The co-chairs of President Obama’s National Commission on Fiscal Responsibility and Reform have included this “valentine” in their lengthly proposal: A 15 cent gas tax hike by 2013 to help reduce the national deficit.
Though it might rile up RV owners — I know some right-minded ones around here — some are starting to voice support for the measure.
“Then there’s the provision to raise gasoline taxes gradually by 15 cents per gallon between 2013 and 2015 – an idea worth exploring,” writes right-leaning columnist Deborah Sanders in the S.F. Chronicle this morning.
“It’s a tax increase that would achieve some of the energy efficiencies that Democrats have tried to force through regulation. It’s a consumption tax that everyone would pay, including the 36 percent of income-tax filers who, according to the Tax Foundation, paid no income tax in 2008.”
“Given all the circumstances, then, it’s really about time a 15 cent increase at the pump is implemented,” writes AltTransport. “At worst, it will force people to take public transportation or drive less.”
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I am already riled up about taxes Jeff and would like to point out that raising taxes is not the answer to the lack of cash for the government to keep spending.
I wish I had the time for a deeper response but I’m leaving in an hour….for a motor home tour around Lake Tahoe with 7 family members. We plan to consume….and will spend money going around the lake….their local economy needs the support.
If the gas prices keeps going up, we can’t go as often, which means less cash in the registers, which menas more businesses might have to close, which means increased unemployment, which means California borrowing even more to pay for the “benefits”.
Increased taxes will mean more depression for everyone.
Mike,
Big deficits call for tough choices. Under the proposal, the money only would be used for roads and highways. If you do the math for a trip like that, especially with 7 family members on board, it’s not a deal breaker, really. Try brunch at the Fire Sign Cafe across from Sunnyside. There might be a wait, though. It’s very popular, even in this economy.
Yea, I did the math, just like I did when the law enforcement quarter cent sales tax was “dedicated” years ago but has been highjacked. Has the lottery solved any school financial problems? (it’s sort like a tax when you think about it)?
Have you ever worked for the government? I’ve seen the waste and ignorance (and arrogance). Do your gas taxes go to filling the pot holes? Nope….but there are sure plenty of public busses running around with not many passengers.
Nevertheless, it was an awesome trip Jeff, almost stopped by your place but ran out of time. The weather was awesome, the scenery breath taking. I’ll let you know when I post the story and photos on my blog.
Mike,
Well if you did the math, I suspect you calculated that it’s a pittance to drive 1 1/2 hours to visit one of the gems of the West. Sure beats playing golf on packed sand in West Texas. Be assured that your tax dollars will be well spent to help maintain the roads that get banged up when your heavy motor home chugs up the hill.
Looking forward to your photos.
Will be interesting to see if the Tea People, who are being co-oped by Corporate Lobby as I type, come out in support of any tax increase. FreedomWorks is using Lobby types for “Orientation” by Tea People Types elected to Congress. Tis this weekend in DC area.
I have a post up at my blog if your are interested in more details.
I am sorry MIke, I respect your point of view and your choice of recreation, but your response is a classic example of why reducing the debt is going to be so difficult.
Everyone has a pet.
I am under no illusion that the National Commission on Fiscal Responsibility and Reform recommendations are going to be adopted without vigorous debate and significant change. But we have to be willing to look at the entire picture, and not make decisions based solely on the individual pieces. If we get into each interest protecting its sacred cows, nothing will be done.
And if nothing is done we will face a bond crises as severe as the real estate triggered collapse 2008; and will have walked into it knowing the danger in advance and not having done anything to stop it.
On your trip around Lake Tahoe reflect on the point that more than 50% of all income in the Lake region is transfer payments, primarily pensions, private retirement benefits and social security. These payments are primarily secured by bonds, and a bond crises will crush the value of these funds.
I fear the couple of hundred dollars you are going to drop into the Tahoe economy today pales in comparison to consequences of a bond crises wiping out 25% of the economy.
This is not, and should not be, a partisan issue.
Here is the list of the Co-Chairs proposal–it is a good place to start a real debate about what gets cut.
But if I am going to cut social security, top marginal tax rates, military pay, and the home mortgage deduction, I really don’t give a hoot about gas for your RV being 15 cents a gallon more.
http://www.fiscalcommission.gov/sites/fiscalcommission.gov/files/documents/Illustrative_List_11.10.2010.pdf
Social Security is not cut in the proposal; the rate of growth is cut. That is a big difference. And most of us will be dead before some of the proposals kick in . . .
Mr. Frisch ~
You raised a couple of valid points;
“….we have to be willing to look at the entire picture, and not make decisions based solely on the individual pieces. If we get into each interest protecting its sacred cows, nothing will be done”.
“This is not, and should not be, a partisan issue“.
I could not agree more. Since Jeff doesn’t get a great deal of conservatives trying to make their point on his blog, grant me a little patience while I express myself -
Conservatives like to conserve….and when waste, fraud and abuse in just about every government program sucks billions away from the intended use, it becomes mandatory, first in foremost, that we STOP SPENDING, prioritize the programs, clean them up, and do everything possible to eliminate the fat. Trust me, the fat has not been eliminated and won’t be until there just is no money and programs go completely bankrupt.
I understand the big picture and understand the need for government-funded programs. But I cannot support ANY tax increase until I see movement in the ‘right’ direction.
Clean up (or eliminate) the sacred cows, show me leadership from both parties in agreement and I would probably support their combined agenda. Unfortunately, the political machine is self-motivated and interested only in their own perspective.
When the political leadership can agree, come together, prove everything has been done to clean up the mess, then I would agree to an increase on a temporary basis to see where it goes, and only if it is proven to be the only solution.
Obviously, I’m not holding my breath, but I am encouraged to read that there are some out there who support your opinion.
Thank you for taking the time to address the issues.
Mike,
You are talking about a great formula for success.
I have little hope that much will change at the federal level to solve those intractable budget problems.
I have a great deal of hope that Jerry Brown and the Democrats in the state leg will be able to solve our huge state budget problem. Let’s just focus on that for awhile. If we can make progress there, maybe it’s exportable!
Michael A.
Exactly what I was suggesting: “No pain, no gain.”
BTW, You want to hear people in Tahoe screech? Eliminate the mortgage deduction on second homes. Now that’s real money.
Jeff,
This is thinly related to the subject.
There was a pretty bad freeway crash yesterday in Nevada City.
I see no mention of it in the Union or on this blog.
Do you know what happened?
Judith,
I don’t have many details and the CHP office is closed, but my wife saw a CHP and fire truck on the scene of that accident in NC when she was driving by. It involved a Volvo and a small sedan, she said. She agreed it was serious. I’ll post something when I hear more.
Judith,
Here you go:
http://www.theunion.com/article/20101114/BREAKINGNEWS/101119858/1066&ParentProfile=1053
Real money can be had by taxing stock trades at 25 cents per $100.00 traded.
As the NYSE alone has a volume of 40 billion DOLLARS/DAY, the gov would get $100,000,000 per trading day.
Too bad micromove computer programming traders would be hurt. Nobody has shown me yet how they contribute anything to the economy, other than dribble down tiny leaks of money. They create nothing.
I’m so tired of people whining about taxes – our tax burden is hardly onerous – just whiners that want a lot of services and priveleges for little or nothing.
Suck it it up.
Mr. Barry ~
I don’t think the majority are “wining about taxes”.
The problem is with the elected officials that become unresponsive to the wishes of the masses. They have not been listening. Tea Party types and other conservatives are pissed off because Washington stopped listening.
Politicians became, over the past few years, ‘unresponsive’ to the will of the people. California is in debt to the tune of 25 billion, the Feds to the tune of trillions. When do we stop this madness? This is financial suicide.
I have NEVER heard a conservative advocate doing away with all taxes. The problem is HOW the government is spending what they have, and now they are spending what they DON’T have.
My wife has already had to take a 6% cut in pay as a school teacher, and all longevity increases and additional education increases have been frozen. As her retirement is affected by the final three years top salary, this will affect us dramatically for the rest of our lives. In addition, the money we spent on additional education now has no financial payback.
You can pay the additional 15%, who cares? If the rich intend to keep the economy and taxes frozen where they are, soon gas will be so expensive they’ll have no choice but to sell the motor home as a permanent dwelling to a still working member of the vanishing middle class.
Douglas, I could not agree more–there needs to be a sense of SHARED sacrifice here. If the sacrifice is not shared the crash will be shared.
By the way, the proposal was not 15% increase in the price of gas, it was a 15 cent increase in the gas tax, which would be a 5% increase in the price.
My staff took a good hit with the decline in the economy. We laid out the problem, explained the consequences, frankly discussed the options for cutting costs, and cut 20% out of our salaries and benefits in January 2009. Guess what? My young staff immediately got it, and said, OK we can do this together.
People are realistic–they know we have a problem and are ready to do something–if we have the leadership to pul it off.
Absolutely Steve. Give the people those raw data, show them the options, then make them sign on the dotted line. All sides, all income levels, no pets.
I have a lot of faith that Jerry Brown is going to do this. Obama, not so much.
Even if the rich lose their tax freedom, they can make back the money by closing the open internet and charging fees. Won’t be hard with the many “God on Our Side” freshman Congresspeople.
http://www.scribd.com/doc/41002510/On-Advancing-the-Open-Internet-by-Distinguishing-it-from-Specialized-Services
I only have a couple minutes to post so here it goes.
Why is it working class (people who physically work for pay) or unemployed are the ones who get nailed every time there is a tax increase.
Consumption taxes are regressive tax system. Here is how we fix our national debt within ten years.
Raise import tariffs (average 25%) back to pre-Reagan levels along with Top Marginal Tax Rates (74% after first $3 million is made).
That is what built up the American middle class and the attainable American dream.
Fascinating comment Ben. I have wondered how long it would be before someone put trade policy and the return of tariffs on the table. I definitely agree tariffs need to be discussed.
I guess one question I would have is: if tariffs act as a tax on incoming goods, increase their price, and make American made goods more competitive with foreign goods, how is that different to the middle and working classes than a tax would be? Isn’t a tariff just as regressive?
Of course we would have the benefit of having an economic driver that would bring some American jobs back, but I wonder what the marginal cost of labor difference is now between American labor and off shore labor for most manufactured products? Do you have any idea? Wouldn’t we only grow jobs in the areas where the marginal difference in labor cost would be smaller than the value of tariff?
Also, how would raising import tariffs be negotiated with our trading partners, and the signatories to NAFT. GATT, etc? The basic concept being advanced by American free trade advocates has been that in the world of modern communications, travel and trade, the way to address inequity flowing from differing labor rates would be to require similar global labor, environmental and political standards. That has proven impossible, in my humble opinion.
I am ready to hear a rational argument for why we should reject globalization and return to national trade policies that control access to goods based on tax policy.
What is it?
By the way Ben, Congratulations again on winning the Congressional race in Truckee.
Steve,
I am out of the country at the moment so I don’t know the final tally’s of the race yet but if that is true that is incredible.
When we put tariffs back in place and have a rationale trade policy instead of a monetary policy, we have a monetary policy with China and keep devaluing the $ because they will not raise the value of their currency, at this particular moment in time we cannot win this battle. China own us!
We have been told for 30 years now that tariffs, regulation, and labor unions destroy economies, I challenge everyone to take a look at this graph
http://z.about.com/d/uspolitics/1/0/m/G/096.png
compare
1950 – 1980
TMTR 74- 91%
ave import tariff 24- 30%
Private Sector Unionized work force 25 – 35%
1980 to present.
TMTR 15% (capital gains/dividends Today) – 35%
ave import tariffs 2% (today) – 24%
Private Sector Unionized work force 6% (today) – 25%
Free trade really started under Nixon but Reagan really broke the doors open.
Which policies created?
balanced budgets
Strong Middle Class
World Innovators
Paid down national debt
I’m not sure if this answered your question but I am out of time on the computer for the day but will post much more about it in the near future.