Gas Tax

Mankiw suggested in a Friday editorial that the gas tax should be raised by 1 dollar. He makes several good points as to why it should be done but I think that an income tax is still better. The income tax is far more visible and is therefore far harder to raise and far easier to lower.  The enviromental benefit is a long-term one and is probably damaged by the economic damge that results from this gas tax, furthermore a tax on carbon would be a far better way of solving this. As to his point about road congestion its a long term effect which would be taking effect at around the time the law was reversed or something. His points on regulation and economic growth are good, but they assume that Congress would lower taxes  with this money. Also the regulations would probably go further than the tax and would avoid relaxing regulations because of this. As to the foreign policy I can’t see it making any difference to our policy. In fact even with lowered demand a 10 cent increase in gas prices would have a bigger political shock. I think a gas tax would just lead to bigger government and end up solving nothing.

One Response to Gas Tax

  1. Rachel says:

    The best thing to do would just be to bribe Europe and China to tax gas. European politicians already like taxes, so they’ll be thrilled to go along. Failing that, we should bomb more places into the Stone Age, or at least the pre-automobile age.

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