Recent calls to repeal the federal tax on gasoline — either temporarily or permanently — fall somewhere in the hazy area between cheap political gimmickry and a conspiracy to destroy the country by destroying its economy. Yes, the high cost of gasoline is painful, but the repeal of the gasoline tax would be far worse. Here are five reasons to keep it:
- Highways. The federal gasoline tax pays for highway construction. Perhaps the politicians who want to take that money away have forgotten that several major interstate highway bridges have collapsed in recent years. A few people died. Millions were inconvenienced. As simplistic as it might sound, federal highway spending can prevent disasters like this from occurring.
- Oil company profits. The tax repeal would mostly benefit the big oil companies. An individual might save $1 a week from this particular tax break. The biggest oil companies might gain $1 billion a week in additional profit.
- Dependence on foreign oil. The proposed tax break would say, in effect, “Go ahead and burn all the petroleum you want.” Yet this is at a time when it is urgent for the United States and many other countries around the world to reduce their dependence on imported oil. The U.S. dollar is plummeting largely because we spend so much money on energy that comes from other countries. Energy is more than half of everything the United States imports! We can only rescue the U.S. dollar by importing less energy. And if we cannot rescue the U.S. dollar, the current recession could last long enough to be considered a depression.
- Terrorism. A small fraction of the money we spend importing oil eventually makes its way to terrorist groups who have sworn to destroy the United States. If we burn more oil because of a tax break, then the terrorist groups end up with more money. The politicians who are promoting this tax break might as well write a check to Osama bin Laden personally.
- Integrity. An ancient political theorist, I forget who, wrote that democracy could never work because if you put “the people” in charge, they would not be able to keep their hands off the country’s money. The treasury would go bankrupt and the country would collapse. The United States, with the largest budget deficits of any country ever, is already uncomfortably close to this scenario. We protect democracy — and the country — by maintaining the integrity of the institutions that keep the country going. Cheap political stunts like the repeal of the gasoline tax encourage citizens to nickel-and-dime the country they belong to — the exact opposite of what a country needs, which is to encourage citizens to do their part to support the country.
An old joke says that if you lined up two hundred economists end to end, they wouldn’t reach a conclusion. There is more than a grain of truth in this joke — reputable economists do not even agree on the current state of the U.S. economy — but I have not been able to find even one economist who supports the repeal of the federal gasoline tax. Today’s headlines tell of a letter signed by more than 200 economists, including four who have won the Nobel prize, rejecting a suspension of the gasoline tax. You will never get all economists to agree on anything, but this might be the exception. Why do so many economists agree? It’s because economists, by nature, want to see decisions that are in agreement with priorities. To respond to a problem with a feel-good action that makes the problem worse while procrastinating on a solution, like an addict going for another hit, or a country suspending a tax on the one product that is causing its worst problems — well, that’s just wrong.