So, for all of you who want to abolish the gasoline taxes, how do you propose building and fixing our transportation infrastructure, which is where gasoline taxes are usually (explicitly) targeted?
The power to tax is the power to destroy, and I agree with the author in that reducing American’s consumption of gasoline is a good thing. Demand destruction by taxation. Whether Pigou’s theory applies here or not… I am not sure, but certainly those more inclined to economic theory are welcome to discuss it and I think it is a good and necessary discussion.
Several of the above posters have reiterated what are standard talking points – eg. “more drilling’. I do not believe that when investigated closely such well worn claims (e.g., that more drilling will solve our import dependency) will hold up. What too many Americans are not aware of is the sheer quantity of petroleum and petroleum products we consume and import. You can go to the EIA website and check the numbers yourself. You can also go to the USGGS website and find studies of the amount of oil in ANWR, off California, etc. The realities of American oil consumption (which our President has labeled and “addiction”) is such that simply drilling more will not make that great of an impact upon importation. (E.g., likely to reduce imports only 10%, maybe 20% if best cases come together, for a short period of time.) Note too that oil fields deplete, and after a couple of decades places like ANWR and the California coast will have much lower production, so simply drilling more is not a long term solution.
I am not against letting companies drill in ANWR, or even off the California coast, but the probabilities tend to indicate that America will struggle to ever get to 7 million barrels per day production (of real oil) again, no matter where we drill. We need (with current infrastructure and practices) about 20 million barrels per day.
The Federal gasoline tax is a small portion of the cost per gallon. Given the highly inelastic nature of American’s demand for gasoline making small changes in the price of gasoline have little effect on the volume consumed. 18 cents a gallon also does not mean much to the actual family budget. E.g., if you buy 50 gallons/month then the Fed tax is just $9, less than the price of a movie ticket in many areas. In other words, the whining is disproportionate to the cause.
In summary, I encourage everybody to research these issues more, and not jump on the original author for trying to address real issues.
