A panel has recommended a increase in federal fuel tax to combat the decrease in consumption by motorists. This mechanism seems to be consistently used by the government. My county is planning to raise property taxes to compensate for the heavy reduction in property prices.
Here are a few points that can be considered before raising the fuel tax.
- Can the government not do the same as its citizens? Eliminate pork and focus on the essentials? I know this will not happen as the emphasis has been on more government spending.
- Maybe a portion of the $700 billion bailout could be used to repair the roads. Roads are part of the infrastructure and it is likely the money will be spent inside the country.
- The recommendation were probably made when the prices were high. Now that the gas prices have plummeted over 60% ($1.55/gallon), I do not feel the pinch as much and am open to driving more. This may increase consumption and demand and hence raise prices and make more money to build roads and bridges. We may just need to wait a little.
- and the most important point; More taxes may drive down consumption. Partially caused by increase in cost as demonstrated earlier this year and partially due to the common man's frustration. Politically it would be difficult to explain the increase in taxes against the background of the bailout of the banks and auto makers.

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