I’ve been waiting for my old con law prof to take a political stand I could really get behind, and he finally has. Barack Obama is the only one of the presidential candidates to take a firm stand against this shamefully populist gas tax holiday. Good for you, Prof!
Now, I’m not normally a big tax guy. Taxes generally expand the government’s coffers, enabling the state to do more of the stuff I don’t think it should be doing, and lots of taxes (e.g., capital gains taxes, Sen. Obama) create terrible, wealth-destructive incentives. But not all taxes are created equal. Activities that impose costs that are not borne by the people engaging in the activities – negative externalities, to use economic jargon – may be appropriately taxed. Gasoline consumption, which creates all sorts of negative spillovers, is one of those activities.
A friend of mine whom I hadn’t seen for a while came over the other night. I laughed when I realized he’d traded his ridiculous monster truck (he’s a city boy who definitely doesn’t need that much vehicle) for a sensible Honda Civic. “What’s up with the ride?” I asked. “Gas prices,” he replied.
What good greenie (as Hillary is trying to portray herself) or economically astute policymaker (as McCain is trying to portray himself) could think this is a bad thing?