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Wednesday, September 28, 2005

What is the Washington Post thinking?

In their editorial promoting a gasoline tax, the Post asserts:
  1. Precisely because consumers are already outraged by fuel prices, a further, tax-induced price increase would force demand down more sharply than it would in normal market circumstances.
  2. ... the sharp reduction in demand would cause the pretax fuel price to fall sharply, too, offsetting the after-tax increase. This is a smart way to make oil producers subsidize U.S. taxpayers. Because of the energy tax, producers would face lower demand and lower market prices; they would, in effect, pay perhaps a quarter of the energy tax ...
  3. Fuel-tax revenue would ease the pressure to raise taxes to plug the budget deficit, so Americans would come out ahead ...
  4. ... they would be getting Saudi Arabia's help in rebuilding the nation's finances ...
To which we say:
  1. Many people, especially the poor, have already lowered their driving to the absolute minimum. For them, a gas tax will not drive demand down in the way the Post imagines.
  2. The Post argues that with a gas tax there will be a reduction in demand and in the pretax fuel price, and that therefore (!) oil producers will be paying "perhaps a quarter of the energy tax". What? They will be paying less tax, not more. Or perhaps the Post considers lowering business activity to be, in essence, paying a tax. That's nonsense.*
  3. This is the most outrageous. In order to "ease the pressure to raise taxes to plug the budget deficit", in order to let Bush get away with his cuts for the rich, institute a gas tax on everybody.
  4. A gas tax in the United States will a be way of "getting Saudia Arabia's help in rebuilding the nation's finances"? No. Saudi Arabia will not be paying anything.
The Post is falsely asserting that with a gas tax, the nation's finances will be fairly adjusted, and that oil companies and Saudi Arabia will be shelling out big money in the process. Can you believe it? No mention of fuel economy standards. No mention of public transportation. That's the kind of talk you'd expect to hear from Exxon/Mobil or the Saudi Embassy. Is that who the Post represents these days?

* It may be argued that by having a gas tax, oil companies will lower their prices and profit margins, and that lower profits is "paying a price". Perhaps. But they would not, as the Post asserts, "in effect, pay perhaps a quarter of the energy tax." (We assume that the "in effect" means paying taxes, though not the gas tax.)



4 comments

I'm sure most rational people reading that editorial will have the same reaction: "WTF?!?!?!"

I am continually astonished and distressed that the WaPo editorial board has decided as a matter of policy to not only be as ignorant as humanly possible, but also to ensure that their ignorance is paraded as prominently as possible at every turn.

Derelict

By Anonymous Anonymous, at 9/28/2005 10:40 AM  

Gas taxes allow those who use cars & hiways to contribute to subsidies for the poor who use mass transit.

A $1.00 a gallon tax that went directly to mass transit (bus, train, subway, etc) would be best incentive for transformation of US society.

Why do 'Murricans expect to drive in one-man vehicles on subsidised hiways? Are they crazy, or just greedy pigs?

By Anonymous Anonymous, at 9/28/2005 1:31 PM  

WaPo is obviously shilling for big oil again. The first action is to investigate the oil companies for price gouging - which they are obviously doing.

Then we need to temporarily freeze gasoline and home heating oil prices at a level that is lower than the current price but adequate to insure that the oil companies won't go broke.

Then we need to repeal the highway bill, put a 10-year moratorium on new highway construction, and put all the money saved into mass transit and high-speed rail.

I could go on, but pretty much any idea is better than the one WaPo came up with (or got from the lobbyist they had dinner with last night).

By Blogger Charles D, at 9/28/2005 1:45 PM  

What oil companies have found is that demand is quite inelastic for gas. People are quite willing to pay $2.50 per gallon. They own their house in the 'burbs and their honking great SUV and they like both, and they're willing to pay. They grumble, but they pay.

The question oil companies are asking is not when will the prices go down, but why they didn't rise sooner.

By Anonymous Anonymous, at 9/28/2005 2:33 PM  

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