In October 2005 I wrote a post asking for a higher gas tax; I wanted taxes to create $5 gas. The idea (and by no means was it my idea) was that a higher gas tax would accomplish 3 things:
- Higher gas prices would reduce consumption, thus lowering the base price of gasoline
- Demand for fuel efficient vehicles would increase
- All additional gas tax revenues would have been spent developing alternatives to dependance on foreign oils and carbon burning fuel (and maybe some money could go to beefing up the national oil reserves)
Three years later we will have $5 gas, but all of the increase will be going to profits for private companies (some local and some foreign). Now we are feeling the crunch at the pump at a time when we are also feeling a crunch in our housing market and our credit market. This could have been avoided. We could have decided to fix the problem before it got dire. In 2005 we were better equipped to handle $5 gas than we are now, but now we don’t have a choice.
We could go ahead and tax gas until it costs $7/gal, but this is a horrible time to do that. Then again, we may see $7 gas before the end of 2009.
There was no time like yesterday to fix today’s problem. Then again, that means we should try to fix tomorrow’s problem now.
I say we raise the gas tax instead of making the problem worse with a “gas tax holiday”. Just like a heroin addict we are probably going to get sick when we kick our dependence.
