7.6.08

When Tax-Hikes Make Sense

As anti-tax as I generally am, I have to admit that there are times when tax policy, including significantly increased taxes, can and should be used to provide certain incentives for people to behave in desired ways.

Starkly contrasting Hillary Clinton's and John McCain's idiotic proposals earlier this year to suspend the federal gas tax, Charles Krauthammer proposes further increasing gasoline taxes because, as we are seeing now, higher gas prices cause consumers to alter their driving and car-buying habits, which in turn puts pressure on manufacturers to produce more fuel-efficient vehicles. It is a market-based approach that would be much more efficient, and more beneficial to the national economy, than a government-mandated corporate average fuel economy or ethanol mandates or suing the Saudis or whatever politically-inspired energy scam is en vogue this week in Washington, DC.

Will people like it? No. Will it be difficult to adjust to, at least in the short-term? Yes, especially for politicians for whom any tax-hike is a career-killer (which is all of them). But it would be effective.

No comments: