Friday, February 20, 2009

A new gas tax

Here we go again with the stupid contradictions in government. Last year when gasoline prices exceeded $4/gallon, the government's response encouraged drivers to reduce their gasoline consumption - either by driving less or buy more fuel-efficient vehicles - to help bring down oil prices. In a way, that is sensible. Basic macroeconomics principle states that more demand results in higher prices. Lower demand results in lower prices. Demand went down. Supply went up. Prices came down. When consumption went down, so did the federal taxes collected on each gallon of gasoline. Those taxes go to - theoretically - help pay for road construction and maintenance. Less taxes collected...less money available for roadwork. So the government is coming up with a new way to increase those tax revenues to previous levels. They want to tax the number of miles you drive. You can read the details here . Through taxation government can control your behavior. And they will take your money from you one way or another because they think it belongs to them. You can have what is left over when they are done taking what they want.

This is similar to the logic of raising tobacco taxes to pay for smoking cessation programs. When the purchase of tobacco goes down - as they wanted it to - they raise taxes elsewhere to maintain the viability of the program.

I really get dizzy going around on these idiotic circular arguments.

1 comment:

  1. From what Fox News said today, this won't be happening.....thank God!

    Lucy

    ReplyDelete