Lincoln * Institute

Ralph R. Reiland

Ralph R. Reiland

The B. Kenneth Simon Professor of Free Enterprise at Robert Morris University

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Reflections

The Times' Gas Pains

by Ralph R. Reiland
 

Unhappy that we're no longer paying $80 for a fill-up, The New York Times wants to get the price back up to $4 or $5 a gallon by way of a hefty hike in federal taxes.

The problem, according to a recent Times editorial ("The Gas Tax," Dec. 26), is that "President-elect Barack Obama and the Democrats in Congress seem to have a clear vision of the auto industry they think the country needs," i.e., car companies that produce "highly fuel-efficient, next-generation vehicles." But the American public might not buy those government-commanded vehicles if gasoline is too cheap.

So to "help the nation cope with climate change and finite supplies of oil," the answer at The Times isn't to increase oil supplies by removing Times-supported restrictions on domestic drilling, or to determine if the science behind global warming is suspect, or to ascertain whether the alleged warming is even man-made or, more particularly, car-made.

Instead, The Times wants a new $2- to $3-per-gallon tax on gasoline and offers two methods. First, federal planners could "devise a variable consumption tax in such a way that a gallon of unleaded gasoline at the pump would never go below a floor of $4 or $5 (in 2008 dollars), fluctuating to accommodate changing oil prices and other costs." Second, The Times points to Harvard economist Robert Lawrence's proposal to put "a variable tariff on imported oil to achieve the same effect."

Either way, The Times is proposing a huge jump in the current federal tax on gasoline of 18.4 cents a gallon. Here in Pennsylvania, home ground of many who picked up their revolutionary muskets to liberate themselves from excessive taxation, there's an additional 31.1 cents per gallon in state gasoline taxes.

"If gas stays cheap, Americans would be less inclined to squeeze their families into a lithe fuel-efficient alternative," warns The Times. "Americans did not buy enormous gas guzzlers just because Detroit marketed them relentlessly. They bought them because they wanted big cars -- and because gas was cheap."

What matters, in short, is not what we want but what The Times thinks we need.

To help lessen the burden of their proposed increase in gas taxes, a regressive levy that hits the poor more than the rich, The Times says that "fuel taxes could be offset with tax credits to protect vulnerable segments of the population."

And who decides who's "vulnerable"? The same politicians who, seeking new targets for taxation during the presidential campaign, defined "the rich" as any family earning more than $200,000, and then $150,000, and then $100,000?

In deciding in central planning who is "vulnerable" enough for a tax credit, will a $30,000-per-year carpenter who needs a truck for work get more money back than a $30,000-a-year store clerk who can get away with driving a little tin can to work? Will we have to send in our mileage and gas receipts to get reimbursed?

Will a bachelor landscaper lose his gas-tax credits if he marries a rich perfume designer? What if he marries a lottery winner and she's a one-hit wonder?

And what if we live an hour or two from work -- not like those guys at The Times who ride five blocks in a cab from their Manhattan condos to the office? Do we get extra tax credits if the driving is work-related as opposed to just driving around at night listening to Jay-Z?

What about two fatties who get fewer miles per gallon than one anorexic? Should an intelligent gas policy punish those who are doing more than their share to keep people employed at their local bakeries?

Personally, I'd like a gas policy that's less punitive, such as drilling off Nantucket or making the grill on an electric car out of hundreds of little chrome fans so that the battery would automatically recharge while we're driving, or using part of Obama's proposed $1 trillion in infrastructure spending to build a bullet train that'll get us from Pittsburgh to a bar in Greenwich Village in an hour (the new French TGV train smashed the world's speed record last year, hitting 357.2 mph, nearly half the speed of sound).

And who's going to figure all this out? Nancy Pelosi and Barney Frank, the same people who thought that the best way to get people into their own homes was through no-income, no-assets loans?

Ralph R. Reiland is an associate professor of economics at Robert Morris University and a columnist with the Pittsburgh Tribune-Review.

Ralph R. Reiland

E-mail: rrreiland@aol.com