Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, February 5, 1991 TAG: 9102050437
SECTION: EDITORIAL PAGE: A-6 EDITION: METRO
SOURCE:
DATELINE: LENGTH: Medium
Compelling benefits, these. In contrast, objections raised against a major gas tax seem minor:
Gasoline taxes are regressive. True enough. Poor people pay a larger share of their income for gas - and gas taxes - than rich people do. But income-tax rebates or some other method easily could be found to offset the regressive effect.
Meanwhile, the extra tax revenues, if made available to the general fund, could help protect from further budget cuts some of the government programs that help poor people.
A portion of the revenues also should go toward expanding and improving mass transit - a conservation measure in its own right. Poor people more than rich tend to ride mass transit, and more people of all walks would ride if a 50-cent per-gallon gas tax were enacted.
A recession is no time to raise taxes. Generally speaking, yes. But these times, after a decade of debt-gathering and public disinvestment, are strange.
Deficit spending to stimulate domestic demand normally makes sense during recessions - but we'll have deficit spending in any case. With the deficit so large, increasing it by resisting any tax increase is unlikely to prove economically healthy.
Lower interest rates would help stimulate recovery. But the Federal Reserve is constrained from lowering rates too far, for fear that foreigners investing in America would take all their money and run. (Treasury-bill buyers like high rates.) Foreign money has underwritten the federal deficit; given a policy that reduces the deficit, interest rates could be lowered further, and the stock market probably would respond favorably.
If government experts still believe a gas tax would prolong the slump, they could phase it in, say, over three years.
Markets are wiser than governments. Again true, generally speaking. But the marketplace has seen U.S. dependence on oil imports grow during the 1980s to 50 percent of consumption. That is unwise.
In fact, market demand for decades has responded - wisely - to government subsidization of gasoline's broad costs. Among these are the costs of cleaning up air pollution and securing a safe supply of oil.
They are high costs; in the Persian Gulf they include lives as well as money. And right now, the government is paying a good portion of the tab.
Because gasoline's cheap market price reflects what amounts to governmental price support, taxing gas to raise its price actually reduces market distortions that subsidization has caused.
Surely a tax is less intrusive a means of encouraging conservation than, say, regulating how much gas consumption each citizen is allowed.
A big gas tax would be politically unpopular. True enough, once again, and here we come to the real reason for Washington's reluctance.
Americans generally favor both conservation and unnaturally cheap energy. It needs to be pointed out that, for now anyway, the two are incompatible. Yet the Bush administration resists showing leadership. It prefers to pander to taxophobia.
Opinion polls show growing support for a gas tax. It would grow further if Bush were to observe publicly and pointedly that the war will have to be paid for one way or another. The choice is to pay for it ourselves, or pass the cost to the next generation.
"Leadership brings burdens and sacrifice," Bush said resolutely in his State of the Union speech. But what sacrifice, except from the service men and women and their families, has he asked of Americans?
If he can lead young people into combat in the Persian Gulf, a popular president should be able to lead the fight for a gas tax at home.
by CNB