Redstate

Just a typical, small town, white girl...

"Nothing works like freedom, Nothing succeeds like liberty"
Kyle

BUT! with a real big caveat. That we simultaneously lower other taxes. A big tax on fuel would burden our economy.
ALSO
we have to simultaneously end all the other stupid ideas like ethanol subsidies and cap and trade schemes.

Then it would make great sense to tax petroleum based fuels, thus earning revenue, encouraging conservation, and making alternate sources of energy more attractive.

But it must be revenue neutral.

"Nothing works like freedom, Nothing succeeds like liberty"
Kyle

I think people need to be clear about why they think total taxation should be constant or even lower.

The payoff for shrinking the amount of taxes is ideological. People will have more personal freedom to spend their money how they want to spend it when taxes are low. Low taxes reduce the drag of Government on Liberty.

But there is not much evidence that lowering government spending will improve people's material well-being...except for those that get the largest tax cuts.

Promising a better "Economy" instead of "Freedom" is a bad idea. Tax Cuts don't give the people cake. They make the people free. Advocating tax cuts as a path to More Freedom is a much easier and intellectually defensible case to make.

"Nothing works like freedom, Nothing succeeds like liberty"
Kyle

...the "Better economy" case for tax cuts does not seem to be.

I have not seen numerical fact-based evidence that cutting taxes improves economic indicators (althrough someone may post something to set me stratght soon).

If the case for tax cuts is linked to promising large numbers of people that it will raise their wages, increase their purchasing power, or increase their government benefits, people will turn aginst that case when these benefits fail to appear. This is happening today.

Instead, it should be pointed out that tax cuts increase self-reliance and individual freedom. That case is irrefutable.

But if you are still here, you are an idiot.
Imposing a tax on something to force changes in its use is the exact opposite of a 'market-focused way' of doing anything.

If you burn a gallon of gas, you have created pollution, you have used a Public Road, and you have forced us to send aircraft carriers to protect your oil.

These things cost money. I take the train, so I don't see why I should pay. I want to add the cost onto the price of gas, so that you can pay your own way.

But what about us po folks that ain't got no train to take?

"Government of the people, by the people, for the people."
A. Lincoln

...near a stop on NYC's subway system. I will rent it to you.

You will have to pay rent, of course. I don't belive in Welfare.

Or, if you wish to continue your Expensive Rural Lifestyle, you can get another job to support it. Just don't come begging to me for a Highway Handout.

"Government of the people, by the people, for the people."
A. Lincoln

I mean, besides take the train to get there. A train which I am assuming requires no government subsidy to get you there, since it runs on wind power generated by blowhard passengers.

...specifically the Tech sector. What do you do?

The Transit Authority in the NYC area gets 70% of it's money from tolls and fares. The remainder is from taxes, notably a Real Estate Tax.

Since proximity to a train station brings a massive increase in property values, a Real Estate tax is a (imho) a very fair way to fund the system. I own property near a station...even though I may never take that particular train, my property is highly-valued becuase it is on a line.

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Molon Labe!

are you long CSX, BNI, and UP?

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Molon Labe!

Talking up one's holdings is unethical and, in many cases, illegal. I know you're just joking and not accusing me so I won't get indignant.

If you want to find out my favorite ticker, you must pay me!

Anyway, I don't cover Transports.

You don't cover tobacco either. If so, you might realize I was talking about domestic tobacco companies raking in the cash, companies such as CG, MO, and to a lesser extent, RAI. My point is that there IS a continual smoking decline but that is not lowering the amount spent on cigarettes. Has the price of tobacco declined as much as cigarette consumption over the last 30 years? no it has not.

The main reason domestic smoking has declined is the Surgeon General's report of 1964 and a general societal view that is more hostile to smoking than almost any legal vice. I am glad there are fewer smokers, but taxes on smokes are not the primary reason for the decline in domestic consumption. However, these government taxes, that were supposed to be spent on anti-smoking initiatives, have turned out to be a regressive tax used for wasteful government spending.

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Molon Labe!

smokeless tobacco AKA "dip" is heavily taxed and regulated as well. Yet, smokeless tobacco consumption has been GROWING for years.

http://www.researchandmarkets.com/reports/548414

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Molon Labe!

...but this jumped out:

"Sales in the smokeless category primarily depend on macro trends, which include disposable income growth. Strong consumer buying power and steady gas prices are generally supportive of premium growth during the year 2007. "

Now if sales depend on "disposable income" that means this Smokless Tobacco Consumers are "price-sensitive". This means that if you raise the price, they buy less.

The tobacco conversation we've been having started because someone used tobacco as an example of a good whose sales would remain constant even if the price rose. An analogy was made that Gasoline (the original topic) behaved the same way.

I think enough data has been posted to show that:

1) If you raise the price of something, people will buy less.
2) Both Gasoline and Tobacco fall into the "something" category.

And I want to be clear about where I stand. I am not anti-tobacco. I am not anti-gasoline. I just want people who use gasoline to pay for the roads, pollution, and military commitments Gasoline requires.

I believe that once the Full Cost of gasoline is paid at the pump, the Market will find ways to increase efficiency. We can let the Market solve this problem, and the sooner we start, the better.

users are price sensitive. To this point this has not caused people to quit using the product, it has just caused many to "trade down" to price/value products (cheaper).

The changes in the smokeless tobacco industry have mostly occured because of a free market place. Some guy realized if you make cheap dip, of lower quality, there would be a market for it. To me this is example number !,234,567 that competition and the free market result in innovation, not government tax rises.

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Molon Labe!

You have a legacy rapid transit system connected to a city that never got rid of it's commuter transit systems.

Those of us in the majority of the flyover country do not have that luxury. We live in cities that bought into the 1950's "Gas is cheap, move out to the Burbs and let the inner city rot, and we don't need trains into town while we're at it" lie. Most of us don't have the property tax payer funded luxury of jumping on the train to town.

You can bet your expensive property that if I had that opportunity, I'd take it.

Get out of my wallet and back on your train, sir.

"Government of the people, by the people, for the people."
A. Lincoln

I pay taxes in Fulton County, GA so you can ride MARTA from the airport directly to the strip club of your choice in Midtown Atlanta for less than two bucks. Just watch out for the puke on the seats, the urine-soaked elevators in the stations, the surly MARTA employees, the panhandlers and gangstas.

but the day is young, so I could be wrong.

BTW, the subway is $2.00 a hop. Knowing the labrynthine traditions of public finance in New York, and the flow of funds between Albany and New York City, let alone federal transportation subsidies, I think one can assume the highway is subsidized.

Let's say someone just uses the subway. $80 per month, maybe, which sounds great. But rents in New York are high for apartments that are an easy commute, and ownership costs for condos/townhouses are astronomical.

People in New York's suburbs can't get by with just the subway; they have to take the train. On Long Island, that's another $200-300 per month. As for taxes on Long Island, fuhgheddaboudit!

...only 70% of the MTA budget comes from tolls and fares. This includes the LIRR and Metro-North light rails.

The fact that rents are high for places with good commutes is telling...that's the Free Market talkin' to ya...telling you that a small (30%) government subsidy is providing HUGE value to consumers.

highly paid Wall Streeters whose robust incomes drove up the property values in the first place. The government is simply throwing its money away on subsidizing them, which could be better spent on the poor or by being rebated back to the middle class.

...so whatever I get from the Trains I give back in April. Plus extra.

That's a subject for another day, though.

The point is, NYC keeps a lot of cars off the roads and bridges by making property owners subsidize a part of the cost of trains. This means less pollution, and makes NYC a great place to live. Property owners like me get high property values in return and can charge high rents to people who want to live near the trains.

"ma deuce says no truce"

I guess it is clear you slept through that economics lecture as well.

This is a topic that demands numbers, not anecdotes.

If you raise the Capital Gains tax, for example, you make some investments more expensive. I can see where this would reduce investment. If you define "an economy" by "purchases of capital goods" then you probably want to lower the CG tax.

But if we are concerned about employment levels and wage levels, I've not seen fact-based evidence that reducing Capital Gains (or Income, Sales, or Payroll) taxes will increase the number of jobs or raise wages. Many people say it is so, but I've never seen any back-up.

I really think that our current debate on taxation is better grounded in a "Liberty vs. Tyranny" argument rather than a "Prosperity vs. Poverty" argument.

and that is why you have not seen the proof. Since you are so interested in supply and demand, let's use that example. If taxes are lowered, the amount of cash to pay employees will rise and the cost of hiring an employee will drop.

The employer will spend less money on the employee, the employee will have more money to spend, and the company will keep more of its earnings. Yet you can't see how cutting taxes will help the economy?

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Molon Labe!

Basically, you are saying that the employees and shareholders will get more money and the Government will get less.

The Government will spend less...so there will be less cash going into the economy.

The Shareholders and Employees will spend more...so that will make it a wash.

Other than the ideological goal of returning decision-making power to individuals, I fail to see how anyone is made more productive.

Unless you assume that the projects the Government undertakes will be less efficient than the ones the Private Sector undertakes. While the notion that the Private Sector is more efficient is widely believed, I've not seen any fact-based or number-based evidence showing this is true, only anectdotes and stories.

"_Unless you assume that the projects the Government undertakes will be less efficient than the ones the Private Sector undertakes. While the notion that the Private Sector is more efficient is widely believed, I've not seen any fact-based or number-based evidence showing this is true, only anectdotes and stories."

you have never heard of government inefficiency? Where were you raised Cuba? or maybe just Manhattan or Berkley.

discussion over.

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Molon Labe!

Just a typical, small town, white girl...

...and I see that they generally have massive inefficiencies.

They make huge investments that never pay off, they overpay top executives, and they do incredibly dumb things and then lie about them on conference calls.

The people who think that the Private Sector is more efficient are (in my experience) small businesmen. These guys bust their asses and get stuff done. But they often assume that a big public company is just as efficient as they are...only they bigger.

Ladies and gentlemen, it just ain't so.

Also, public companies are subject to less scrutiny than Government...so their errors and abuses tend to fester for years before blowing up. In Government, there is more transparency...so they tend to catch errors sooner.

That said, Government tends to have more safeguards to prevent politicians from stealing and more regulatuions. This stuff actually makes the whole beast less efficient.

In short, I'd say it's a wash as to what is less efficient, a big company or a government entity. But this is an excellent chance to provide data and numbers to the contrary.

But please don't assume that a large publicy-traded company is running with the same bang-for-buck as your local dry cleaner or consulting firm. It is just not so.

look at Google, they are making a ton of cash but spending like drunken sailors on all kinds of crazy stuff unrelated their business.

http://cosmiclog.msnbc.msn.com/archive/2007/09/13/358739.aspx?p=1

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Molon Labe!

and hire someone that reduces waste, and then the earnings increase. The government just spends and spends. There is no profit motive and success in government is how large your budget is, not how efficient you are with the people's money.

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Molon Labe!

Of a corporation get dismantled its assets shopped and the remaining businesses rationalized. Its the ecology of business recycling a dead carcass that had begun to stink.

Tell when are we going to see the stinky parts of government taken apart ?

"Government of the people, by the people, for the people."
A. Lincoln

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Molon Labe!

but this "debate" is futile unless we at least concur on some basic realities. Just to help you with your research, I would advise looking into how former state run economies such as Russia, China, and even Europe, are moving towards further privatisation and lower taxes. Good day sir.

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Molon Labe!

I am comparing the US Federal, state, and local governments to the US private sector.

Saying that the US government (a democracy) is inefficient because Russia, China, and Eastern Europe (dictatorships, all) were/are inefficient doesn't make sense.

People seem to believe that the US Government is more wasteful than the US Private sector. I don't see much fact-based evidence of this.

perhaps, as many of the young Wall Streeters are wont to be.

example of Public Sector Inefficiency fraud and waste. Just look north to Boston. Ever hear of the Big Dig?

...I can show you an example of Private sector waste. SAP implementations. Golden parachutes. The AOL-Time-Warner merger. The whole dot-com boom. The entire Housing Bubble. Betamax, for those of you old enough to remember.

These are just the incompetents. Let's not forget the Thieves! Enron.

I am not saying the Private Sector is more wasteful. I am just saying that there is *no* evidence that it is more efficient.

Anecdotes. Tales. I-have-a-friend-who-works-in-the-Welfare-Office stories. But no numbers, no facts, no studies.

So...I call "Bullchips!" on anyone who says that the Government wastes more than Corporations. Prove it...or at least give some theory as to why it is so.

This appears to be a fundmental premise of those who claim that Tax Cuts promote efficiency. As such, it should be supported by more than rumours. Like "That Lady" said...always Check Your Premises.

It wasn't obtained at gunpoint from the populace.

What's more anyone who feels a corporation is badly using their money can choose to sell their shares

This is so obvious it shouldn't need to be mentioned. You sure you actually analyze stocks for a living ? I find it difficult you could without the prior statements being axiomatic to your world view.

"When someone in a corporation wastes money, it wasn't obtained at gunpoint from the populace".

That is how to justify lower taxes...because lowering taxes increases personal freedom.

Not because low taxes create "growth"...there is no fact-based evidence that this is so.

Not because low taxes promote "efficiency"...no numbers prove this.

Smaller government is a path to more individual freedom. That's the only case that can be made. Some would say the only case that *need* be made. The stuff about efficiency and GDP growth just doesn't stand up to tough questioning and rigorous analysis.

in its current entirety, I'm going with my original assumption.
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Just a typical, small town, white girl...

Have you seen what levels of domestic gasoline consumption have done in the last couple of years, when gas prices have spiked?

Yep... they've been flat to a slight increase over much of that time, with that trend turning only very slightly downward recently. Gasoline demand is highly inelastic in response to price increases, and, at this point, all a tax increase on it would do is take the money from other things that consumers and businesses would be spending it on.

This isn't geared at reducing consumption... it's a revenue grab, plain and simple. On top of that, a tax of magnitude great enough to cause noticeable reductions in gasoline consumption would not only have ripple effects on almost anything else purchased, but would be highly distortionary, as the magnitude of such a tax would be far greater than the amount of any negative externalities created by the consumption of gasoline (we're talking like at least an additional $2 a gallon tax to get appreciable reductions in gas consumption, sadly).

"No matter how much lipstick you put on the taxation pig, it's still a pig... and it's currently snout-down in your wallet." - Michael Fisk

Even recent price increases have reduced per-capita gas consumption. Here is a link:

http://www.sightline.org/publications/reports/braking-news-gas-consumpti...

This is from a liberal think-tank, but they claim to have got their numbers from the Census and the Department of Highway. They say the the flat to slight increase is due to higher population, and that head-for-head, we have chosen to use less gas.

Also, gas consumption probably takes a long time to adjust to prices. Many fuel-inefficient cars must be replaced...this takes years. Over the long run, people must change where they choose to build homes and busineses...this takes even longer.

But you are right in that money that goes to this tax will go to the Govenment rather than being spent on other things. The Govenment can use this revenue to cut other taxes. They probably won't, but that is a policy option.

Possibly an 11% drop in gas usage in one part of the country when gas prices almost triple in the past decade? That's HIGHLY inelastic.

The classic example of inelastic demand of a good based on price is insulin for diabetics... if it tripled in cost, I think even diabetics would be cutting back at least 11%. That's a staggering, and ringing, endorsement of my exact point, in fact.

"No matter how much lipstick you put on the taxation pig, it's still a pig... and it's currently snout-down in your wallet." - Michael Fisk

...that consumption of gasoline was not etched in stone. When the price rose, consumption dropped. That means that it *is* elastic. If the price goes higher, consumption will continue to drop.

It did not drop much becuase, for a consumer, gas is such a Good Deal even at $4 a gallon.

(Consider if Exxon-Mobil could magically charge you $0.10 for a week's worth of air...this is a 1,000,000,000% increase over what you pay now! Would you stop breathing? No, you would pay them $5.20/year. This is because when a good is already at rock-bottom prices and provides huge value, it takes a *big* jump for elasticity to kick in.)

At the end of the day, we have solid numbers showing that if we raise gas prices, people will use less. I can't think of a better way to reduce gas consumption...or at least make it so that people who use mass transit or walk can quit paying Welfare to car-owners.

In particular, even if something moves in terms of demand relative to price, it doesn't make it price elastic. It's also a function of magnitude relative to the amount of the increase. As an example, gasoline is $3.92 a gallon where I live (Kalamazoo, MI). Let's assume, then, that the price goes up another 5%, to $4.12 a gallon. Unit elastic would mean that, with that jump, we'd see consumption drop 5%. More than that would be considered price elastic, and less than that would be considered price inelastic. Therefore, what we are seeing currently is a very price inelastic part of the demand curve for gasoline at the moment.

Note what I said there, "part of the demand curve". Very rarely is something price elastic or inelastic across the entire demand curve (usually only in cases of perfect elasticity or inelasticity), but rather has sections where demand is inelastic, unit elastic, and, ultimately, elastic. Obviously, this sort of a change relative to the price means we have a long ways to go before we reach the price elastic section of the demand curve for gasoline...

"No matter how much lipstick you put on the taxation pig, it's still a pig... and it's currently snout-down in your wallet." - Michael Fisk

I am not an Economist. All I know is that we raised the price, and people didn't buy as much. Common sense tells us that if we raise the price more, they will buy even less.

It does seem that elasticisity is a matter of degree. If your gas price goes up 5% and consumption falls 1%, that says that it is elastic. Not very elastic, but elastic nonetheless. (Inelastic would mean that the price did not budge at all).

I do take issue with the notion of a "demand curve" and the idea that we are on some part of it and that it's shape is known. Nobody has showed me an equation for the Price/Demand Curve for Unleaded Gas. All we know for sure is that at our *current* point on the curve higher prices are giving us the policy outcome we desire...lower consumption. We should continue until we no longer get the policy outcomes we want.

Unless, of course, you *don't* desire less gasoline consumption. I disagree with that viewpoint, but I respect it and would talk about it in another thread.

and even if it were, it would still invalidate your point. For example, cigarette consumption has dropped for decades, yet the tobacco companies are making more money than ever, and people are spending more money on tobacco than ever.

the reason is simple, there is a core group of smokers that have continued to smoke and have continued to pay the increasing prices per pack. So if you are really interested in economics, what would be served by artificially increasing gas prices and dropping consumption slightly, but still having tons of money spent on gas by the core users, say 93 percent of current users?

Your argument only makes sense if you are a green and simply want less gas consumption. And since you cite "left wing think tanks" that "claim" they get their info from that gov, I have my guess on where you are coming from.

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Molon Labe!

...in another post.

Tobacco company profits are higher because they are selling more cigs overseas and they have better technology that is decreasing their production costs.

But cig volume is down, because taxes have made prices so high that people change their behavior.

Where do you get 93% of gas users as "core" who won't decrease consumption? The real number is more like 52%:

http://www.gallup.com/poll/22303/Half-Americans-Driving-Less-Save-Gas.as...

That number is from 2006...it is probably even now. And this is just the first cut...before people have switched back to smaller cars and before people take Gas Prices into account when they choose where they loctae homes and businesses.

If you raise prices of something, people buy less. This is Econ 101. Why am I having such a hard time over this basic economic fact?

Oh, and the crack about me being a Green is just ad hominem, pure and simple. I used the numbers that Google coughed up. Feel free to cite your own facts and links. Except for the guy who posted the Misery index (thank you), I've not seen many numbers and facts from folks so far.

1) Gasoline is expensive for the country? Last I looked, the country did not buy gasoline, the drivers of the United States do. How is increasing the taxes on gasoline going to make it cheaper? We buy gasoline because it is the best transportation fuel available. To use anything else at this time (even at the current cost) is economic idiocy. In case you hadn't noticed, our economy runs best when energy is cheapest. If gasoline is expensive it is because of 1) an increase in worldwide demand and 2) our government has choked off domestic drilling, refining and investment in other technologies (such as coal to gas) through various environmental restrictions and regulations. Clearly increasing the tax on gasoline isn't going to help either situation. What it will do, however, is choke off economic activity by increasing the cost of everything we buy. If the point is to increase efficiency, the people of the United States are capable of doing that on their own, it just takes some time. As gasoline prices increase, people buy smaller cars and cut out non essential driving all on their own, based on their own economic calculations. I trust the people a heck of a lot more to make these calculations than the congress as demonstrated by the ethanol boondoggle.
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2) The people who own the gasoline don't like us very much, some of them fund terrorists. Nearly all of them hate Israel?
SInce we get most of our oil from Mexico and Canada, this is clearly drivel. Also if you don't want to fund OPEC, instead of increasing our taxes, we should be encouraging domestic energy production, rather than strangling our economy.
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3)We need to use less gasoline? Here is an information free value judgement. While increasing our efficiency is laudable, making statements like this without a viable alternative is just ridiculous. As I stated above, we use gasoline because it is the very best transportation fuel available at this time. We can certainly reduce our useage at the margin, we won't make major reductions in fuel useage, without major economic damage, unless there is an economical alternative. Right now there isn't, and increasing taxes won't provide one.
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4) A tax on gas is a market-focused way of reducing consumption. I cannot think of a better way to do it? As stated by others here, a tax is certainly not a market focused method. The increase in the price of gasoline in respone to changing supply and demand is a market focused method and it is changing our consumption at the margins, but again it takes a while for people to adapt (You don't buy a new car every week. Major expenditures take some planning) We don't need tax increases to force us to adapt. We can do it on our own quite nicely. We've done it before in the past (see late 1970's) and we'll do it again.
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5) Also, there is the notion that "Tax hikes can be hazardous to an economy's health". I have heard anecdotal support for this, but I have not seen any fact-based numbers. It depends on how you define "an economy", mostly? This is the most idiotic statement. Obviously you aren't a student of history or economics. If you want to see hard data, look at the presidency of one James Earl Carter. In the late 1970's we had a problem with the price of gasoline and natural gas. Carter's response? Go on TV in sweaters and demand we conserve. Price controls on oil and natural gas. He also slapped a windfall profits tax on the major oil companies. What was the result? A major decrease in domestic drilling, gasoline shortages, gas lines, double digit inflation, interest rates and unemployment all at the same time. What happened after the people booted Carter out? Reagan did away with the windfall profits tax, cut general tax rates and decontrolled the price of natural gas and oil. How did the economy respond? Major increases in domestic drilling, a large drop in the price of both oil and natural gas and the largets peacs time economic expansion in the history of the United States. Looks like pretty convincing data to me.

1) When we use gas, there Unintended Consequences. The gas causes pollution, the effects of which the Government (through taxes) must pay to mitigate. Taxes must also pay for roads and infrastructure to accomdate the cars. Taxpayers who do not drive much wind up paying Welfare to people who drive a lot.

2a) The oil market is Global. When we buy Mexican oil, that means Europeans must buy Saudi oil. The Free Market causes the money to flow eventually to those with the most production.

2b) Encouraging domestic production is very good idea.

3a) Unless *all* costs of using gasoline are paid by the users of gasoline (instead of by the Taxpayers) the Market will have no incentive to increase efficiency. We will continue to buy inefficient cars and build inefficient suburbs.

3b) We will not get major reductions in consumption overnight. It will have to be gradual and market-paced. It will have to begin "at the margins", as you say.

4) Yes, it will take a while to change out millions of cars. Consumers are reacting to current price increases in Crude and increases in Oil Company Profits. But we must also make sure that their market-decisions reflect the costs of pollution, infrastructure, and military commitments also. That is the rationale for a tax.

5a) I am not certain that tax cuts helped us in the 80s. We may be confusing correlation with causation. GHW Bush raised taxes and the 1990's were a period of rising median income and lower unemployment rates. Does this mean that Tax Hikes increase Income?

5b) When we talk about Economics, we should avoid fuzzy terms like "economic expansion". What exactly, does that mean? Which specific numbers went up, and why are those numbers important to Americans? Stock prices? Wages? Hours Worked? This is where we need to be really clear. the Reagan years saw a huge spike in deficits as well as the highest unemployment rates since the Depression. But there were also high stock prices and solid wage growth. We need to be clear about what we want...so we can make sure that we get it.

Note the miniscule difference between GWB and Clinton. And GWB had to contend with the overhang from the dotcom bust, 9/11 and the corporate crime wave of the 1990's.

Reagan had to undue the damage that Nixon & the Fed started in the early 70's, which continued under Ford and Carter.

...at the table might be to note that after GHWB's tax hike we saw a big drop in the Misery Index. This would tend to undermine the assertion that Tax Hikes hurt the economy.

Also, the Misery Index (Inflation + Interest rates) is highly subjective. Some people like high inflation...for example, people in debt. If you have a mortgage, inflation lets you pay it back in cheaper dollars...especially since inflation is often reflected in wages (one man's price is another man's wage).

Some people like high interest rates...for example, fixed-income investors.

Lastly, since Interest Rates contain expectations of future inflation rates, adding these numbers together is a form of double-counting. Really, the Misery Index is mostly a "Misery for Businesses" Index. Workers and consumers care much more about different statistics.

A look at Real Wages is a better way to measure Misery. This number shows what families can actually buy in the real world with their paychecks.

http://en.wikipedia.org/wiki/Household_income_in_the_United_States#House...

This number seems to be unrelated to any tax policy at all.

Index. I think most people understand the relevance of both indices.

Obama- you walked into
the party like you were
walking onto a yacht!

I was completly un-informed as to what the Misery Index was.

I am a firm believer in using Unemployment as an indicator...I did not know that it was a component.

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"One man with courage makes a majority." - Andrew Jackson

1) SInce the original article was talking about increases in the gas tax, your points are not valid. The existing taxes should cover the "hidden costs" of gasoline consumption. SInce you've admitted that gasoline consumption has decreased as the price has increased, the "hidden costs" should also have decreased. Therefore this is not a rationale for a tax increase.
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2a and 2b Since your comment had to do with who owns the gas we consume, your point about flows af money are not valid. Also, if we hadn't strangled domestic production by bad policy decisions, we'd be consuming less of Canada's and Mexico's production, and since the global supplies would be higher, less money would be flowing to OPEC. To try to offset bad policy with more bad policy (gas tax increases) is foolish.
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3a and 3b Since again we we're talking about the rationale for a gas tax increase as consumption is falling, your points aren't va;lid. All of the costs should have been priced into the original gas tax, and since consumption is falling, the hidden costs should be falling as well. Therefore, no rationale for a tax increase exists. You just don't like other people's economic choices.
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4 Again, we were talking about the rationale for a tax increase not a gas tax. If consumption is falling, there is no rationale to increase the tax.
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5)What specific number increased under Reagan. How about GNP. There was a tremendous increase in GNP. How about employment. Employment numbers increased trmendously after Reagan's tax cuts were all enacted. The unemployment in his early years resulted from the FED wringing out the inflation from the Carter years as well as Congress phasing in the tax cuts. Deficits went up. Goverment tax revenues? They increased substantially after Reagan's tax cuts. The deficits only exploded because Congress increased spending more than the revenues increased. GHW did increase taxes, and we had a recession late in his term. That's how CLinton got elected.

1,3,4) A slight decrease in consumption gives us a slight decrease in pollution. The costs of infrastructure and military commitments remain the same. Taxpayers who use little gas must still bear these costs and transfer their wealth to subsidize people who have chosen high gas-consumption lifestyles.

2) Understanding why it doesn't matter who we buy our oil from requires an understanding of global commodities markets. If we buy a barrel from Mexico, that barrel is unavailable to Germany. The Germans must then buy from the Saudis. If we didn't buy that barrel, Saudi Arabia would be forced to lower their price to compete with the unsold Mexican barrel.

It is just like if someone buys a block of stock. The price of the remaining shares go up. It doesn't matter "whose" stock you bought...all remaing shareholders will become wealthier.

5) GNP is an especially useless number. If you quit smoking, you will no longer spend money on cigarettes and your HMO will not need to spend thousands on expensive medical proceedures. This reduced economic activity will make GNP *fall*.

When the Exxon Valdez crashed, Exxon lost part of the value of their ship and all of the value of the crude oil inside. But hundreds of people were hired for clean-up and teams of lawyers got paid for haggling over damages. GNP went *up* from all this economic activity.

If a man marries his housekeeper, GNP goes *down*...her wages are no longer reported.

Any metric that favors Lung Cancer and Oil Spills...yet is against Marriage is fatally flawed. Don't use it.

As for the more important "Reagan Numbers", like Employment...don't you think that the increased Federal Spending contributed to more employment? After all, if the Government is buying things, somebody must be making them. And if the size of Government increased, well that is employment also. Reagan borrowed the money and spent us out of the 1982 downturn.

Reagan deserves credit for *simplyfying* the tax code...but I don't think the case is solid for saying that his tax cuts increased employment. It was his spending that did the trick.

points.

1) We are addressing the advisability of increasing gas taxes. SInce the roads are already paid for by gas taxes, I don't need to increase gas taxes to maintain roads. I'm not adding more roads. As for the military, we station military forces where we think we need to, not just to protect oil supplies. Our troops are fighting in Afghanistan in response to 911 attacks not protecting oil supplies. We have a sizeable troop presence in Korea. Are they protecting oil supplies? How about the troops stationed in Germany? Did we deploy troops to Haiti or Bosnia under Clinton to protect oil supplies? How about the Vietnam war? Was that for oil?

2) You still haven't addressed my point that the real problem is not who we buy oil from. It's that we have throttled domestic production. Of course we can also cut consumption by causing a recession. Of course that may not be advisable.

5) Your argument regarding GNP is horsepucky. So what if some minor manipulations can distort the statistic at the extreme margim. You asked for statistics. GNP is a useful indicator of gross economic activity (note the word gross- as in agregate). With regard to Reagan spending his way out of the recession; the spending started early in his term (particularly the military spending component - undoing the damage Carter did), but the economic expansion (particularly employment) did not get going until after all of the tax cuts were phased in, particularly the decreases in the top marginal rates. Of course if you were any student of history, you'd look at economic statistics for the Kennedy administration, since he also cut margimnal tax rates to stimulate economic activity. If spending was all that was required, the New Deal would have ended the Great Depression.

1) Your gas taxes pay only a fraction of the cost of highways. An example is from Texas: "...no road pays for itself in gas taxes and fees. For example, in Houston, the 15 miles of SH 99 from I-10 to US 290 will cost $1 billion to build and maintain over its lifetime, while only generating $162 million in gas taxes. That gives a tax gap ratio of .16, which means that the real gas tax rate people would need to pay on this segment of road to completely pay for it would be $2.22 per gallon."

That is from the Texas Department of Transportation (http://www.keeptexasmoving.com/index.php/news/Do_Roads_Pay_for_Themselve...).

The fact that burning gas causes pollution is another cost that people who choose to use gasoline impose on their fellow Americans.

I am not asking that gas be taxed to pay for troops in Korea. But the many of troops in the Persian Gulf are there to protect oil. Some of this cost should be borne by those who choose to use Gasoline.

2) I am in favor of increased domestic production. But we cannot change the laws of Geology any more than we can change the laws of Economics. American oil is expensive and difficult to pump.

5) I am not saying that GNP is flawed on the margins. I am saying the whole number is based on an unsupported assumption: That more people buying and selling more products and services at higher prices is somehow "good". Why do you believe this? You have no idea What was sold, Who bought it, or What they did with it.

If GNP is the only number you have...well then it is better than nothing. But we have better numbers: Employment, Real Wages, Hours Worked, Infant Mortality, Life Expectancy, Home Ownership, or even Ice Cream Eaten Per Capita. Any of these easily-available numbers is a much better indicator of How We're Doing than GNP.

As for history, what we find is that after cutting taxes, "the economy" (choose your favorite numbers) often gets better. Also we find that, after *raising* taxes, the economy often gets better.

I suspect that the economy will, due to Technology driving productivity, almost *always* get better. Claiming that Tax Cuts make it happen is sort of like being a broken clock...you will always be right twice a day.

http://www.redstate.com/blogs/gamecock/2008/may/18/mecklenburg_declarati...

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"One man with courage makes a majority." - Andrew Jackson

Unfair. Unbalanced. Unmedicated. -- IMAO

I think you can guess to whom.

"Government of the people, by the people, for the people."
A. Lincoln

Here is a link: http://www.usatoday.com/news/health/2007-08-09-1Alede_N.htm

A quote from the article:

"Cigarette sales fell 18% in North Carolina last year after the tax was raised in two steps to 35 cents from a nickel...Connecticut has increased its tax to $1.51 from 50 cents per pack in 2002. Since then, per capita consumption of cigarettes has fallen 37%...New Jersey raised its tax to $2.40 from 80 cents in 2002. Smoking has dropped 35%"

You have to understand how the real-world economy works. When gas taxes go up, you will have an incentive to move closer to your job.

Or, you can buy a more fuel-efficient car. They cost more, but at least *you* will be paying that cost rather than the people who get sick from pollution or the servicemen who must protect your oil supply.

It is a law of Economics: You cannot consume more than you produce. Those who create pollution and demand that roads be built must pay for them from their own pocket...not the public trough.

It is only fair.

Haha, that's a good one. Using punitive taxation as a means of curtailing the freedom of Americans to live their lives unfettered by a meddlesome government.

I dig that. Umm hmm.

Unfair. Unbalanced. Unmedicated. -- IMAO

A more fuel efficient car.

I can't move closer to work, since I work in an area that even you wouldn't want to raise kids in. Could change jobs, but anything else is even farther away.

I would love to discuss rapid transit, etc. I'd love to see it. Probably won't happen here.

So statistics show lower smoking rates after tax increases. Thank you.

Smoking is a "luxury", so I'll drop that analogy, which is all it was anyway.

Driving to work, at least for me, is NOT a luxury, it is a necessity, both due to the type of labor and the location of the labor. I can't tele-commute and repair a large format printer. Nor will they be moving the printer out of the industrial area of town over to where I can safely raise my kids.

More taxes are not the answer to our energy problems. Increased domestic production and decreased regulation are.

"Government of the people, by the people, for the people."
A. Lincoln

not smoking. When our glorious state (Maine) raised it's cigarette tax people living close to the New Hampshire border drove the 20-30 minutes to little stores just over the border and bought a couple of sales tax/Maine Excise tax free cartons (you can legally bring 2/person into the state). While they were there they also shopped in the sales tax free stores. Many people would make a day trip to New Hampshire to shop! (0% v 5% general sales tax)

There was a rise in the sale of loose cigarette tobacco and rolling papers because they weren't taxed at the same rate!

There was also an increase in 'back of the trunk' cigarette sales from guys who would take back roads into New Hampshire, buy large quantities and bring them back. This happened in places further from the border. Maybe Maine needs a better Border Patrol!!

Although the revenue did increase it wasn't nearly what the state had projected (surprise!).

Some people did quit smoking but I don't think it's as much as everyone would like to believe!

"Government of the people, by the people, for the people."
A. Lincoln

You're welcome. When I smoked I used to do the same thing. Funny part is that I worked at a convenience store and every other week I'd drive to New Hampshire and buy my cigarettes at a convenience store of the same chain!! The store was about 200 ft. inside New Hampshire, had less than half the square footage of the store I worked in and had humungous cig sales!!! His weekly reorders dwarfed ours and he was in a rural area

Liberals, can't live with 'em, just have to put up with 'em.