The Blog

Taxing America Clean?

The gas tax is still a terrible idea.

12:00 AM, Apr 28, 2005 • By CHRIS POPE
Widget tooltip
Single Page Print Larger Text Smaller Text Alerts

AMERICA IS THE LAND OF THE AUTOMOBILE. Cars are the keys to adulthood, the grail of status, the lifeblood of the economy, and the passport to a vast land. They are also Public Enemy Number One.

The automobile has long been blamed for global warming, respiratory diseases, and the destruction of the countryside, but it has also recently been indicted for treason in the war on terror. Though it made possible the most extraordinary social progress, opened up a world outside cramped cities to the millions, and almost every sector of the economy would grind to a halt without it, the internal combustion engine is now almost universally condemned as A Bad Thing.

One need not believe that fear of global warming should motivate an end to car use (or that an end to car use would end global warming) to believe that the "external cost" to society of car use is a potential reason for taxing gas. Conservative economists Martin Feldstein, Gary Becker, and Greg Mankiw have all joined the chorus for a gas tax, though their arguments are admittedly based as much on the income tax being bad for the economy, as they are on the gas tax being good.

Since Thomas Friedman warns us that there is also an imminent groundswell from "an alliance of neocons, evangelicals and greens," surely it is only a matter of time before congressmen swarm to the call of the gas tax?

Like most disastrous liberal schemes, astronomic gas taxes have already been tested on the British, where taxes account for 76 percent of the pump price, and regulation has further forced prices up to £3.73 ($7.13) per gallon. Even though the whole of Britain is essentially urban, and people are never far from a variety of kind of public transportation, roads are just as full in the United Kingdom as they are in the United States. For all the promises of environmental salvation through gas taxation, car use has been limited more by the fact that roads are so jammed that people now get to places quicker by train. Yet despite the enormous popularity of cars in the face of a high gas tax, Britons still hear claims that an even higher tax is what is needed to save the environment. The fig-leaf of economic rationale has, however, fallen. With taxes accounting for such a large share of the gas price, this would imply that the benefit to society of road transportation is less than a quarter of its external cost!

WHILE AMERICAN CITIES may look with interest at targeted road pricing programs, such as London's Congestion Charge, this provides very little argument for burdening motorists in Montana, who are unlikely to commute via Metro or deliver the mail by bicycle--regardless of how high the gas tax may be. The external cost of car use is quite different in the desert of Utah than it is on small streets of Georgetown, and the idea of a national gas tax, is therefore quite wrongheaded.

And so, the force of the argument rests almost entirely with the claim that gas taxes will change the types of vehicles that are used. It is easy for people to allude to the sort of travel that should be cut back on (any trip done in an SUV). Yet, the effects of higher gas taxes are likely to be felt elsewhere. It will not be the desperate housewife going to the nail salon who feels the punch in her pocket, but the poor who find it harder to get to work.

A short time ago it was claimed that low gas prices were bad, and that taxes were needed to reduce excessive consumption and spur innovation in alternative sources of energy. Yet, we now hear the argument that high gas prices are bad, and that taxes are the way to solve that problem, too! The failure of gas consumption to fall, as promised, as a result of a price increase has not been taken as proof that price-incentives are poorly suited to reducing gas consumption--but simply that they are not employed rigorously enough.

A DARLING PROJECT of the foreign policy world, the gas tax manages to unite factions that are generally locked in perpetual dispute. While liberal multilateralists have long embraced the concept as a way to fall in line with signatories to the Kyoto treaty on global warming, many conservatives have recently been seduced by the promise of disentangling America from its sordid relationships with the oil fiefdoms.