Wednesday, February 8, 2023

A Tax Increase That Would Benefit Society

California is raising gasoline taxes — again. The state now has the second-highest gas taxes in the nation, behind only New York.

As a state, California has taxes and spending that are far too high. The debt and problem is completely out of control. Essentially, the California legislature is a lot like our national Congress, without the power to print money. I think the state is headed towards Dystopia in about 30 years.

With all of those things said, if a state has to raise revenue one of the best ways to do it is through gas taxes.

Sacré bleu you say, Frank is calling for more taxes. Well, sort of.

Governments must have revenue, and as much as I hate paying higher prices for gas, it’s better to pay more for gas than for other things.

1. Do we want to encourage people to drive more fuel efficient cars while allowing those who really need them to drive big SUVs? Higher gas taxes do that.
2. Do we want to encourage people to car pool and use mass transit? Higher gas taxes do that.
3. Do we want to encourage people to use hybrid or even electric cars? Higher gas taxes do that.
4. Do we want to encourage people to live as close to their work as possible? Higher gas taxes do that.
5. Do we want to reduce consumption so there will be oil available for export, thus strengthening the dollar and actually reducing the price of oil? Higher gas taxes might do that.

Taxes have a way of bringing about social change invisibly, much like Adam Smith’s invisible hand. When France announced that it was enacting a tax of 75 percent on all incomes of more than a million euros a year, rich people started running like mad. Many went to French communities in nearby Belgium, where the top tax rate was “only” 50 percent.

Soon France will find that it has very few citizens who make more than a million euros a year. And while it’s easy to be envious of these rich people, they do contribute greatly to a nation’s economy.

Higher gas taxes work the same way. People just naturally change their lives in ways that will reduce their tax burden.

Best of all, regulation through reasonable taxation gives people choices. The government bans nothing. People who want to drive SUVs can still drive them, it will just cost a bit more. I prefer a society that works through nudges to a society that works through edicts.

There’s nothing wrong with opposing higher taxes. I generally do. But if we do need higher taxes, let’s have taxes that actually work to benefit society in more ways than just raising revenue.

Frank Hurdle is a graduate of Ole Miss and the Ole Miss Law School He was the 1987-88 editor of The Daily Mississippian.
frankhurdle@hurdlelaw.com

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