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Amid the Spill, Building the Case for Gas Tax

The untouchable proposal is gaining steam

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The idea of an economically significant gas tax is beloved by environmentalists and economists alike. There's just one problem: it's very unpopular. But could the oil spill in the Gulf revive support for this controversial measure? A lot of commentators think it ought to, and several are frustrated at President Obama for not bringing it up. Here's the case for raising the gas tax from liberals, conservatives, journalists, and economists.

  • Economists for the Gas Tax In a New York Times article more specifically against the soda tax, Harvard economist and Bush-era chairman of the Council of Economic Advisers Greg Mankiw covered the much stronger case for the gas tax: "Whenever you go out for a drive, you are to some degree committing an antisocial act." You add to congestion, the likelihood of accidents, pollution, and contribute to global warming. These are known in economics lingo as the "negative externalities" of driving.
Many economists advocate gasoline taxes so that drivers will internalize these negative externalities. That is, by raising the price of gasoline, a tax would induce consumers to take into account the harm they cause after making their purchases. One prominent study added up all the externalities associated with driving and concluded that the optimal gasoline tax is over $2 a gallon, about five times the current level (combining the federal and a typical state's levies) and about the tax rate in many European countries.
  • So Obvious, So Frustratingly Slow to Gain Traction The Economist's Ryan Avent, writing at his personal blog, says that he's "just about given up on the idea that an increase in the gas tax is possible. The Gulf of Mexico is filling up with oil, and no one in Washington is even mumbling under his or her breath that maybe now is a good time to think about an increase." Nevertheless, he says this is the ultimate "easy answer ... You tax gas, you reduce consumption, and you raise the money to once-again provide the country with a first-class transportation system." Would Americans really revolt? He wonders--they're now "increasingly used" to higher gas prices, "and they hate oil companies and oil spills and the dastardly foreign companies who sell us oil."
  • 'Help with the Oil-Weaning Process' The Christian Science Monitor's Francine Kiefer tells President Obama that "if he needs cover, he's got it from an unusual source, Thomas Donohue, leader of the US Chamber of Commerce." Donahue supports the tax as an equivalent of a "'user fee ... If you don't drive on the road you don't use it."
  • Even the Chamber of Commerce Is for It "The oft-repeated absurdity is this," writes Time's Barbara Kiviat: "the federal gas tax hasn't changed since 1993 ... Taking inflation out of the equation, the effective tax has gone down to 12.2 cents a gallon." Meanwhile, roads are suffering and The Highway Trust Fund "is practically bankrupt." The U.S. Chamber of Commerce is "not exactly a pro-tax group," she points out, but they're "clamoring for an increase ... since roads are so important to companies shipping goods and supplies ... "
  • It Could Reduce the Deficit The Atlantic's Derek Thompson interviews Brookings's William Gale, asking him what a "deficit-busting plan" might look like. Gale responds that "the main thing right now is big visible cuts to show that there are no sacred cows. One easy way is to increase the gas tax. Each dollar of gas tax raises a GDP percentage point in revenue."
  • The Right Way Forward: 'If This Isn't Hitting Bottom, What Is?' Andrew Sullivan says Obama needs to do "much more" to promote such measures. "The way to seize this moment is not to attempt to control what you cannot--the gush of oil from the open wound in the floor of the Gulf. It is to remind people of the lax regulation that allowed this to happen ... and to make the case more passionately than ever that we need a strategy to get off our oil addiction."
  • A Conservative Case for a Gas Tax: Drivers Could Save Money Melissa Lafsky appears on Fox Business, hardly a pro-tax forum, to explain the counterintuitive idea that gas tax could actually save drivers money. "The average American driver," she says, "spends around $335 a year repairing his or her car as a result of driving on unrepaired roads ... Now, how do we get the money to repair roads? Through the gas tax! ... If we were to raise the gas tax would still cost you less per year in those additional taxes than it's costing you to repair your car." She further says that though supporting the gas tax is "akin to political suicide," the reasons to push it are clear: "when you do the numbers it's sort of obvious."
  • The Liberal Case for Screaming Until Obama Does Something The Boston Globe's Derrick Jackson is frustrated that Obama hasn't done more to move America towards a better energy situation. "Even as the BP oil disaster continues in the Gulf of Mexico, sales of gas guzzlers zoomed up, begging the question, 'what oil spill?'" He calls the foot-dragging on this issue through the years "political cowardice" and points to the gas tax's success in Europe as evidence that it could propel America into a "clean energy future."
This article is from the archive of our partner The Wire.