Sunday, December 14, 2008

Raise The Gas Tax: Another Bad Idea From Liberals

The left wing media has been begging for an increase in the gasoline tax. In their belief the Government is missing an opportunity to tax Americans with gasoline prices being as low as they currently are. However, nothing could be further from the truth. America is in the midst of a deep recession and any increase in taxes now would just further deepen the recession. Michael Kinsley wrote in Time that he believes the government is losing a treasure trove in tax revenues if the gasoline tax is not raised. Michael Kinsley like most liberals do not understand the dynamics of economics, taxes, and social welfare.

Michael Kinsley believes the government is forgoing $500 billion dollars in tax revenues. Kinsley arrives at this figure by believing that the government should tax us the difference between the price of oil this summer and the price of oil today. Kinsley is arguing for a tax increase that would take us back to $4.00 a gallon gasoline. Kinsley and other liberals do not understand that the gasoline tax is the most regressive tax we have to pay. The taxes come from predominately the poor and middle class. The ripple effect of these taxes permeates to the lowest level of society and harms the poor, the elderly, and those living on fixed incomes.

The high price of oil will cause the price of all goods and services to rise. We saw the prices rise this summer. Businesses passed along the increased cost by either raising prices or charging "fuel surcharges". Additionally, the price of food products increased because of shortages caused by food products being utilized as alternative fuels and the increased cost of cultivation and transportation. These increases in the goods and services in the United States disproportionately harm the poor and middle class. The effect of increasing a regressive tax will do nothing to help the economy.

Liberals also do not understand that this tax increase will kill the economy. Any tax increase especially when the tax increase is a consumption tax will have the opposite of the desired effect. Increasing taxes on the consumption of gasoline will cause people to make further cuts in their consumption of fuel. Instead of heating their homes to a livable temperature many will reduce the temperature to the point where some will risk their lives and health. Increasing a regressive tax will also leave the middle class with less disposable income.

A middle class with less disposable income will not help to spend our way out of this recession. Consumer spending is the fuel that drives our economy. When the middle class is pinched with tax increases they spend less money on everything with the exception of necessities. Less consumer spending will mean businesses will start laying off more employees. The increased unemployment will then need further governmental assistance for which is already out of control.

Any increase in taxes now will deepen the recession. Increasing energy taxes will send America over a cliff. We are on the edge of depression right now. Energy has come down to levels people can afford. This low price may result in higher consumer spending which will get us moving in the direction of expansion. There are many reasons for the deep recession we are currently in. We can not focus on one sector while believing the other economic sectors do not matter. America is focusing on the financial and housing sector. However, high energy prices this summer caused the frail economy to tip over the edge. Another factor in the deepening recession is the high cost of labor. In July the unemployment rate began to increase dramatically. It is not a coincidence that there was another $.70 per hour increase in the minimum wage. This increase had the effect of reducing the number of jobs available for our part time and young workers. Small businesses hired fewer employees and some may have even laid off some people simply due to higher labor costs.

All in all this clamoring for a liberal agenda will kill the economy once and for all if enacted. Raising the regressive gasoline tax will hit the poor and middle class. This will reduce consumer spending and increase unemployment. This combination will decrease the tax revenues taken in by the government. At the current rate of deficit spending this year will increase our debt by well over $1 TRILLION DOLLARS. Less workers will further sink the economy and push the US to the brink of bankruptcy. Liberals like Michael Kinsley need to stop and think before the express their opinion. Their opinions will kill America. Raising the gasoline tax is another bad idea from the liberal and Socialists of the left.


Mberenis said...

Grrrrrrrrrreat blog!!!

Don't let the recession get you down. When was the last time you looked at government grants? With the bailout, there is more money than ever. Don't miss out.

My Grant Blog

bob fairlane said...

Who is this Michael Kinsley. I saw the article, and thought, wow what a jack***. Maybe he has money to burn, but in case he didn't know, tax on gasoline is already 35-45c/gallon in TX. Where the heck does that money go besides in the pockets of all the mexican construction cartels.

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