This is beginning of the end of America as you know it. Now the Government will dictate what kind of car you should be driving with this kind of price shock and disciplinary methods. What's next Pavlov's Bell? People buy big SUVs cause they want to and can afford to, no amount of regulation has curbed that appeal because people have a CHOICE to the kind of car they want. Taking away this kind of free market freedom and punishing people for their choice will only lead to tyranny and oppression. Americans will drive "Green Cars" only if they want to, not because they have to. So government has first handicapped the auto industry with CAFE standards and outright dictated the design of a car from behind the desk of bureaucracy. Now bailing out these failed enterprises with taxpayer money is not enough, they want to hold taxpayers hostage and make them purchase a car of their choice. Buy only what the government thinks everyone should drive. How is this any different from the tyranny we have fought against throughout the world?
Do you believe the gov't imposing pollution and safety standards on cars is OK? If so, how is that different than fuel standards?
You still have the choice to buy your SUV, if you wish. You'll just pay more for the fuel. There's nothing new here, really. See "sin taxes."
I haven't fully formulated an opinion one way or another, but how do you go from a gas tax to the government dictating what everyone should drive? Even with the gas tax, you should be able to still purchase whatever vehicle you want...it's your choice. just because cigarettes and alcohol are taxed doesn't mean the government is dictating what brands you buy, does it? obviously it will impact the way the market will evolve, but it doesn't stink of downright socialism, to me.
Tax his land, Tax his bed, Tax the table at which he's fed. Tax his tractor, Tax his mule, Teach him taxes are the rule. Tax his work, Tax his pay, He works for peanuts anyway! Tax his cow, Tax his goat, Tax his pants, Tax his coat. Tax his ties, Tax his shirt, Tax his work, Tax his dirt. Tax his tobacco, Tax his drink, Tax him if he tries to think. Tax his cigars, Tax his beers, If he cries, tax his tears. Tax his car, Tax his gas, Find other ways to tax his ass. Tax all he has, then let him know You won't be done 'til he has no dough. When he hollers, tax him more, Tax him 'til He's good and sore. Then tax his coffin, Tax his grave, Tax the sod in which he's laid. Put these words upon his tomb, 'Taxes drove me to my doom…' When he's gone, do not relax, It's time to apply the inheritance tax...
This is about manipulating the free market system to achieve a desired result. Naturally the price of gas is an agent of supply and demand, when demand is decreasing like it is right now then price will decrease too. However our government doesn't want to allow market forces to shape consumer behavior so they will put a floor on the price of gas and keep it around $4 to $5 so the price shock encourages more people to buy these new "green cars". Basically this is an attack of our freedom to choose. This is not a "sin tax" because even the owner of smaller more fuel efficient car will still pay the same for a gallon of gas as the one who drives an SUV. Bottom line is the price of gas should be what the market ie buyers and sellers decide not what the government would like it to be. If the market says its $1.50 right now then that's what we should pay at the pump. Come people this America we live in, home of the free. This kind of social experimentation and price manipulation has no place in this country.
I was going to type a couple of paragraphs attempting to say the same thing, but you summed it up in a few words. No surprise there. Krugman's column explained it better than the editorial. There are numerous reasons to increase the Federal gas tax, and he touches most of them. One I would add is that "we" are blowing the doors off the previous record for the Federal budget deficit. Revenue has to come from somewhere to at least to help offset the huge increase in the deficit, which is, by itself, placing us at enormous risk. I would like to see part of an increase go to the states for infrastructure improvements (needed badly) tied to transportation, but it would have to be phased in because of the precarious state of the economy.
It's called a Pigovian Tax, and it's a concept taught in every Economics 101 class, not in a secret chapter of Das Kapital. This is nothing new. These two ideas are at odds - the market is not in equilibrium solely based on the prices that "buyers and sellers decide" when you consider the externalities of gas consumption, such as pollution.
The person who smokes less pays the same for a pack of cigarettes as a person who smokes more. How is that any different? The more of the "sin" you use, the more you pay in taxes. Same thing with gas. Or, not smoking at all would be the equivalent of having an electric car like the Chevy Volt. But the market already has a gas tax in it.
Seconded. Allow me to also point out the cost of infrastructure associated with gasoline consumption. It's tantamount to an enormous subsidy. The idea of an increased gas tax is no different than if regulations were put through demanding that gas manufacturers pay to remove air pollution caused by burning gas. The price of gas would, naturally, go up.
I would support a gas tax only if it was conditional on the price of gas to begin with. for instance with the national average at 1.50 I would have no problems bumping that to 2.50 or 3 bucks but at 4.50 you cannot have even a .50 tax.
You will not fix the debt with taxes, you have to cut entitlement programs. the only problem with that is, old people tend to vote.
In this country's government, fuel taxes are one of the few things that work well. And it works well because it is a tax directly tied to the government service that it funds. It is really a user fee. The federal fuel tax goes mostly back to the states for highways and to the bureaucracy that determines how to write the checks to the states. The more people drive, the more damage to the road, the more tax money to fix/expand the roads. Using the same tax for general revenue would screw this up. (It should be noted that SUV drivers subsidize car drivers and especially compact car drivers. A Hummer driver pays 5-6 times the gas tax as a Prius driver, and does maybe twice the damage to the roads.) If we need more highway funds (beyond what we can get from eliminating DOT waste), then gas taxes should be raised. Otherwise, we'll screw up one of the few parts of the Federal government that works reasonably well.
All those soldiers' lives we sacrificed to free Europe from Hitler's punitive gas taxes would be in vain!
Great post, Wes. I also think that the tax should go solely for replenishing the highway fund. Making our infrastructure modern and world class is a great investment for increased trade and commerce. Using the revenue for other arbitrary purposes is not a good idea...
We probably need an increase. I ust don't think there are enough worthy road projects out there to triple the money spent on it. (The funding that a $1 tax increase like Friedman has proposed before would amount to.) I think it's reasonable to use some of it for Interstate Rail (trains get cars off the road, so drivers benefit), but in my mind, rail should be paid for primarily by those using it. And let's get this variable tax thing out of our minds. Most of Europe tried that. They started spending the money, and when gas prices went up, they couldn't reduce the tax like they planned.
