March 20, 2008...8:18 am
Michigan Congressman wants to put sin tax on gas
Politicians love to place taxes on anything. It’s in their nature - get elected, find new things to tax.
One of the popular taxes for legislators, especially on the state level, are sin taxes. These are taxes on things that pose a risk to you such as cigarettes and alcohol so the government wants to tax your right to do with your body as you wish. Lovely concept, really. (Note the sarcasm.)
Now the federal government wants to run with that concept.
A Michigan congressman is proposing essentially a sin tax on the consumption of gasoline in order to reduce consumption. Rep. John Dingell, you guessed it a Democrat from Michigan, wants to hike gas prices an additional 50 cents by adding more federal taxes on what you’re already paying at the pump. So, those $3.25 prices you’re paying today, would be $3.75 quickly under the Dingell plan.
I typically support sin taxes on things such as cigarettes and alcohol to fund Department of Health and Human Resources programs. However, I do not support placing a similar tax on the consumption of an item which for all Americans is a necessity. This is not the way to develop alternative methods to reduce energy consumption by taxing the American public for using the only viable option available on the market.
Imagine Congress passing a 50 cent tax on eggs, butter, bread, cereal, etc. It’s the same thing. You don’t place an additional tax on things that your population needs in order to live or get to work.
An additional 50 cent tax wouldn’t just affect consumers at the pump, but also at the stores and in other places. Businesses would have to adjust to the additional 50 cent per gallon cost to their business by raising prices on their goods or laying off workers to save costs. With the current state of the economy and the rocky nature of the American dollar, neither outcome would help to spur on economic growth. In fact, this policy and those like it would only help to slow down the economy because it takes money out of the marketplace and limits what people are willing to spend. To spur the economy, you need lower taxes and more incentives for people to spend, hire, and do business in the marketplace.
This idea is flawed and is simply the request of someone who believes he knows better than the American consumer or the marketplace. Alternative fuel ideas will not come from the halls of Congress but from those in the marketplace that best understand what can and cannot work.
In the meantime, Congress should pay attention to things that would help the American consumer such as lowering taxes to stabilize the economy. Not consider a tax increase on such a vital commodity.
2 Comments
July 5, 2008 at 5:25 pm
July 5, 2008 Well gas is now over $4.00 and not tax caused it. Consumption is one of the culprits. The Rep. only mistake was suggesting only $.50 per gal. It should be another $1.00 per gal. Commercial users, such as truckers, taxies, services companies, contractors, etc. should also get an additional $0.40 per mile tax deduction. That would take the burden off those that can’t cut back on their usage. Pleasure drivers, boaters, etc. would be forced to cut back to a reasonable amount of driving. Or get more fuel effecient cars or car pool or use mass transit or whatever it takes to offset the additional cost if they must. Poor people generally don’t drive or boat, so they would not be hurt. Since commercial users would not be hurt, it should not add to inflation. Using less can start quicker than any other measure being suggested. It can start today for most folks. Here in Houston, I now see Park and Rides overflowing. Last year they were 1/2 full. Gamblers going to Louisana from Texas are increasing their use of Buses. I even see teenagers driving more cars like Focus or Matrix, having traded in their Mustangs and pickups they loved so much. The Rep. from Michigan is on the right track. The use of the additional Tax Revenue is a good topic for another time. But, we need measures that curtail usage today, not when Detroit can get it right or when Big Oil (yes, I know Houston is the so called Energy Capital) has gotten their profits high enough to justify finding better ways. Our Motto should be “Use Not Want Not.”
July 6, 2008 at 11:59 am
I respectfully disagree. Taxing something that people need in order to survive or provide food for their family is irresponsible, even if you are taxing as you say pleasure consumers.
The oil companies are not so much to blame for the high prices as investors who are looking to make money by purchasing commodities (such as oil) in a bear market with a dollar that is extremely weak right now.
When you have a struggling economy as we do today, adding taxes to corporations and private individuals only adds to that problem. Recessions and slow economies are not overcome through government interaction and taxes, but only through private corporations and individuals having the ability to spend, make money, and invest back into the economy. Adding taxes will only hurt the market’s capability to rebound.
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