Tax Week: Part 2
I was going to write about sales tax today (and I'll still get to that) but I finally had a chance to read into this great article and one of the salient points is that gas tax, which provides a lot of the funding for public transit, is down substantially.
There are good reasons for thinking that public transit should not be linked to our use of gas for cars, but at very least, our (crumbling) road infrastructure is in bad shape largely because our payment has failed to keep pace with inflation.
This might have made a little sense leading up to the recession, as gas prices were spiking and pushing the margins of a lot of the failure points that later broke and became an international economic plunge, and let's face it, it probably DID make sense to do some deficit spending during the recession.
But we aren't in a recession anymore, and gas prices have fallen in a way that's leaving competitors (especially clean energy and efficient design competitors) in a bit of a lurch. Moreover, this isn't a new thing. Oil (and steel) were the original culprits that brought corporate monopoly laws in the US, and one of the specific tactics those laws were meant to combat was the use of price fluctuations to drive competitors out. Fast forward a hundred and some odd years, and the only change is that now the scale of these tactics is such that the US can't simply break up the party (honestly, no entity, not even the producers themselves, can at this point).
While we can't control the prices that oil comes into our economy at, what we
could do is create a "stabilizing" tax. Something like this would take the price of gas (before state tax) and raise it to something not unfamiliar or outrageous (based on octane), say $3/gallon for "regular", plus some flat tax (say $1) fixed to an inflation index. That way, we always pay at least $4 a gallon, plus state tax (or, to be really fair, set the price of crude at $75/barrel + $25 flat, but that fails to account for the quality of the crude). The primary benefit here is that other energy producers or those making alternative technology always have a price point that an international oligopoly can't foil - at least in the US. Secondarily, there's money, which could be set aside for transit, or just roads, or poured into the super-fund for the now inevitable spills and cleanups that our domestic petroleum interests seem to be involved in every few years.
But the point here is not about money earned. The point here is about money spent, and about stability. Americans need to know their investments will pay off, and frankly petroleum interests and auto users need to pull their weight.
There is no better time for this tax. American oil interests would hardly be affected by this law - they are already undercut at every turn these days, and maybe a great equalizer will help those companies actually producing superior product, or those companies with lower costs, which could bail some American companies out, or create opportunities for entrepreneurs.
Of course this will have consequences other than for immediate price stabilization of oil. Petrol byproducts will become cheaper (but not much, as this is already an international market) and states will be forced to do some mild reconciliation of disparate gas taxes, but not much. Even petroleum producers will like it eventually, because the US will be a reliable market that can be easily counted on regardless of international prices.
In the end, this is a logical response to international price fixing of oil, not a normal sales tax, or a government interference beyond reason, and it's something we should enact now, while we can.