Wednesday, December 5, 2012

On raising other taxes (besides income)

Here is one article (of many, from many different sources) that talks about raising the gas tax.

Basically, it says we should follow through on the non-partisan Simpson-Bowles recommendation of raising the Gas Tax. by about 15 cents.   Why that much?  Well, the gas tax was created to fund the cost to build and repair roads, bridges, etc.  But it only raises about $32 Billion a year, while we spend about $50 billion a year.  The rest of the money gets funded by your income taxes (which basically means Chinese debt).  If we raise the gas tax by 15 cents, then the tax on gas would do what it was supposed to do.

The federal gas tax is currently  at 18.4 cents  a gallon (plus states of 10-33 cents - which totals about 17% of the price of gas).  This is very cheap compared to other countries.  India uses a tax rate of about 50%.   The Netherlands has a tax rate of over $3.50 a gallon (Wikipedia as source)

But we don't need to copy those crazy foreigners.  All we want is the gas tax to pay for the infrastructure used by cars.

An interesting article, but I think we should expand it a bit.

In general, all taxes designated to fund a program (except those designated to fund charity type programs should cover the programs costs. 

The Federal government should either reduce spending on programs or raise use taxes whenever the use taxes are not paying for their own use.   If transportation expenses cost the US government more money than the transportation based taxes we pay, then those taxes should go up, or cut out spending on transportation.

That's how capitalism works.   If you can't afford something, you stop using it, which reduces your cost.  You don't keep the low taxes and the high spending.  Simple economics: Balance the internal budgets before you try balancing the total budget.

Here are a few taxes that I found that, like the gas tax, do not entirely fund the programs they were supposed to fund:

  • Gasoline Tax
  • Aviation Taxes  (though we should cut the ridiculously expensive TSA that has never caught anyone)
  • Tobacco tax   (health care costs to Medicare and Medicaid from lung cancer, etc. exceed the money brought in)
  • Mining Taxes (costs to lean up coal and other mining activities exceed the taxes we get)

Note, this ignores a couple of charity programs, such as Medicaid, Medicare, services to the poor, and of course national parks.   Those are things we want no matter what, not things we want to

I am sure there are a whole bunch of others that I am just not aware about. 

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