Thursday, April 05, 2007

The Solve-Everything Tax

Its early and I went to be late, I have been studying for a half hour and needed a break. One of the articles we were required to read for my Econ 201 test today was from the NY TIMES titled The Solve-Everything Tax.

The author starts out by saying, "I have a modest proposal to fight gobal warming, save energy, cut air pollution, ease traffic congestion, reduce highway fatalities and , while we're at it, reform Social Security. " He goes on to say all we have to do is raise the federal gasoline tax by 50 cents per gallon and put this revenue into American's Social Security accounts. He states and I agree, this sounds crazy because of the rage of high prices on gas. He says though, to do it as the gas prices are coming down (since they are predicted to do so). "Consumers would still see their cost declining at the pump, so there'd be no sudden shock at any tax increase." Democrats wouldn't be able to oppose a energy policy and wouldn't like the private account part. Republican's would hate the new tax and the fact that taxing drivers are paying for retirement accounts. A gas tax makes people drive less which is then better for the environment. "And then, after we've reformed Social Security while saving the planet, we could take on something really challenging."

I need someone to shine some light on this because to me it sounds perfect, am I missing something??

2 comments:

Yoli Maldonado said...

It seems like a sound argument to me Em, but the US is anti-taxes. Reference the Boston Tea Party. The problem in getting the 50 cent tax passed will be a lack of community that flourishes in American culture. It's generally very selfish. Some people see taxes as unfair. The "I work for my family and no one else" argument. Or the sense that "poor people just want a handout and I don't want to give it to them" way of thinking. I think this is also why we don't have a nationalized health care system yet when every other developed nation (including poor-ol' Cuba) has one.

Anonymous said...

It's funny that Americans think they pay a lot for gas. Here in Australia it's probably twice what you pay, and we complain. In western Europe it's twice what WE pay...
So you ppl have it good!

I agree with you that taxes can be good. A problem with the 50 cent tax on gas would be that it would hit a lot of people very hard, especially poor people. These are people that drive a lot, have no alternative, and those extra dollars would make a big difference.
Also, it doesn't only affect you and me driving around, it has a huge effect on the cost of delivering goods, food, etc etc. So our food, which is shipped all over the country and sometimes across the globe, would be more expensive.
A really strong increase could trigger a global recession.
Unfortunately - since I agree that we need to reduce exhausts from cars, get people walking more, to combat obesity, etc.

Though I didn't read the article, only your post, I'm not sure about the part about introducing the tax as gas prices start to fall, so ppl wouldn't notice it. 1. Will they fall?
2. How will you be able to time that? Surely there will still be a substantial price increase.

But I appreciate your blog... all the best and keep up the good work,

Martin
Melbourne Australia