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NY Times Columnist Wants To Raise Gas Taxes, Pay Down Deficit

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Author and commentator Tom Friedman, of The New York Times

Author and commentator Tom Friedman, of The New York Times

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Thomas Friedman, an op-ed columnist at The New York Times, often fancies himself an expert on the auto industry.

He was a huge Toyota fan, lauding the company as the model for the entire industry, and openly contemptuous of pre-bankruptcy General Motors.

He does, however, have interesting ideas about the future of industry in a new century when communication is increasingly instantaneous, broadband, and near-free. Or as he titled one of his books, The World Is Flat.

Add $1 to gas tax

His column this morning recommends raising the gasoline tax a nickel a month for 20 months, starting in January 2012.

He argues that such a tax would serve two aims: It would incentivize car buyers to choose more fuel-efficient vehicles against a backdrop of unrest in the Mideast and uncertainty over future oil prices, and it would all be targeted to pay down the deficit.

Or as he says, "Prices are going up anyway, folks. Let's capture some [of] it for ourselves."

Here, we pause for shrieking denunciations, comparisons of any new tax at any time under any circumstances for any purpose to socialism, totalitarianism, perhaps even matricide.

OK, are we done with that part?

Bill Ford 2006

Bill Ford 2006

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Strange bedfellows

You might think the auto industry would join the chorus of Tea Partiers, long-commute suburban drivers, and others who viscerally fear more costly gasoline--or simply think it would be bad policy.

You'd be wrong.

Take Ford Motor Co. chairman Bill Ford, for example. Yes, the one whose name is on the building. He's argued for higher gasoline taxes in public, many times. So has Ford CEO Alan Mulally. Other auto industry executives feel the same, though they're often loath to say so publicly.

The best quote comes from Mike Jackson, the always pithy CEO of AutoNation, the largest auto dealer chain in the U.S.: "Cheap gasoline combined with fuel efficiency mandated by the government is an economic disaster for America.”

The argument is that rather than mandating fuel-efficiency standards, which are likely to make all vehicles more expensive, making gasoline more expensive would let the free market decide what cars it can afford. And what this long-lead, capital-intensive industry needs is predictability.

Traffic Jam

Traffic Jam

What hasn't gone up since 1993?

It's also worth noting that the Federal gasoline tax has not been raised since 1993, and it is not indexed to inflation. So that 19.2 cents per gallon has lost half its purchasing power.

Meanwhile, the deficit in the Highway Trust Fund is estimated at $50 billion or more. That's just to return the existing highway network to a state of good repair, not to build any new roads, bridges, tunnels, or other transportation improvements.

And that problem will only worsen as the rise in corporate average fuel economy--to 34.1 mpg by 2016--further reduces gasoline consumption. Which peaked four years ago, by the way, and may never return to the highs of 2006.

Some legislators have suggested in the past that gas taxes go up now with higher CAFE mileage standards, but in the current climate in Washington, that seems ... ummmm ... unlikely.

2010 Toyota Prius

2010 Toyota Prius

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Missing the forest

Back to Friedman's piece. Among other things, he says that the tax would "help sell more Chevy Volts." He may not have unerstood that despite off-the-cuff remarks by GM CEO Dan Akerson about doubling Volt production, it's not at all clear that the supply base exists to do so that quickly.

But this is all noise level. In the end, we view discussions of individual taxes in isolation--gas taxes, sin taxes, usage fees, whatever--as irrelevant distractions.

Much of the country, it would seem, has not come to grips with the raw fact that even if we cut every last dollar of "discretionary" spending in the budget, it wouldn't get the United States anywhere near a balanced budget if we don't also cut the Big Three--defense, Social Security, and Medicare--or raise taxes, more likely both.

Trees, meet forest.

[The New York Times]

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Comments (18)
  1. nice article, notwithstanding being extremely one-sided. i love the aside essentially mocking folks who would oppose any and all taxes. does a great job at dismissing folks who disagree without saying it explicitly. akin to saying in an article in favor of drilling something like - "ok, let's give tree hugging, limousine liberals who hypocritically live in massive houses while preaching lower carbon footprints a minute to breath". again, fair portrayal but we always miss the overall context re taxes. sure gas taxes have been flat. and even federal income taxes for the evil rich have gone down. but overall taxes - local, state, payroll, income, fees, sales, etc - have not been going down as a % of GDP. that's why we need a holistic overhaul to our tax system - likely generating more revenue - instead of one-off tax increase advocacy like this.
     
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  2. @ModerationIsBest: And that's *precisely* why High Gear Media provides comments! To offer a forum for further discussions among non-profane, non-spambaiter, hopefully articulate readers. We thank you for your contribution.
     
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  3. I disagree with moderationisbest. Sometimes, right is not just a matter of perspective, it's a matter of fact. On this particular issue, taxes haven't kept up with inflation and anyone making over 250k and crying over raising gas taxes while at the same time saying cut the debt is just plain wrong.
    I am not rich and I have a long commute, but if this helps make sure I don't break my car on pot holes all the time, and it helps with the debt, I welcome and support it wholeheartedly.
     
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  4. While the benefits of a tax increase on gas has many benefits as stated in this article, I would like to point out that such an action would not only effect the car industry, but every commercial product in the nation. That is why the government has been reluctant to raise oil prices. From groceries to computers, oil drives the modern era. The effect on the lower class will be far more damaging than the higher classes will "sacrifice" for the nation or environment, as well as continue to widen the gap between the rich and poor.
     
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  5. Larry makes a great argument, much better than the typical "Do you like paying taxes?" argument when this subject comes up. I'd personally vote for raising the tax on fuel to either: reduce payroll taxes or pay down our debt. I'd do this while conceding all of Larry's points. This would also result in fewer cars being sold as people would car-pool more and otherwise drive less thus reducing the rate at which they wear through cars. I'd support this kind of tax because, though difficult, it would not be calamitous. (I think you'd need to phase in any tax increase over several years for it to not be calamitous) And the goal of reducing our dependence on oil is critical because a sudden interruption to our supply would be far more devastating.
     
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  6. Thomas Friedman.... you are on crack! Do you honestly think people are willing to pay even more for gas than they are now? Go back to driving your Prius you sick human being!
     
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  7. Higher gas taxes coupled with rising gas prices due to Middle East disruptions,looks like a formula for economic recovery to me. "Earth to Tom, time to come back...."
     
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  8. I will make an assumption that Mr. Friedman lives in/near NYC; with its large, effective (and subsidized by all of us) public transit. For those of us who live in areas without public transit, transportation options are not so numerous. His proposal should be a transportation tax, and also be levied on public transit to all everyone a chance to contribute. I know that this may be even more regressive than what he proposes, but I thought I might as well throw it out there.
     
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  9. 2 issues I see: (1) What happens to those (hordes) unable to go out and buy a new Volt or hybrid? They get hammered even more. (2) The fantasy that the income would be used to pay down the national debt. When have you EVER seen a pot of money that congress could keep its paws out of? (Think social security...) But hey, if the world is flat, we should all be getting great mileage anyhow.
     
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  10. About time and it should be $2.00 instead of $1.00. Its time America woke up and smelled the gasoline.
     
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  11. So, which is it? Pay down the deficit or repair the roads? Can't have it both ways, which is what is implied.
     
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  12. Thanks for your gas tax idea. I have idea also.There is an expression, Money talks and bull-crap walks. I propose to over tax credit for fuel efficient vehicles and offset that cost by taxing non-efficient vehicles. This would ensure that no MORE debt is incurred and changes buying behavior, but not hurting financially strapped families by raising gas taxes.
     
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  13. Oh yes more taxes will cure all the ills of our society. What a perfect time to pour salt into the wound of this infected economy.
     
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  14. Mr Friedman is living in a dream world if he thinks that one "nickel" of this tax, sent to Washington, would be used to reduce anything. It will probably create a bigger deficit as the politicians raid this cookie jar for their pet projects. Please, spend some time watching our representatives before you come up with a nutty idea like this....
     
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  15. Living in California (U.S. China), where our taxes are some of the highest in the country and those taxes collected being used for some Democrat's pet project, e.g., family planning, will only hurt the working poor. Secondly, putting credence into anything the New York (Commie) Times and its' employee's have to say is comparable to giving Nancy Pelosi access to your Checking Account. Moreover, look what these Government "freaks", drive, Navigator's, Tahoe's, etc., and who foots the gas bill for them including any applicable taxes?
     
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  16. Thanks Bill for the "Earth to Tom"" comment. Real classy. And who said anything about coupling fuel taxes with disruptions in supply?
     
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  17. Sounds like a reasonable plan. I really think the tax should go toward renewable energy to make the shift away from gasoline even clearer.
    However, I tend to agree with people that the money would probably be wasted in Washington. Maybe the tax needs to go directly to a non-profit that builds RE projects.
     
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  18. Hmmm lets just see how bad we can screw up this nation.. we are headed towards 4 dollars a gallon again.. Let throw on another dollar and see how many houses end up with the banks.. This is not the time to add this type of tax.. Its funny everyone talks about abortion laws/gay rights/new taxes.. but no one seems to talk about putting this country back to work.. Lets start off by giving tax breaks to companys that open new factorys here and if you need new taxes.. lets throw a 25% tax on everything coming from over seas.. just an idea.. oh once the country is working again then lets talk about a step up in fuel tax.. but when that point comes.. money from it must be protected and seen it goes towards its goals.. otherwise why waste our time
     
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