The case for a gas tax HIKE

Uh, cancel that gas tax holiday. Attytood has already said that the gas-tax "vacation" boosted by Sens. John McCain and Hillary Clinton is a silly idea, and today come two Wharton profs who believe that America would be better served by people paying higher taxes on petrol products:

How do we know that the price of gas is too low? The current price of gas doesn't cover the true cost of using gasoline. The tax portion of the current price is insufficient to provide the funds necessary to maintain our roads and bridges, and the non-tax portion fails to cover the environmental cost of using gasoline.

Because the price of gas is too low, we are using too much gas and building too much driving into our lives by neglecting transit investment and encouraging urban sprawl. So let's put aside this talk of holidays and talk about raising the price of gas by increasing the gas tax.

"But wait a minute," you say, "we can't afford to buy gas at the current price." Not true. We can afford it, we are affording it - and that's the essence of our problem. If the price were still higher, we couldn't afford to buy the quantities of gas we're buying today, so we would conserve - not just because conservation is the right thing to do, but because it would be the only thing we could afford to do.

I have mixed feelings -- the short-term economic pain on many low-income Americans would be considerable. The authors cite the example of Philadelphia in noting that many poor people don't drive, but Philly with its extensive mass transit system is something of exception. What about poor people in, say, West Virginia? Given the state of our current political debate, opposing an ill-conceived gas-tax holiday is about the most courage anyone can muster now, anyway.

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