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Kick ‘Em While They’re Up, Kick ‘Em While They’re Down: The Return of the Gas Tax

Falling gas prices are finally providing that elusive economic stimulus. So the natural reaction of the political class is to call for a giant new gas tax.


Here’s one of my favorite stories about how the mind of a government official works.

A few years ago, I was in a grocery store in Charlottesville when I overheard a conversation between two shoppers, one of whom was clearly in some position of authority (the City Council, I believe). This was right after the financial crisis. The real estate market had just collapsed, a whole bunch of local development project had just been canceled, and my wife was telling me about all the guys she knew in construction who were desperate for work. Yet here was this lady arguing for why the local government should not approve any new commercial building permits. The danger, she explained, was the prospect of “economic ghost towns,” retail areas where several shops had closed, hurting business for the others. Until these “economic ghost towns” were filled back up—whether anybody wanted them or not—there was no good reason to approve permits for new commercial construction.

I just couldn’t keep quiet and had to interrupt: Only in Charlottesville—a left-leaning university town—could an economic downturn be used as a reason to block new economic activity.

But you have to understand the outlook of those whose faith is the creed of government. Everything is proof of the need for more government power and control. The local economy is booming? Let’s hold back on building permits because we don’t want to grow “too fast.” The local economy is tanking? Let’s hold back on building permits because we don’t want “economic ghost towns,” or whatever. On the national level, in an economic collapse the government needs more money for “stimulus.” But if the economy is booming, that means we can afford higher taxes, right?

All of which leads me to the latest example. Falling gasoline prices have been a huge windfall for the economy, finally providing that elusive economic stimulus and doing something to improve the daily lives of the poor and middle class. Wages still aren’t up, but at least everyone’s money goes a lot farther when we fill our gas tanks.

So the natural reaction of the political class is to immediately call for a giant new gas tax. No, really. And it’s not just lefties. Even conservative commentator Charles Krauthammer, who is in most other respects sane and rational, joined in. But at least he was honest about the impetus: “The only time you can even think of proposing a gas tax increase is when oil prices are at rock bottom.”

But of course oil prices fluctuate. It’s hard to say for sure why they are low today or how long they will stay that way. If you can predict that with any kind of certainty, I hope you will invite me to visit your yacht when you make a billion dollars from oil futures. Wait, you mean you’re not going to risk your retirement savings on that bet? Very well, then. Yet that’s what advocates of a gas tax increase always do: ask us to bet that because we can supposedly afford a little extra money today, we should enact a new tax that will last forever.

But don’t bother to examine this particular folly. You can understand it only if you understand that in some minds there is a constant imperative for the expansion of government. The only question they ask is whether they can get away with it. When gas prices are low, they think they can, so that is what they advocate. But the tax itself is not a considered economic measure or a means to some other end. It is an article of faith and an end in itself, because government is an article of faith and an end in itself.

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