Today Thomas Friedman channels Charles Krauthammer.
Friedman in today’s NYTimes:
The public is ready to be mobilized. Obama is coming in with enormous popularity. This is his best window of opportunity to impose a gas tax. And he could make it painless: offset the gas tax by lowering payroll taxes, or phase it in over two years at 10 cents a month.
Krauthammer in a June Washington Post:
Do one thing: Hike the cost of gas until you find the price point.
Unfortunately, instead of hiking the price ourselves by means of a gasoline tax that could be instantly refunded to the American people in the form of lower payroll taxes, we let the Saudis, Venezuelans, Russians and Iranians do the taxing for us — and pocket the money that the tax would have recycled back to the American worker.
You can join Professor Mankiw’s beloved “Pigou Club!”
Yup, economically, a gas tax is very efficient and easy to defend. My problem is that you are allowing government to say gas == bad, opening the door to taxing trans-fats. Taxation is separated from a method to generate revenue and we give the government the right to decide what is good and bad.
As an environmental whackjob however, I don’t think “gas” pays for itself.
It’s not in itself bad, but unless a tax is added to offset things like government responses to oil spills, or military presence in the middle east or medicare/medicaid paying for lungs problems due to pollution then the price of gas really isn’t what it ought to be anyway.
There are some things that affect so any others that perhaps a tax that would limit it’s use isn’t inherently bad.
Trans-fats do not involve a worldwide dominion of sorts or even effect the person sitting next to you to a real extent hence, doesn’t deserve the tax.
I believe I’ve heard everything now – when was the last time anyone ever heard of the gov. canceling or reducing a tax after it had instituted a new one ostensibly to take it’s place – and you are agreeing with Krauthammer to raise the tax 10 cents a mo. over a 2 year period. This amounts to $2.40 a gal. What about those citizens who are not affected by or would enjoy a payroll tax reduction (soc. sec.) and what about the “savior of the world” s promise to only raise taxes on the rich, has he now decided to against divisive politics?
You haven’t responded to the fact that gas doesn’t pay for itself.
We can sit around all day long and play “what about the poor”. At $2.40/gal added to the current $1.50 you end up with $3.90/gallon which corresponds with what many have agreed is the tipping point for people. $4/gallon. At that point people start looking and spending money researching new ideas for energy. At that point people quit wasting their resources and pay attention to how many times they run to the store for milk, or how far to live from their jobs or what kind of vehicle to purchase.
I am not saying anything in the blog, just noting that the 2 authors above had the same idea. JK points out that there is actually a club of this idea, the Pigou Club, so my blog post is actually ridiculous.
But I don’t think taxing gas when it’s this cheap is a horrible idea. You can not run a rich country based on what the unemployed/retired poor people have to deal with.
Alright – given in this particular discussion we won’t concern ourselves with the poor (we’ll save that one for some other time when it better suits our purpose) how does gas pay for itself if you raise the gas tax but lower a different tax so that your net intake remains the same. All you have done is shift the burden from one group to another. If gas is “to pay for itself” you need to use the 2.40 for that purpose rather than subsidize payroll tax.
I agree.
I never said I wanted to decrease the payroll tax. I said it looks like columnist A is channelling columnist B.
That’s it’. I didn’t say, let’s do what they are both saying.