The Tax We Needed (May 30, 2008)

10May14

Suppose that politicians had raised taxes on gas, starting in the early 1990s, at the very time when Newt Gingrich and his fellow Republicans were so successfully attacking taxation as a Democratic disease. What difference would it have made?

With steadily rising gas taxes, we might have been spared the SUV craze. Some of those people who were killed when their small autos were speared by SUVs would still be alive, as would some of those SUV drivers and passengers who were killed when their topheavy vehicles rolled over. To the extent that people bought smaller and less-expensive vehicles, some of those SUVs’ purchase prices would still be in the buyers’ bank accounts. An enormous quantity of petroleum that the SUVs guzzled would still be in the ground, and huge amounts of money that have now been transferred to oil-producing nations such as Russia and Saudi Arabia would still be in America. To the extent that persons in those nations fund extremist and anti-American activities, the world and this country would be safer than it is.

Now that oil producers have finally forced sharply higher gas prices upon us, consumption patterns have belatedly begun to change. In a way, it was a question of who would get smart first: the Saudis or the Americans. If the Americans had been smart enough to vote for politicians who would have imposed high gas taxes at an early date, consumption patterns would have begun to change back then, and it would be more difficult for the oil producers to jack up the prices now: we would already have built a substantial alternative infrastructure in response to the high cost of petroleum. Instead, now that the Saudis have been the ones to impose the higher prices, in response to rising global demand for oil, it will be very difficult for politicians to raise additional tax dollars without absolutely crippling the American economy. So now, instead of putting those tax dollars to work in the United States, we can put the higher oil cost dollars to work in Abu Dhabi.

Speaking of rising global oil demand, we might have provided China and India with a template for effective, enviable mass transit. Instead of using television to teach the world’s deprived people that they must all crave their own personal vehicles (and must consume inordinate amounts of cement, steel, and other materials in the process, thereby driving up world prices of those materials as well), we might have sent the message that the really smart, up-to-date thing is to have mass transit systems that serve the large majority of people in a far more convenient and stress-free manner than old-fashioned highways could ever do. Because if gas had become expensive enough to discourage its use, people might have welcomed the mass transit systems that gas tax dollars could have helped to build.

It was not fashionable to develop good government or charge high taxes in the early 1990s. If it had been — if, indeed, we had been emphasizing that there is no substitute for effective regulation as a safeguard against financial exploitation — people might have taken Hillary Clinton’s healthcare proposal more seriously. Many of the people who have died because of inadequate health care would still be alive. American healthcare would not be among the worst of the developed world. We would be arguing, not about some candidate’s belated introduction of suitable healthcare, but rather about ways to streamline the Clinton healthcare system to make it even better. The penny-wise, pound-foolish mentality that gave our money to doctors and pharmaceutical companies — instead of paying taxes to benefit everyone — would properly have been ridiculed and dismissed.

If gas had become inordinately expensive in 1993, we would not have had another 15 years of developing unsustainable, far-flung suburbs that require ever-increasing commuting distances and ever-growing amounts of traffic. We would then, not just now, have been talking about liveable city centers; we would have begun taking bicycles and bike paths more seriously. Some of the bicyclists who have been injured and killed by auto supremacy would still be alive and doing fine. The mortgage crisis that threatens to engulf our economy might have been very different or might not have existed at all; certainly the abandonment of whole neighborhoods to foreclosure (and, in places like Cleveland, their ultimate bulldozing) would have been far less likely.

Imposition of high gas taxes in the early 1990s would have prompted people to re-evaluate the total costs of an auto-oriented economy. The huge bill for badly needed maintenance of the nation’s highways and bridges would not now be overdue; people would likely have begun to question new road construction far more closely. Some of those roads and bridges now needing maintenance would not have been built in the first place — especially where the far-flung suburbs they serve would not now exist.

The food system would look different too. We would not be eating potatoes made of oil, as one person described the large amounts of petroleum that our mechanized agricultural system tends to consume. The nutty and apparently inefficient idea of burning food as biofuel, instead of eating it or sending to those who are starving, might never have gained traction. Small farms that provided farm lifestyles and livelihoods to so many families might still be in existence, instead of being driven out of business by taxpayer-funded subsidies to large agricultural firms — firms that foster neither the love of the land and the animals nor the farming community life that so beneficially informed previous rural generations.

We were selfish. We did not want to pay an extra dollar in taxes because, God forbid, there might be a black person on welfare, somewhere, who would get that dollar. Taxes were bad, government was bad, and good government was worst of all. It was a crazy, nonsensical era, driven in good part by people who got their economic wisdom from crank preachers’ interpretations of carefully selected and artfully interpreted Bible passages.

Ultimately, I suppose, we will never really know exactly what would have happened if we had voted for politicians who would have jacked up gas taxes in 1993 — or 1973, for that matter, when the first of the Arab oil embargo shocks hit our economy. We can speculate that, by taking the matter in hand rather than waiting until someone else handed it to us, we would at least have been proactive in shaping our own destinies. What we do know, for sure, is that failure to act is action in itself.

We did things one way rather than the other. We are not too happy with the outcome. Perhaps we can learn something from that.

(This item was originally posted in my old computer blog.)

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