Editorial: Now would be a good time to raise Gas Taxes

By Noel T. Braymer

The recent collapse of the I-35W Freeway Bridge in Minneapolis highlights a problem that has been growing for years: the deferred maintenance of much of America’s infrastructure. There is an old saying in Economics: “There is no such thing as a free lunch“. The “free lunch” referred to was the practise in the past of Bars serving a “free lunch” with the purchase of a beer. The purchase of the beer paid for the “free lunch” and besides the lunch was usually made up of salty foods which tended to make the bar patron thirsty for what else; more beer. The point is one way or the other you or someone pays for what you get. Any money “saved” putting off work on the I-35W Bridge was more than lost when the bridge collapsed. To quote another old saying “a stitch in time save nine.”

I remember on my first trip to Washington D.C. I did the typical tourist stuff and looked at many Greco-Roman Temple Government Buildings. Most of these buildings had inscriptions, many in Latin over the building’s front entrance. The one I remembered was the one over the Headquarters of the Internal Revenue Service. It was a quote from Oliver Wendell Holmes which simply said “Taxes are the price we pay for civilization.” Most Americans who have traveled to Europe come back marveling at the Airports, Publice Transportation, Rail Service and Highways. The infrastructure of many parts of Europe is in much better shape than in the United States. Guess what, taxes in Europe are also higher, much higher in many places. Americans often also marvel at how “expensive” gasoline is in Europe, as much as 6 dollars a gallon or more. The cost of the gasoline is about the same in Europe as in America, the difference is the taxes are higher. The “high” cost of gasoline hasn’t stopped Europeans from buying cars and driving. But gasoline taxes are a good source of tax revenues and Europe doesn’t import anywhere near as much oil as we do and doesn’t have the massive balence of trade deficit that we do. As a result of this the Euro is becoming a strong currency while the Dollar is rapidly losing value. A major factor in our trade imbalance is imported oil.

We in California have just experienced another State Budget battle. The cause of the long 51 day delayed approval of the State Budget was the intransigence of Republican State Senators who were refusing to pass a budget without major cuts to balance the budget, even ignoring the requests of their leader Republican Governor Schwarzenegger to accept the compromise agreed to by the Democrats. This compromise transferred (stole) over a billion dollars in transportation funds recently approved by the voters to short up the general fund. California is one of only three States which require a 2/3’s majority in the Legislature to approve the state budget. Much of this annual theater of the absurd would be avoided if the 2/3’s requirement was dropped in favor of a simple majority as is the norm in the civilized world. We could take a lesson from the past when Ronald Reagan was Governor and he had budget shortfalls in California: he raised taxes!

The recent volatility of gas prices has shown that people may complain but can live with higher gas prices. Raising taxes on gasoline will be less onerous than the rapid price increases we often see. The increases in gasoline taxes should be used for infrastructure and not just for road construction. Higher gasoline taxes will slow down gasoline consumption and be an incentive to conserve gasoline. As a tax on consumption it gives the taxpayer a choice of how much tax they want to pay. Don’t want to pay more gas taxes, use less gas! Expanding rail passenger service and public transportation will give people more economical choices besides driving and will conserve fuel. In the long run by raising gas taxes we will stabilize gas prices and consumption which will slow down rising gas prices in the future.

Will there be opposition to raising gasoline taxes? Of course there will, and the oil producers which already enjoy many tax breaks as well as massive profits will scream the loudest against it. But to continue doing what we have been doing will only dig us deeper into the hole we have dug ourselves into from our dependence on fossil fuels. We can’t continue to put off making badly needed upgrades to our infrastructure if we expect to maintain a decent standard of living. Many of the problems we have when traveling by rail, air or road are a result of deferred maintenance. As events in Minneapolis have shown, deferring maintenance doesn’t save money; it only creates future expensive disasters.

Comments are closed.