Gas Tax Increases

January 4, 2009

The evening news reported on potential increases in Federal and several state gas taxes.  The report did not clearly report the reason for the increases and finished with the the myth that increased taxes will “create new jobs.”  This quality of reporting makes it difficult to watch TV news.  I know it takes a lot of time to make yourself look good for the cameras, but don’t they have any off camera staff that can make a news piece intelligent?

According to this Reuters article, driving declined in 2008 reducing demand for gas and reducing gas tax revenue.    This is important information that may not be well received by the public because it makes the government look like like the “evil oil producers”, not wanting to lose a drop of revenue.  One person quoted on the evening news said the Federal gas tax had not increased from it’s level of 18 cents per gallon since 1993.  It didn’t have to to.  Revenues increased along with demand.  Now that demand has gone down, they still want the revenue. 

Also, it’s not clear what the revenue is needed for.  If driving is down then so would be the need for new roads, perhaps even the need for maintenance.  These are at least good questions to ask.

Finally, this myth of creating new jobs is a crutch of bad reporting.  If the government collects more money in gas tax, that’s less money I can spend elsewhere.  These new jobs displace jobs that would have been supported by spending the money elsewhere.  What’s worse, if new roads and road maintenance isn’t needed because we’re driving less then these jobs may produce less value than the displaced jobs.

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