I have cited two articles from this past winter when fuel prices were considerably lower than they are now. I’ve done so to make a point. Regardless of political left or right, politicians never miss an opportunity to tax more. They will always cite any and all reasons they can to pass or raise a tax, and authors who agree will say anything to help their cause even if it means calling politicians cowards.
Firstly, lower gas prices increased demand for gas; economics 101.
The above statement is true. Oil is traded globally and when the demand it drops, there is a following decrease in the price of gas. This will also, in turn lead to a higher demand for gas in the long run. With the federal gas tax being 18.4 cents per gallon of fuel, as people begin buying more fuel, the government coffers will once again begin to fill up. Please be reminded that fuel prices are seasonal, but demand could be kept up with more production, which would keep the gas tax dollars flowing, which is yet another reason I support fracking, especially since the EPA has once again declared it safe.
Secondly, increasing the gas tax would hurt lower and middle class people the most. High income earners can absorb the cost of the tax much easier. Regressive taxes such as these always seem to blow my mind. Democrats supposedly are in congress to help the middle and lower class Americans, yet they will never miss any opportunity to tax them. It’s like saying, “you are living from paycheck to paycheck, but for your own good we need to take more of your money”.
Thirdly: DOES ANYONE REMEMBER THE $787 BILLION DOLLAR STIMULUS PACKAGE that was supposed to be full of shovel ready infrastructure and highway jobs? Where did that money go? I think the truth is that no matter how much they have, it is never enough and Washington will always be looking for a new way to tax. Saying that highways and bridges are crumbling is a sensational statement that creates a crisis; we all know how politicians never let a crisis go to waste. I would hand control of the federal highways back to the states. Doing so would eliminate the need for a federal gas tax, levy the tax at the state level.
What politicians in favor of a gas tax increase fail to realize is that fuel prices will at some point go back up to where they were. This tax would make gas prices even higher in the long run which will only serve to hurt the economy, and decrease demand for goods and services in the aggregate. Large scale tax reform is what is needed, and it’s something these two authors seem to want to not bring up, and the jalopnik article even criticizes.