Why gas taxes should INcrease

As the price of oil continues to increase, and the price of gas heads toward—or exceeds—$4.00 per gallon in the US, there is the anticipated hue and cry for lowering gas prices. Presidential candidates McCain and Clinton have proposed eliminating the gas tax for the summer at least.

Here’s why I think that the gas tax should be raised instead.

  • Lowering the price of gas at this point will simply encourage greater consumption. Hence the impact of eliminating the tax will be increased demand for gas. That, in turn will act to increase demand for—and the price of—oil. As the price of oil gets reflected in gas prices, more hue and cry will arise. And so on. Furthermore, a summer reduction in the excise tax will have little effect on individual voter’s wallets but will produce yet another addition to the federal deficit.
  • Although the gas tax is truly regressive, affecting lower income car drivers more than the wealthy, there are offsetting tax measures that can help ease the pain for lower income households. These include such options as payroll tax reductions and gas tax rebates for low income drivers.
  • For decades I’ve tried the carrot approach to both employers and potential telecommuters: telecommuting will save you money and increase your joy quotient (JQ). This has had some results but the number of active telecommuters in the US is still only about half of what’s possible with today’s technology. So it may be time for the stick in the form of universal recognition that gas prices will continue to increase until there is no more gas to be had. At some point people will realize that what’s needed is more  intensive rethinking about transportation issues: alternative fuels, of course, but also more “is this trip really necessary?” thinking. Revenues from higher gas taxes could be turned to fund more research and more education about the issues.
  • The ultimate curb on gas use—and in my experience the most successful—is when there simply is no more gas. That was the situation in 1973, the year we first tested telecommuting. Although they may loudly complain about gas prices, the prospect of waiting in long lines at the pump is what gets people to change their ways. But are we so obtuse that we need a crisis every time in order to get our attention?

As many of my prior rants have said, we need to start now to reduce our dependency on oil. Reducing gas taxes constitutes a step in the wrong direction.

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