Gas Taxes: Ineffective AND Unfair.

                It has been well established just how dependant America is on fossil fuels for both personal and economic transportation.  While it is easy to say that we need to do something different to reduce our dependence on this non-renewable resource, it is harder to say how.  Unlike many I don’t believe that raising taxes and essentially extorting American citizens and businesses into change will be effective.  Instead, I believe that Americans need and deserve to be presented with a viable, economical alternative before being punished for our current life styles.  As David Roberts of grist.org says;”The solution is not more virtuous behavior or slightly more fuel economy, but new infrastructure.” 

                American citizens have been conditioned and encouraged to use a disproportionate amount of fuels through decades of poor urban planning and even worse development of transit options in most major cities.  It is unfair for our government to turn around and punish the behavior that it has for so long encouraged, especially given the current economic climate of our nation.  The government needs to step up and establish a new standard to rise to, and then support it.  For example, if Plug-In Hybrid vehicles were decided to be the most effective (they likely would be at this point); the government needs to provide an enhanced power grid, and subsidies to provide Americans charging stations at their homes and businesses. 

                Simply raising taxes to punish our supposedly “irresponsible” habits is wrong and would hurt the poorest with the fewest options to change.  Being a commuting student at the U of M, I can personally attest to the impact more expensive gas would have.  While I do not live terribly far from campus, it would take me over an hour, and 3 separate busses to get to the University by public transit, as compared to 10-15 minutes by car.  It is not reasonable to expect me to give up 1.5 hours of my day just to save a gallon of gas.  I drive a mid-sized SUV, so the volatile gas prices hit me more than many others.  While I would like to downsize and drive a more efficient vehicle, it is not possible for me given my finances as a student. 

                With prices for everything continually going up and wages remaining flat or declining, Americans lucky enough to have a job should not be oppressed with excessive taxation on gasoline just to get there.  It is also important to understand that even if money is no object, the number of alternative fuel vehicles on the market is extremely slim and they do not meet the needs of many Americans.  It is not fair to penalize people for not adapting to technologies that have not been developed to maturity.

                These are just some of the many reasons I oppose the increase of gas taxes as a tool to reduce oil consumption.  Once new technology is there and accessible, I will gladly adapt.  Until then, I will keep on driving my “gas guzzler” because I have no other choice.

http://www.grist.org/article/against-a-gas-tax1

Anti-Gas Tax and the Economy

Nobody enjoys being taxed, no sane person anyways! But, there are taxes that are necessary, but when do they stop? I want to discuss how the gas tax negatively affects our everyday life. The times have been hard for everyone, so saving money is good. But will the gas tax really help us save money? I don’t think so! There are many things that are not thought about when people discuss the gas tax. To start the discussion we will start right in your own pocket! How will the gas tax negatively affect the economy not only for the whole, but for you!?

An average American car gets around 22.4 miles to the gallon. This means that with the gas tax increase, and prices nearing $4 per gallon. This means that with the gas tax, I will have to pay a total of $4 per day just to get to school. On average, each American drives 29 miles per day according to the Research and Innovative Technology Administration Bureau of Transportation Statistics. When gas taxes increase, a big hole is made in all of our pockets.

Another reason that we think we should not raise the gas tax is because it decreases the amount of money that the actually gas station makes. When the customers have to spend more money on the gas, they have less money to spend on the things inside the store. The things bought from the store itself, is what helps them profit. The gas tax could lead to gas stations closing because they are not receiving much profit, where do we buy our gas then? This also could lead to a loss of jobs, where would these people be moved to? Now that they have no job, how do they get money to pay for gas? According to Save U.S. Energy Job, Obama’s Proposed Oil and Gas Tax Hikes to Cost U.S. Economy 154,000 Jobs in 2011! Does not it seem like in the long run an increase in the gas tax will be a chain reaction of bad events?

People say that we will become more dependent on other sources of transportation. But if you think about it, right now to ride a metro transit bus it cost $3 during rush hour. That’s the price with gas where it is at the moment, if we make a major increase in the gas tax, would not it make sense that the bus companies have to higher the bus fares as well? So will it actually be cheaper for us to take the bus? Or will every one still want to be on the road? Also, the gas tax will affect everyone. Everything that is transported takes fuel to get it on the shelf or to its owner. This means that if we increase the price of gas, there would have to be an increase in clothes, food, etc.

These are just some of the ways that an increase in the gas tax will affect the economy. There are more of course, it seems that there are always ways to complain about where our money goes to. But why would we need yet another one? As we have said, the gas tax leads to a chain reaction of price increases, all of which we can’t afford!

http://www.americansforprosperity.org/060209-gas-tax-hike-bad-idea

http://www.saveusenergyjobs.com/2010/09/lsu-professor-warns-against-energy-tax-proposals/

A rebuttal to Greg Mankiw.

I found an interesting article related to our debate; “Raise the Gas Tax” by economist Greg Mankiw. I found that I disagree fundamentally with Mankiw’s article. He advocates raising the tax by $1 over 10 years. While Mankiw’s point about benefits to the environment is valid, he fails to acknowledge that the tax increase, combined with the constant increase of crude oil prices would deal a double-blow to our economy, a strange omission for a leading economist.

Mankiw’s next argument is that, if other people drove less, he wouldn’t have to wait in traffic as much. A perfect example of how an increased tax would disproportionately affect less affluent people. In Mankiw’s mind, he is entitled to drive to his heart’s content, since he can afford the tax. However, the average folks be damned and get off the road!

Later, Mankiw says that increasing the tax would actually grow the economy, because consumption taxes are better than income taxes. This is indeed true, but no one is suggesting that we lower income taxes to correlate to the increased revenue from gas taxes. It has come to be known over the centuries that taxes frequently go up, but rarely (if ever) go down.

Mankiw’s final argument is that it would increase national security. Another way to increase natural security related to oil would be to simply take more advantage of the resources we have sitting right under our feet and waters here in the US. It is also important to keep in mind that the US already produces an almost equal amount of oil to Saudi Arabia, and Russia, a neutral country, produces more than either of us!

While Mankiw is an extremely intelligent economist, he seems to have gotten this one wrong and seems mostly focused on himself.

http://gregmankiw.blogspot.com/2006/10/pigou-club-manifesto.html

What's the reason for the Gas Tax?

An article in Time about the gas tax mentions that the roads are in great need of help and the way that they are paid for is through the gas tax. And the other members in my group stated about how the gas tax will help the economy. But I want to ask, what really is the gas tax trying to do? If you’re raising the tax to help the environment that means you’re asking for people to use less gas. But, the point of raising the gas tax is to pay for the roads. In this article at, http://curiouscapitalist.blogs.time.com/2010/06/09/is-it-time-to-raise-the-gas-tax/#ixzz1HIOG0I2G, it’s said that the Highway Trust Fund is bankrupt and we need to pay for the roads somehow. But now we have two things happening, raising the tax to make people get off the road, and raising the tax to help the roads. I firmly believe that if you kick enough people off the roads and get them on busses, the gas tax will NOT help the roads as much as everyone is wanting because now we have less people buying gas. It seems that we are not sure what the gas tax is really going to help, and before we tax people on yet another thing we should be positive of what it will help. Now both of these things seem to be helpful to something else, but these sources and the rest of America aren’t looking at the bigger picture of whom and what will be affected. Especially how many jobs will be affected, to see this you can link to http://www.saveusenergyjobs.com/2010/09/lsu-professor-warns-against-energy-tax-proposals/. And this is one of the reasons why I believe that this article and others are short of evidence.

In yet another article, we are told that a $2 gas tax would generate $750 million dollars a day! This we know will pay for A LOT of stuff that is definitely needed, but who has money to pay for a $2 gas tax? This is not a reasonable argument at this time, America has been in a recession and that means that most everyone is having hard times, and will not be able to afford the gas tax.