Quote:
Originally Posted by steamyromance
...You missed the point i was trying to make. The idea is that higher gas taxes will help the economy, if its not to much trouble maybe you can explain this to me...
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There's no quick and easy way to answer that question. First of all, higher taxes on
anything do not "help" the economy, except with respect to the obvious fact that we need to collect enough revenue to fund the level of government services deemed desirable, and we need to do so in the least damaging way. In other words, preference should be given to taxes that do the least possible harm to prospects for healthy economic growth, and produce the minimum level possible of economy-damaging distortions. Economists speak of something called "deadweight loss" when discussing things such as taxes, subsidies, price controls, externalities, etc. Needless to say, you want to minimize deadweight loss.
To that end, many hold the opinion that consumption taxes are less distortive than payroll taxes, since they do less to disincentivize employment and production. It's also often been argued that higher gasoline taxes would have the further benefit of exerting downward pressure on aggregate demand for oil, and therefore would reduce our dependence on imports. That's no small matter, since we spend about 2% of GDP importing oil which is promptly burned up. One doesn't have to be a professional economist to figure out that that's not a very good situation! Our huge balance-of-payments deficit is one of the most serious structural problems affecting our economy, and imported oil represents a large portion of it.
A higher gasoline tax is not an idea supported only by liberals. Long-time
Washington Post columnist Charles Krauthammer, a well-known conservative, has been writing about the benefits of such a tax for almost as long as I can remember. He notes that it should be offset by reduced payroll taxes (or some other subsidy), so that households in the bottom half of the income distribution would not be penalized.
Quote:
Originally Posted by steamyromance
...I am also wondering why the US will be unfairly punished or taxed and the rest of the modernized world can go on polluting the planet...
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Actually, most of the world's wealthier nations tax gasoline at
far higher rates than we do. Gasoline taxes in the neighborhood of $4/gallon are typical in higher-income European countries, for instance. I mean $4/gallon
tax, not a $4 price at the pump. No wonder they drive all those fuel-sipping cars!
Quote:
Originally Posted by TexTushHog
...However a carbon tax will certainly not be the primary means for reversing income disparities. That will have to come in the form of taxing capital gains and qualified dividends as ordinary income, inheritance taxes, or am outright tax on assets above as certain level.
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Actually, large increases in the tax rates on capital gains and qualified dividends would do very little to redress the huge rise in income disparity over the last several decades. Despite many media reports suggesting otherwise, the extent to which revenue collected from wealthy taxpayers is currently less than would be the case under the tax code and rate structure of the late 1970s, for instance, is miniscule in comparison to the size of our deficit. Please note that it's also miniscule in comparison to the aggregate dollar value of tax cuts for
lower income groups over the last thirty years.
And it's worth remembering that there's a strong inverse correlation between net capital gains realizations and the top statutory capital gains tax rate. That does not mean that cutting the capital gains tax rate generally increases revenue, and vice versa (as some politicians and ideologues disingenuously claim). But it does mean that when rates are pushed to high levels, much if not most of the anticipated additional revenue pulls a disappearing act.
History is very clear on that.
