On Gas Taxes

O.K. so it's late night on Saturday, it's been a good day and I am writing about...gas taxes?? Well, inspiration can hit you at strange times.

Lately I have been hearing from many quarters that we should support extra taxes on gasoline to encourage efficient use of this (supposedly) fast depleting resource. But will this have the desired result? I don't believe so. First of all any sales tax creates a disproportionate burden on people with lower incomes. Worse, it is likely that low income people on average own older vehicles with lower gas efficiency, but don't have the money to invest in a new vehicle. Among newer vehicles too we have gas guzzlers like hummers, big-ass SUVs/trucks and so on, but from what I have seen these are driven by the richer set for whom money isn't much of an issue. Will they quail before a gas tax? Probably not. My guess is such a tax will just make life more difficult for people who have to drive long distances in fucked-up vehicles just to hold down a job. Will it spur a lifestyle change in favor of shorter commutes? I don't know about that. People tend to stay far from work because it costs less. If a good fraction can afford it and decide to move closer, increasing demand will drive up prices immediately as the demand curve for real estate is rather elastic. It isn't well understood that there is just no free lunch in economics...

There is also the rhetoric that money from the tax can be used to fund all sorts of alternate fuel research, light rail and so on. My innate prejudice is that sounds fine in theory but in practise governments just end up wasting the cash. Every politician has some axe or the other to grind which could use money. For some it's a useless construction project to create "jobs", and for the more ambitious it could be a pointless war somewhere in the world. Does one really wish to put more good money in the hands of these idiots? Also, while the money budgeted for basic sciences and alternate energy development is pathetic, that is not because of a shortage of money in government treasuries. It's because the politicians who spend the money and the public at large which elects them are both just too dumb to think about investing in the future. Of course, it goes without saying that both houses of congress are happy to spend billions on a missile shield, while knowing that there isn't a fool alive who would fire off a nuclear missile at the biggest ICBM power on the planet. I pose the question again - do we want to give these guys more money to play around with? I can bet that if such a gas tax comes to pass, a few years down the line there will be acrimonious debates along the lines of where-did-that-money-go, who-is-to-blame-now and how-many-drinks-make-rosie-sexy. Ugh. That's way too nasty...even for me...