating all sorts of new problems for the poor and middle class - problems far more significant than the one you're trying to solve.
Again, I'm going to have to shock you by pointing out once again that you aren't saying anything that economists haven't already considered. Amazingly, there are actually people who look into the actual consequences of policies. Despite this, very many economists have come to the conclusion that a higher gas tax is a good idea. As for causing problems for the middle class, I should point out -- again -- that the income effect of higher taxation of gas could be alleviated for the middle class by offsetting it with reductions in regressive taxes like payroll or sales taxes. You could even write every US citizen a check that would more than pay for the amount that most people would pay for the gas tax. As long as the tax increase is targeted at consumption of gas, while the tax cut boosts incomes or consumption of all goods, you can make the middle class better off while simultaneously correcting the problem of people not being accountable for their actions. Why do I say "better off" and not "just as well off as before"? Because, as I've pointed out previously, the burden of a tax on gas will fall primarily on producers and not on consumers of gas. Remember how everyone said the "gas tax holiday" was a bad idea because producers would get most of the benefit? They're also the ones who will pay for an increase in the gas tax.
And many have come to the opposite conclusion. Generally, in these kinds of debates, there are always people on both sides. What's your point? Yes, that would offset the increased money people are going to spend on gas. It's not going to cover all the secondary costs like additional food costs, or mail costs, or anything else of the sort unless you start trying to give tax breaks to the companies themselves (food producers, etc) in proportion to how much fuel they might consume. In which case, you're going in circles. You can't give people a credit equal to how much they are going to have to spend due to the new tax - and therefore you're going to create very real winners and losers unconnected to how much gas they consume. That will create a very real shock to a very fragile economy. Producers will just pass along the cost of a gas tax, just as any business does with virtually all other taxes. The reason that they would have benefited from a holiday is that there would be no reason to lower the price because people were already used to paying that price. With a gas tax, the producer can justify a price increase by saying "the government is making me do it."
