The New York Times had an op-ed up on Dec. 26 called simply, The Gas Tax. Now if you didn't know it was the NYT, you might think an article about the gas tax right now might examine ways to reduce it, as another means of stimulating the economy. Oh no, the NYT thinks we should raise it. One of their suggestions:
to devise a variable consumption tax in such a way that a gallon of unleaded gasoline at the pump would never go below a floor of $4 or $5What a great idea. Let's cripple the transportation industry and raise the cost of everything that relies upon it -- permanently. They reluctantly admit that raising gas taxes might not be such a good idea right this minute. But they are longing for the day when raising taxes can push gas back up over $4 a gallon.
The article operates from the standard left-wing central government planning premise that we can't allow the market to work -- even though the Times admits that gas prices will eventually rise on their own. And since we can't allow the market to work, of course we can't possibly allow people to choose what types of vehicles we want to buy -- that would involve way too much personal freedom. People are basically sheep that need to be guided by the government, and forced into doing the right thing -- as defined by the NYT.
The transportation industry doesn't need gas prices to be low. The most cost-sensitive freight runs on rail anyway. Commuters can take public transportation, which many American cities are now building. It'll require societal adjustment, but it won't be any different from how the federal government regulated passenger rail out of existence in the 1950s while spending hundreds of billions on roads.
ReplyDeleteBesides, for a given level of government spending, the government needs to raise a certain amount in taxes. Would you rather the taxes be levied on income, or on gas?
"The transportation industry doesn't need gas prices to be low. The most cost-sensitive freight runs on rail anyway.'
ReplyDeleteThe entire trucking and light truck delivery system runs on diesel and gas. And then there is the airline industry, not to mention every industry that uses petroleum in its manufacturing process.
"Commuters can take public transportation, which many American cities are now building."
People who can and will take public transportation are already taking it. Many people have jobs that require cars, and most people prefer the freedom of cars anyway -- that's why they have them. They aren't going to give them up.
"It'll require societal adjustment"
Yes, it would require force. Fortunately, supporting a massive gas tax hike would be a recipe for electoral disaster.
"Besides, for a given level of government spending, the government needs to raise a certain amount in taxes. Would you rather the taxes be levied on income, or on gas?"
Neither. I'd rather that spending were cut drastically. And I wasn't talking about eliminating gas taxes entirely, just opposing having them raised thru the roof.
There are much less heavy-handed ways of cutting gas consumption than punishing consumers and devastating major segments of the economy. Car production is already heavily regulated, with all sorts of saftey and environmental standards. Raising the fuel economy requirements for new cars sold in the U.S., and/or imposing a tax on cars that don't meet them are much less coercive measures.
The entire trucking and light truck delivery system runs on diesel and gas. And then there is the airline industry, not to mention every industry that uses petroleum in its manufacturing process.
ReplyDeleteTrucking can live with that; it competes on time and convenience, not cost. The goods that are really cost-sensitive run on rail because it's already cheaper than anything else.
Manufacturing can live with that too. Germany and Japan have high gas taxes, and yet they have more manufacturing GDP per capita than the US, and more oil-intensive industries. The US is richer because of a larger service economy and because it makes very high-value goods, such as semiconductors, which are insensitive to gas prices.
most people prefer the freedom of cars anyway
That's completely not true. What actually happened historically was that most upper-class urbanites thought that cars were the future and the railroads were corrupt, so they pressured the government to built tax-funded roads to compete with privately-funded rail. Often urban planners like Robert Moses pushed car culture without any democratic oversight. We know that it wasn't popular pressure that made Moses tear up entire city blocks to build freeways, because he never gave a damn about public pressure.
There are six crossings of the Hudson from New Jersey to Manhattan. The first three - the two PATH tubes and the New Jersey Transit tunnels - were built privately with private capital, and subsequently made profits. The next three - the Holland and Lincoln Tunnels, and the George Washington Bridge - were built by the government. These projects subsequently made the rail crossings unprofitable, so they required public takeovers and subsidies. In fact, the GWB was so well-run that it inspired Roosevelt to add similar projects nationwide to his New Deal; that way, the ideas of a few reformers in New York became national policy.
Car production is already heavily regulated, with all sorts of saftey and environmental standards.
These regulations are nothing compared to what trains have to go through. The FRA mandates that every train on the national network be able to survive a crash with a heavy freight train. As a result, trainsets that are operating safely in Europe and Japan aren't allowed on Amtrak and many commuter lines, making them slower and more expensive to maintain than they need to be.
"Trucking can live with that; it competes on time and convenience, not cost."
ReplyDeleteHuh? Fuel is one of the main costs of operation for trucking. If fuel costs go up, profits go down. Only so much added cost can be passed on to customers.
"Manufacturing can live with that too."
Large companies, probably. Keep gas high enough, long enough, and small ones will go out of business.
"most people prefer the freedom of cars anyway
That's completely not true."
Well, I totally disagree. You might want to get out of the city. Pretty much the only people in the U.S. who are willing to rely on public transportation are those in large urban areas. The idea that we are somehow going to convert the entire U.S. away from cars and onto public transportation is a complete fantasy.
Only so much added cost can be passed on to customers.
ReplyDeleteNot necessarily. Higher gas taxes also reduce congestion, which means that trucks will deliver faster, and be able to make more sales. This is critical in many urban areas where congestion is particularly bad, like New York and Los Angeles.
Pretty much the only people in the U.S. who are willing to rely on public transportation are those in large urban areas.
Pretty much the only people in the US who have decent public transportation are those in large urban areas.