Monday, July 10, 2006

Living With High Gas Prices

The lonely libertarian had an epiphany a few months back about gas prices. A Connecticut State Senator had proposed a temporary gas tax reduction as a means of lowering prices at the pump. Like any good libertarian, my first reaction was enthusiastic. After all, cutting taxes is always a good idea, right? But then it occurred to me why we have gas taxes in the first place- to pay for and maintain our road and highway systems. And as libertarian as I am, it's still hard to work myself into a tizzy about paying for roads. Even for the hardcore, get rid of all government service-libertarians, you have to admit, as far as eliminating government services piece-by-piece, roads would have to be near the bottom of the to-do list. The very bottom.

And as far as gas taxes go, they're about as fair as taxes can be- they're supposed to pay for the roads, and you only pay for as much gas as you actually use. Those who drive more pay more in taxes than those who drive less. I'm well aware it doesn't quite work out this way, but in theory it's almost a pay as you go sort of system. It's actually quite a good model for how taxation should work.

Now, after I heard this Connecticut State Senator's proposal, these ideas were rushing through my brain. Given that Connecticut- like all states and unlike the federal government- must actually work within a budget each fiscal year, a gas tax freeze is actually deceiving. That money would just have to be made up from somewhere else, later on. In other words, the money is still coming out of our pockets, and the gas tax freeze was just a clever political ploy.

Now why do I bring this up today? Because gas prices remain a sore subject, and the public at large still wants "solutions." But for all the complaints, what do high gas prices actually mean- Well, at the pumps, a dollar per gallon increase on a driver that might use two tanks per week amounts to around 24-32 dollars more per week. Or 96 to 128 dollars more per month. Yeah, a lot of money, but how many of us pay more for phone, cable, and internet services? And how many of us pay a similar price for our electricity every month? (Or perhaps a lot more for those of us who like to waste electricity.) In fact, most of us pay a lot more in taxes every month than we do for gasoline.

I don't mean to downplay the effects of high gas prices. My point just is that the benefits of modern civilization have their costs. I have no numbers on it, but I challenge anyone to find me a time in human history where a society spent a greater percentage of their income on entertainment related expenses. We make a lot of money, and we give a lot of money away to pay for our extravagant (when compared to most people throughout history) lifestyles. 15 years ago, none of us had cell phones or the internet, and now most of us do. We've been okay with those additional expenses, and we'll be okay with higher gas prices too.

Just remember- higher gas prices are a hell of a lot better than gas lines, and sales every other day.


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