A Hoosier with a bad idea

From the C-J (Candidate suggests ...):

Drivers would save about 50 cents for every 15-gallon fill-up under a plan to cap the sales tax on gasoline that [Indiana] Democratic gubernatorial hopeful Jill Long Thompson released yesterday.

The proposal would require a change in state law and would reduce state revenue, particularly if gas prices continued to increase.

One of the options available to policy makers to wean U.S. households off of the one car-one driver/passenger mindset is to raise gas taxes. In the short run this will cause people to drive a little bit less. In the long run it will lead to a series of major decisions (e.g., smaller cars, shorter commutes, more public transportation) that will improve a lot of social ills -- including vertical inequity of the current high gas prices (if lower income people are more likely to use public transportion*).

The knee jerk political reaction to suspend the gas tax is bad public policy.

*Note: The awkward movement you might be able to see is me running for cover.

Comments

[David Zetland]

This is really a bad idea, but it's common to hear populist politicians promising the world to people.

Why not make a law limiting price increases on cable TV, cars or tennis shoes? These are all "essential" goods, right?

The problem is that many people stopped thinking about the price of gas long ago. Higher prices are suddenly making them look at their behavior and some of them are VERY scared that their poor decisions (SUV, suburbs, commute, one car/person) are going to get VERY expensive.

This is the same "oh uh" problem that people are facing wrt their mortgages now. Suddenly they realize that they cannot afford to have five bedrooms and vaulted ceilings with two people and a goldfish.

Seems like many people made the same bad choices. They should have listened to their "depression baby" elders -- not the politicians and mortgage bankers who offered a free lunch.

We need people to sit down and think hard about what they are doing and the consequences that result. How about gas at $6/gallon and interest at 10%?

[Sam Clifford]

In order to reduce the amount of money people pay for fuel, I propose an arbitrary increase in the fuel tax. The massive price increase will mean people stop buying so much fuel in the short term because it puts it out of their price range. As America starts walking, cycling and catching the bus again people will realise they don't need cars.

They'll also boot out any government who raises taxes that much.