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Cutting Taxes or Rethinking Taxes – The NTU vs. the Gas Tax

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The National Taxpayer’s Union is one of my favorite organizations. They’re on the front lines of fighting to keep our taxes low and reduce the size of our bloated government. They do this mostly through raising public awareness and letter writing campaigns and public promotion of tax reductions and opposition to excessive government spending. They target pork spending, support the FairTax, oppose internet taxation and advocate for taxpayers in congress and in the courts. That’s all great stuff.

Philosophically, I’m a libertarian. I believe in people being free in almost every possible way and having an absolute right to control their own property, including controlling their own money without government interference or having the government seize it for their own use. That means I’m also a minarchist, because the best way to have government not take your money is to have a government which performs only truly necessary functions which cannot be done better by private citizens, thereby keeping the size and cost of government to a minimum. I hold to the maxim “that government governs best which governs least.”

There are some legitimate responsibilities of government and there are some taxes which are better than others. Government exists to do the things which individuals cannot effectively do for themselves. That includes functions like providing for the common defense of the nation, a system of law and justice and providing certain services which we all agree don’t work well when privatized, like the construction of highways, bridges and other public infrastructure. When it comes to funding government, taxes which arbitrarily take from the entire population like an income tax are the worst form of taxation, while taxes or fees which target those who make the most use of government services are more desirable. The ideal would be fee-for-service government, where you only had to pay the government for those services which you use, but realistically that type of system is hard to implement. However, whenever possible, the expense of government programs should be paid directly by those who benefit from those programs in proportion to their level of usage.

Sadly, too much of the time, our government prefers to tax citizens first and throw money at problems rather than look for more equitable and more creative solutions which would be less of a burden on the population in general. The NTU’s answer to this is to oppose all increases in taxation. It’s an understandable reaction, but they’re relentlessly unimaginative. Sometimes the righteous fight takes them in the wrong direction.

There’s a proposal under discussion in Congress – obviously driven by the I-35W bridge collapse – to add 5 cents additional tax onto each gallon of gas sold to pay for infrastructure maintenance and improvements. In response, the NTU has just issued a letter with the support of 50 different anti-tax groups, addressed to the President and Congress, strongly arguing against raising the gas tax. They point out that although this is supposed to be a temporary increase to pay for bridge repairs, similar temporary increases in the first Bush and Clinton administrations never actually went away and were eventually ‘repurposed’ away from their original use. They’ve got a good point. Passing new taxes in a panic when you haven’t been responsible with the money you’ve already taken from the taxpayers seems like the height of irresponsibility.

President Bush has come out in opposition to the gas tax increase too, and he hits on the one thing that he and I and the NTU can all agree on. There’s no good reason to keep throwing new money at the highways so long as we’re saddled with the bloated 6-year highway plan passed in 2005 which includes $25 billion in pure pork in the form of almost 6500 earmarks, including the now-legendary ‘bridge to nowhere’ in Alaska. Cutting that pork would easily raise as much additional money for highway maintenance and repair as a 5 cent hike in the federal gas tax, so the idea of cutting the pork instead of raising the tax is very appealing.

In principle I agree. By all means let’s make pork cutting our first priority. But when it comes to a gas tax there’s a larger issue in play and that’s where I have my falling out with the estimable folks at the National Taxpayer’s Union, because all they’re worrying about is cutting taxes. They’re not looking at the larger picture.

What if, rather than just cutting the pork and leaving the huge transportation budget of more than $40 billion a year sucking at the taxpayer wallet, we were to take this idea of raising the gas tax and handle it in a responsible way? Why not improve our highway funding while making taxes more equitable at the same time?

Cutting $25 billion in pork from the six-year budget would free up about $4 billion a year to improve bridge safety, about half of the $8 billion you’d get from the proposed 5 cent increase in the gas tax. What if we went a step further? We could cut the pork, and then instead of adding 5 cents to the gas tax we could add 30 cents. That would raise $45 billion over and above the $4 billion in cut pork savings. That would be enough to pay the entire yearly federal transportation budget with $9 billion additional for urgent infrastructure maintenance like bridge repairs.

More than that, it would shift the burden of transportation infrastructure costs away from the taxpayers in general and onto those who use the roads and bridges the most and consume the most gas. It would be a much more fair way to fund the federal portion of the bill for building and maintaining our basic infrastructure. To make this work the money from the higher gas tax ought to be locked into funding transportation and nothing else. There should be no possibility that it would be ‘repurposed’. Keep it out of the grubby hands of the porkmesiters. The DoT could essentially function independently, with some Congressional review. Make it entirely self-funded by the gas tax, working directly for the people, paid by the people and answerable to the people. That’s the way government ought to be done.

I’m with the NTU on reducing and eliminating taxes and cutting the government down to the bare bones. But the gas tax has the potential to be one of the most legitimate forms of taxation with the money being applied to one of the few genuinely necessary functions of government. While we should oppose the pork, it’s a distraction from the main point. We shouldn’t be against raising the gas tax just because it’s a tax. There’s an opportunity here to completely rethink how we fund government, and we shouldn’t miss it because our vision is just limited to cutting taxes.

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About Dave Nalle

  • Doug Hunter

    Very good article and a solid and logical reasoning. I like gas taxes as well. There’s also a built in incentive for fuel efficiency. Use less gas, pay less taxes. Now could we use this potential gas reshifting of the burden to begin to make a dent in the AMT?

  • http://www.republicofdave.com Dave Nalle

    Well, we ought to just abolish the AMT along with raising the gas tax. They have much the same effect. Beyond that, a hike in the gas tax could do good in a lot of ways people haven’t even considered.

    I wrote on it a while ago here on blogcritics in an article called The Price of Gas – Not High Enough Yet.

    Dave

  • http://tinyurl.com/7lssy Ian

    First, excerpts from . . .

    Where is the outrage over sky-high taxes, regulatory costs?
    by Steve Higgins
    7/15/07 – New Haven (CT) Register (Fair Use excerpts)

    “Reports last week from two nonprofit groups should serve as a wake-up call to Americans to start agitating for tax reform . . .

    “On Monday, the Competitive Enterprise Institute reported that the cost to consumers of complying with federal regulations exceeded $1 trillion in 2006 . . . almost 10 percent of the nation’s gross domestic product. It’s nearly half the amount of government spending.

    “Even more worrisome, the cost of complying with these multitudinous regulations exceeds the amount of individual income tax paid in 2006, about $998 billion, as well as corporate incomes taxes of $277 billion.

    “According to the Washington, DC-based advocacy group [ Americans for Tax Reform ], the average American had to work through July 11 this year just to pay all federal, state and local taxes, as well as regulatory costs including workers’ compensation and unemployment benefits.

    “Congress should take one of two paths: Either cut tax rates and government spending drastically, or adopt the FairTax, an innovative proposal that would involve abolishing the Internal Revenue Service and its income tax and replacing it with a simple national sales tax.”

    Full article here: snipr.com/wherestheoutrage

    . . . The U.S. income tax system and the U.S. economy are inter-related, and are in DIRE trouble. If we, the citizens of these United States, do not act aggressively to spread the FairTax plan with family, friends and associates – our “nest eggs” stand to be devastated through a coming economic meltdown (see Kotlikoff interview, below).

    Politicians are putting demogoguery and pandering above responsible governing – and they’re able to do it because Americans do NOT understand – at the “get go” – politicians’ / bankers’ hunger for ever-increasing shares of the working person’s bi-weekly paycheck; Americans do NOT understand the totality of taxes they pay. The FairTax shines the “light of day” on this, putting citizens back in charge to forcefully demand spending reductons.

    YOU AND I MUST ACT to mobilize public opinion, and get the FairTax enacted, because the signs point to a probable devaluation of the dollar (for reissuance of an “Amero” ? – under a U.S.-sovereignty-busting North American Union?a>download the podcast. ( Prof. Kotlikoff is an expert economist, and advocate, of the FairTax plan).

    Powerful “elites,” members of political and monied-interest “clubs” reaching into the halls of power in Washington, depend on keeping you and me uninformed of their plans. It is up to YOU and ME to ACT – and not live in a state of denial – based on what we now know is clearly happening to our financial futures.

    After you consult the Kotlikoff interview (above):

    • (If you’re a member of your State FairTax organization) Contact your state or local FairTax Director to learn what you can do. Find yours here: snipr.com/localftleaders

    • (If you’re just learning about the FairTax bill) Join FairTax.org here: snipurl.com/scrapthecode

  • http://theugliestamerican.blogspot.com Andy Marsh

    I hear talk all the time of taking a specific tax and making that revenue for one or two things…sort of like taking the lottery and only using that money for schools or the monster suit against the tobacco companies and only using it for smoking education…it never works that way though…

    I mean, would there really be a social security issue if those assholes in DC left the SS money alone?

    I recently read somewhere that gas is underpriced and it was based on the price of bottled water…well, yeah…bottled water is just a bit overpriced…does that really mean that gas is underpriced?

    We have monster road problems down here in Hampton Roads. There are nowhere near enough ways across the bay. The state legislature tried to start up a tax for road improvements during the last election cycle and the voters shot it down, so they turned around and imposed abusive driver fees on certain driving offenses like DUI and reckless driving. The problem there is that those fees can only be assessed against in state drivers and now they’re being shot down in the courts over an equal rights thing…you know, why are you only screwing in state people.

    What’s funny about that is I heard a lot of radio folks and read a lot in the local paper about how the legislature was gonna get their money one way or the other and they did…

    My problem and it’s always the same problem when it comes to stuff like this is why does it always have to be more money out of my pocket? I have a boat, why do I have to pay a gas tax for fixing roads when I put gas in my boat? Or my lawnmower, or weedwacker?

    How much money does the federal govt bring in a year in taxes? And besides the pork, how much of it is not spent wisely? How many $600 hammers are we buying these days? One or two less than in previous years…or one or two more than in previous years?

    I think the proper answer is tolls. Local roads are taken care of with local property taxes, larger roads and interstates can be handled with tolls. Why should someone have to pay to maintain a road they never use? Tolls insure that those that use the road pay for that road. You base the tolls on number of axles or vehicle wieght and that way, you pay for your share of wear and tear on THAT road and not some road on the other side of the state that you’ve never used.

    And what’s your thought on what Corzine wants to do in NJ…turn the roads over to private sector…my thought is, that might work down here in the south or out in AZ…right to work states…but I think a place run by unions like Jersey would be in for a nasty fight.

  • Clavos

    I’m in favor, as many of you know from previous comments on other threads, of the FairTax.

    But, I am getting sick and tired of the unrelenting campaigning on these threads by FairTax supporters, every time there’s an article with the word “tax” in it.

    Clearly, they are using bots to alert them, and they move instantly.

    Before this day is over, at least five more of them will post on this thread.

    Don’t know about y’all, I’m tired of it…

  • Clavos

    Andy,

    I have a boat, why do I have to pay a gas tax for fixing roads when I put gas in my boat?”

    You don’t. Boat fuel is road tax exempt.

    However, if you buy it at an auto gas station, it will be taxed, because the pumps add it automatically.

    FYI, farmers don’t pay road tax for offroad tractors, etc., either.

  • http://theugliestamerican.blogspot.com Andy Marsh

    I buy my gas at the local gas station…on base…it’s taxed…gas at marinas is much much higher than gas at a regular gas station. I believe it’s because gas at marinas has no ethanol in it…

    My boat is trailered. I have to move it about 500 yards from where I store it to the ramp. I pay taxes on my trailer every year. Property taxes. The gas station is in between where I store the boat and the ramp.

    So Clavos, why do I have to pay that tax? Because of where I purchase it? That surely doesn’t seem fair now does it? There’s no way for me to get it back at the end of the year..

  • Clavos

    “There’s no way for me to get it back at the end of the year..”

    Actually, there is. Save your receipts and ask your accountant, or read up on it if you do your own taxes. You’ll have to (among other things) have an affidavit of use and proof of boat ownership.

    I’m NOT a tax expert, so be sure to consult one, but you CAN get most of it back, if you itemize.

    If you don’t itemize, well, then you’ve illustrated one of the reasons I support the FairTax.

  • http://theugliestamerican.blogspot.com Andy Marsh

    I do…and I’m not familiar with the Fairtax of which you speak…but if it’s similar to a flat tax…I’m all for it!

  • http://jonsobel.com/ Jon Sobel

    A big objection to increasing gas taxes is that they are regressive. Unlike, say, cigarette taxes, where a public health benefit could constitute an argument for a regressive tax, a gas tax tends to be unfairly borne by the working class and small businesses.

  • Lumpy

    I itemize and depreciate my car for the miles I drive. That helps. Plus if u run your car on ethanol u can deduct fuel costs.

    But back to the main point. Won’t a big gas tax hit the poor working schlub harder than anyone? Won:t it raise the costs of everything that gets trucked in to our grocery stores, causing huge inflation?

  • Lumpy

    Nice apam in #3 btw, Ian. Is it just me or is the fair tax becoming more cult like every day?

  • Clavos

    Lumpy,

    Took me a few seconds to realize what “apam” was.

    Yes, #3 was spamlike, which is why I posted #5.

  • http://jonsobel.com/ Jon Sobel

    Just giving the FairTax site a once-over, I see an immediate and big problem with it: it relies on the HHS poverty rate, which is not adjusted for cost-of-living variations in different parts of the country.

  • Clavos

    Jon,

    There are a number of “quirks” in the FairTax which need tweaking.

    It really is just at the discussion stage at this point, and its proponents are open to suggestions and discussion.

    I’m not well-versed enough to address the specific issue you raise, but their site asks for input, and they do have discussion groups as well.

  • http://www.republicofdave.com Dave Nalle

    It does nothing to advance the FairTax agenda when their advocates start ranting about the mythical North American Union.

    Dave

  • http://www.republicofdave.com Dave Nalle

    But back to the main point. Won’t a big gas tax hit the poor working schlub harder than anyone?

    Not necessarily, because they are more likely to use public transport and more likely to buy inexpensive cars which are also smaller and hence more gas efficient. No one should complain about being poor and unable to afford gas when you can buy a used and perfectly reliable Geo Metro for $1500 and get 40mpg in it.

    Won:t it raise the costs of everything that gets trucked in to our grocery stores, causing huge inflation?

    Nope, because the trucks that bring things to your grocery store use Diesel which is currnetly untaxed and would remain so. This is a common tactic of the anti-gas-tax shills, to claim that raising the gas tax would raise food prices and cause inflation, but it’s absolutely untrue.

    Dave

  • Nancy

    Doesn’t matter: no matter what tax they impose, they’re gonna use it as a convenient piggybank to hit up whenever they need more cash for their various pork projects…just like Social Security, which as Andy pointed out correctly is supposed to be a legally DEDICATED tax fund – but isn’t.

    Part of the problem is, most of the maggots on the hill are all millionaires, so to them the idea of living on a budget (like most of us have to) is as alien as living on Mars. Maybe we should start electing some regular poor folks for a change…? No one worth over half a million need apply…?

  • http://jonsobel.com/ Jon Sobel

    they are more likely to use public transport and more likely to buy inexpensive cars which are also smaller and hence more gas efficient.

    The poor are “more likely to use public transport” only in urban areas where it is available. As are are the wealthy. I don’t think that argument holds much water.

    a used and perfectly reliable Geo Metro for $1500 and get 40mpg in it

    Looks good on paper, but how does it stack up against a new Prius that only the better-off could afford? We need disincentives to purchase gas-guzzlers like SUVs. A higher gas tax would not function as such for the very well-off. The poor, as you note, wouldn’t be buying an expensive new vehicle anyway.

    In principle, I’m not against raising gas taxes, if something could be done in the short term to reduce the impact on working class people who have to drive to work (and, because they live in suburbs, exurbs, and rural areas, have to drive everywhere else too).

  • Clavos

    “Nope, because the trucks that bring things to your grocery store use Diesel which is currnetly untaxed and would remain so.”

    Dave, do you have a source for that? I believe diesel sold in gas stations IS subject to road tax; that’s why the diesel I buy for my boat is considerably cheaper than gas station diesel, and is in fact dyed red to distinguish it from over-the-road diesel to avoid fraud, particularly by truck drivers.

  • http://theugliestamerican.blogspot.com Andy Marsh

    see…that’s just wrong…boat diesel is cheaper than regular diesel but boat gas costs more than regular!

    What kind of boat Clavos?

  • http://jonsobel.com/ Jon Sobel

    I just looked at the DOE website. Diesel is definitely taxed – in fact, nationwide, at a slightly higher rate than gasoline.

    New York State taxes diesel at 41.2 cents/gallon, and gasoline at 41.7 cents/gallon. (I found that on a retirement website – it might not be up to date.)

  • http://theugliestamerican.blogspot.com Andy Marsh

    You call yourself a libertarian and then write a piece about taxing me more…what kind of libertarian is that?

    You want more tax revenue as a libertarian…legalize pot and tax it! I promise, I’ll do my part to settle the nations debt in the first year!

    Otherwise…please, stay the fuck out of my pockets!

    And stop more assholes from building bridges to nowhere…and stop people from sneaking across our borders and leaching off our government…and then…if you STILL don’t have enough money to fix the bridges and roads…we’ll talk about some other tax…GEEZ!

  • http://theugliestamerican.blogspot.com Andy Marsh

    And one more thing…what part of TX do you live in that has any kind of public transportation system that you believe would be able to get you to and from the places you wanted to go when you wanted to go there? Or is that just for the rest of the people??? I’ve been to a few different cities in TX like Dallas and Houston and their public transportation systems didn’t impress me. Maybe Austin has something special…ain’t never been there…

    The only two areas of this country that have a pubic transportation system worth a damn are NYC and the Bay Area…that’s my experience anyway!

    You might want to blow some other kind of smoke up peoples asses…just like you tried with the diesel tax a few comments ago…

    I really like that let them eat cake attitude of yours Dave!

    A perfectly reliable death trap…maybe we can find them some old Pintos and make sure they come with full gas tanks too!

  • Dr Dreadful

    The only two areas of this country that have a pubic transportation system worth a damn are NYC and the Bay Area…

    Yes, those cities certainly do have very efficient pubic transportation systems. The STD clinics do a thriving business.

    Sorry – simply couldn’t let that one pass!

  • Clavos

    “see…that’s just wrong…boat diesel is cheaper than regular diesel but boat gas costs more than regular!”

    Not really, Andy.

    You were correct when you said the marinas charge more for their gas than the gas stations, even though it’s road tax free (though NOT entirely free of all taxes; just those specifically for roads). That’s because marinas figure you’re a captive customer, so they can charge whatever the traffic will bear; this is true of marinas everywhere.

    Your solution is to find out where farmers buy their off road gas in your area, and see if you can get them to sell it to you.

    My solution is to have my diesel delivered by a truck which also supplies hospitals and other off road diesel users. Currently, in Florida, road taxed diesel is about $3.35, while off road fuel is about $2.65. I buy 350 – 450 gallons at a time, so it makes a big difference.

    The boat is a Albin 43 classic trawler, on which until my wife got sick, we lived for several years.

  • http://jonsobel.com/ Jon Sobel

    Boston also has pretty good public transit. (Except that it stops running too early.)

  • http://theugliestamerican.blogspot.com Andy Marsh

    Jon – that’s the problem with a lot of them! I didn’t really forget about Boston…I’m just a Yankee fan is all! Public transit may be okay up there but Logan sucks the big one! And let’s not even talk about the big dig!

    Clavos – livin the high-life! Sorry about your wife though…but a nice boat for sure.

    I have a much smaller boat, about half the size with a big Johnson…hehehe, had to say that…on the back!

    As far as the tax. Someone told me that I could claim it on my state taxes, but I do my own and there was no mention of it in TurboTax and when I enquired they didn’t have a clue what I was talking about. I’ve only had the boat for a little less than a year, but I use the hell out of it…so far flounder is running about $100 a pound and striper a little less, only because they’re much bigger! Maybe if I could get a gas tax refund I could drop the price down to $87.50!

    It just taste so much better when I pull it out of the bay or the ocean myself…

  • http://www.republicofdave.com Dave Nalle

    I believe diesel sold in gas stations IS subject to road tax

    Sorry, I wrote before I thought. Indeed, highway diesel is subject to a 24.4 cent a gallon federal tax. I was thinking in terms of my own use of biodiesel, which is not taxed – in fact it’s federally subsidized. I know that a lot of truck fleets are converting to biodiesel, but that’s only going to solve the problem where it’s available. Here in Texas I know that Karl’s Corners does some excellent business selling Biowillie gas to truckers.

    My original point holds true, however, if the tax on diesel remains the same while the tax on gas is raised. I’m not sure if the proposed amendment increases tax on both gas and diesel. Rep. Oberstar who proposed it describes it as a tax on gasoline, rather than on fuel in general, so it may indeed only apply to gasoline. As far as I can tell he hasn’t actually introduced the amendment so we don’t know the specific wording.

    Dave

  • http://www.republicofdave.com Dave Nalle

    Looks good on paper, but how does it stack up against a new Prius that only the better-off could afford?

    It’s not quite as efficient, but it does cost 1/20th as much, which makes a huge difference to the purchaser.

    We need disincentives to purchase gas-guzzlers like SUVs. A higher gas tax would not function as such for the very well-off.

    So you want to just ban SUVs? If people are willing to pay the high price for the vehicle and the high price for fuel and can afford it, then let them. The poorer perso who buys a fuel efficient car will benefit regardless of whether the dissincentive works, and it WILL work on an aggregate basis for those more concerned about fuel cost than the convenience of a SUV.

    Dave

  • bliffle

    We’re too involved in the complex tax system we now have to make any radical changes. PLUS, regardless of your sincere desire to get the government out of the entitlements business, we already have an overhang of trilions of dollars obligation for things like SS, for which we have already collected the premiums, in advance, so we have to pay out in the future: anything less would be palpable fraud.

    There are several steps we can take to mend our ways in the future, however. For one thing, STOP passing new “deductions”. These things are the most abused areas of taxes. And they indulge the illusion of not being outright handouts and transfer the balance of powers to those who can hire the best tax attorneys, i.e., big corps and the Very Rich. If we want to subsidize something then people should apply for the subsidy and justify it.

    Enforce the tax laws. Right now about 20% of business taxes go uncollected, according to an IRS report I read a few weeks ago. Presumably the gov is simply outgunned. On the other hand, more than 99% of wageearner taxes are collected. It’s easier to beatup some white collar schlub working at GM than to take on GM itself.

    Stop borrowing out of the SS surplus. this is just a horrible delusion that the money doesn’t have to be repaid. One day we’ll just tell people “sorry, the money’s gone, you’ll just have to starve to death”.

    Stop subsidizing Big Corps for relief purposes, like Katrina disaster relief, housing incentives, etc. Give the money directly to the injured people and to the people we want to incentivize without wasting such a high percentage in middlemen.

  • STM

    DD: “The only two areas of this country that have a pubic transportation system worth a damn are NYC and the Bay Area …”

    Nah, what about Boston and Chicago? Chicago’s is America’s second largest, and is pretty damn good. Reliable, too.

    A mate tells me that Boston’s is now good thanks to the funnelling of much of the traffic through the new tunnel system, as it has freed up a lot of the gridlock that used to bring Boston to a grinding halt and frustrate commuters.

  • http://www.republicofdave.com Dave Nalle

    On the issue of good public transportation systems, let’s not forget DC and San Francisco. Both have great systems. Generally it’s the older, more centralized cities where public transportation works well. Newer cities and ones which have had massive recent growth are just hopeless.

    Dave

  • Dr Dreadful

    Glad to hear Chicago’s public transportation is one of the best (I’d heard it was, but you hear a lot of things). I’m going there in October.

    And Dave, we didn’t forget San Francisco. Andy mentioned the Bay Area back in comment #24. It certainly is a very good system, and needs to be, because you can’t park anywhere unless you’re prepared to remortgage your house.

  • Dr Dreadful

    Also, Dave, the lack of good public transportation can also contribute to decentralization. Fresno, where I live, used to have an excellent and comprehensive streetcar system back in the day. But it failed to expand as the city grew and eventually closed because it didn’t meet needs any more – it simply no longer went where people lived. Now all we have is a bus network which is impractically slow (I drive to and from work in 15 minutes. The same journey by bus takes an hour, and that’s with no transfers) and people just build anywhere you can drive to – and Fresno is flat, so believe me you can drive to a lot of places.

    A local businessman is trying to push the idea of a rapid transit system – possibly a monorail – but people mostly just scoff at the idea. Except for the poor, they’re too attached to their cars.

  • STM

    Monorails are great. Sydney built one in the 80s, and all the lefties/greenies howled about how it was making the city look crook. It’s now heavily used and the best way of doing the inner-city loop over Pyrmont Bridge to Darling Harbour and then back to the CBD through Chinatown (Doc, this is for your benefit as you’d almost certainly know of this, being a pommy tourist).

    Kids love it too, because they can look in office windows and make faces as they go past.

  • Dr Dreadful

    I’ve been to Sydney three times now and somehow have never yet got around to riding the monorail. It ran right past our condo building the last time, too.

    Hopefully when I go to Vegas next month I’ll get to have a go on theirs.

  • STM

    Where did you stay, Doc? You spoke about doing your grocery shopping at Woolworths in the Wynyard station railway concourse, so I thought it had to be somewhere in the CBD.

  • http://www.republicofdave.com Dave Nalle

    We’re too involved in the complex tax system we now have to make any radical changes.

    So, you’re saying that because our current system is so totally fucked up, it would be a mistake to change or replace it? Come again? One would think that the complexity and inequity of the system would be one of the main motivations for making substantive changes.

    PLUS, regardless of your sincere desire to get the government out of the entitlements business, we already have an overhang of trilions of dollars obligation for things like SS, for which we have already collected the premiums, in advance, so we have to pay out in the future: anything less would be palpable fraud.

    So? The fact that we have to pay on SS does not dictate anything about where or how we get the money. And though it’s off topic, changing SS is not a fraud if it’s done on a purely voluntary basis. Letting people choose to opt out of the system and give up their investment ought to be seriously considered.

    There are several steps we can take to mend our ways in the future, however. For one thing, STOP passing new “deductions”.

    Every proposed overhaul of the tax system pretty much does away with deductions, but until we totally change the system they’re a built in part of it, and what difference does it make what they are or how may there are? New ones are no worse than old ones.

    Enforce the tax laws. Right now about 20% of business taxes go uncollected, according to an IRS report I read a few weeks ago.

    This is because the system is so complex, and puts too many demands on everyone involved. Too much paperwork for the business owner, too much time wasted on a zillion petty mistakes and enforcing trivia for the IRS. A simpler system would reduce these problems enormously.

    Stop subsidizing Big Corps for relief purposes, like Katrina disaster relief, housing incentives, etc. Give the money directly to the injured people and to the people we want to incentivize without wasting such a high percentage in middlemen.

    But it’s been proven that payments directly to the victims don’t work. The Katrina victims took their debit cards and used them to go on shopping sprees and buy big screen YVs when they had no homes. Welfare recipients trade their foodstamps for drugs. People who have already demonstrated that they can’t take care of themselves and behave responsibly are NOT going to do any better if you just give them a wad of cash.

    Dave

  • http://theugliestamerican.blogspot.com Andy Marsh

    So Dave – now your just gonna tax the people for the roads. No tax increase on diesel, just gas. So, unless you can afford a Mercedes, or something similar with a diesel engine you pay the increased tax. Now you’re targeting the poor urban sprawl working guy and gal. Still gonna call yourself a Libertarian?

  • Dr Dreadful

    Where did you stay, Doc? You spoke about doing your grocery shopping at Woolworths in the Wynyard station railway concourse, so I thought it had to be somewhere in the CBD.

    The time I was referring to we stayed at the Meriton Rialto apartments on the corner of Pitt and Bathurst Streets, just across from the QVB. They put us on the 40th floor with this view. Between four and six of us had been travelling for three weeks across Fiji and Australia, sharing bures and cramped holiday apartments with one bathroom. By the time we got back to Sydney everyone else had gone home except for me, my wife and our friend, and we reckoned we deserved a bit of comfort. I found the Rialto online and discovered that they were renting for a song. Our mate was ecstatic that she finally had her own bedroom and bathroom (she’s that kind of girl). They really are great apartments and if you ever know someone who’s looking for a good place to stay in town for a moderately prolonged trip, I’d highly recommend it.

    And yes, we were aware that there’s a Woolies right there (and we patronised it), but we also knew the one at Wynyard from our first trip to Oz when we stayed at the Menzies, which is right on top of the station. Sometimes when you’ve been stomping around by the Harbour and need some groceries, Wynyard is handy; then you can just hop on the train to Town Hall.

  • Clavos

    Nice view, Doc.

    (The background’s not bad, either.)

  • Dr Dreadful

    I thought it’d make a change from the beer! ;-)

  • http://www.republicofdave.com Dave Nalle

    So Dave – now your just gonna tax the people for the roads. No tax increase on diesel, just gas.

    It’s an incentive to drive with a fuel which pollutes substantially less, can be produced without using petroleum, and even when produced from petroleum does not consume anywhere near the amount gasoline does. It’s good for the environment and goof for national securit.

    So, unless you can afford a Mercedes, or something similar with a diesel engine you pay the increased tax.

    Diesel Mercedes are good for at least 300,000 miles and you can buy a beautiful 1980s 300SD for $2500. You’ll be driving a nicer, more comfortable car than just about anything in the market today and it will run on biodiesel with no modifications.

    I also don’t think Ethanol should be taxed, and your Geo Metro will run on ethanol or at least on E85.

    Now you’re targeting the poor urban sprawl working guy and gal.

    Hardly. He can run his Geo Metro on E85, pay a lower base price AND pay less tax and get 35mpg (ethanol mileage is slightly lower than straight gas).

    Still gonna call yourself a Libertarian?

    I’ve given up on calling myself anything. You can call me whatever you like.

    Dave

  • http://theugliestamerican.blogspot.com Andy Marsh

    Alright Dave, but…it’s my understanding that ethanol is actually driving up the cost of fuel! Since the govt instituted the requirements for ethanol in gasoline it’s been harder to come by…

    I’ve been driving the same vehicle for 7 years now…wouldn’t want to trade up or down for something with 300,000 miles on it…even if it is a Mercedes! Guess I’m just lucky I only live 8 miles from my office…I even have an electric bicycle that I ride to work occasionallly…but in sprawl areas like here…riding a bicycle can be a very dangerous thing.

    It’s my personal feeling that the govt, state and federal, already get enough of our money to run two countries if they’d only run this one half as badly as they do. So on that note…I’m against ANY tax increase…or fee schedule or whatever other silly name you want to give it.

  • Alec

    Interesting post. I agree that a knee-jerk opposition to a gas tax is unwise. On the other hand, Congress (both Democrats and Republicans) is not only addicted to pork but also addicted to posturing, and love to be able to say that it has not raised taxes even as they refuse to substantively deal with the tax system. As an aside, here in California, the state recently passed a budget which shifts some gas taxes from dedicated projects to the general fund, again because neither party is willing to give up pet projects, so I don’t see the federal government getting braver and stronger with respect to getting rid of pork anytime soon. A few other musings.

    RE: More than that, it would shift the burden of transportation infrastructure costs away from the taxpayers in general and onto those who use the roads and bridges the most and consume the most gas.

    I never understand why libertarians think that this kind of thing is fair or even meaningful. Everyone benefits from roads and bridges. Even a person who is a rich reclusive shut-in who never leaves the house uses the roads when he or she orders groceries and products online. The idea that a necessary tax is some kind of user fee quickly falls apart

    RE: It would be a much more fair way to fund the federal portion of the bill for building and maintaining our basic infrastructure. To make this work the money from the higher gas tax ought to be locked into funding transportation and nothing else. There should be no possibility that it would be ‘repurposed’. Keep it out of the grubby hands of the porkmesiters.

    Just never going to happen for some of the reasons I noted earlier. Also, although libertarians and others often like to pretend that the government is some alien invasion force, the plain fact is that the people are the ultimate porkmeisters. Voters very rarely refuse the pork that their representatives bring home. It’s just too damn tasty. And free (even though it obviously comes from other taxpayers). And that includes the Alaskan bridge to nowhere. It is probably also unconstitutional for the Congress to allocate tons of taxpayer money and to relinquish control and oversight.

    RE: Well, we ought to just abolish the AMT…

    There have been recent news stories about how the Democrats currently in charge refuse to deal with the AMT, with Republicans quietly going along. Because many Americans are increasingly swept into AMT consideration because of inflation, doing nothing allows Congress to get a tax increase, and more revenues for various programs, without ever having to explicitly vote for a tax increase.

    As an aside, cutting the tax rate on dividends and long term capital gains, while keeping the maximum tax on wages and ordinary income at 35% is in many ways a de facto tax on wage earners, and it amazes me that people have not rebelled more against this.

    RE: [But back to the main point. Won’t a big gas tax hit the poor working schlub harder than anyone? ] Not necessarily, because they are more likely to use public transport and more likely to buy inexpensive cars which are also smaller and hence more gas efficient. No one should complain about being poor and unable to afford gas when you can buy a used and perfectly reliable Geo Metro for $1500 and get 40mpg in it.

    Huh? It’s just pointless and presumptuous to think that you can make purchasing decisions for whole groups of people or predict the impact of gas taxes. A working schlub with a family might not find a smaller car to be acceptable, and increasingly fewer people are willing or able to hunt down a car whose last model year was 2001 to save on mileage. Here in Southern California, bus and rail fares increased tremendously in July, with future increases already scheduled, in part due to rising fuel and other operating costs. Public and private transportation costs have risen, affecting both individuals and businesses. A gas tax may be defensible on a number of levels, but you need to back off on judging the reasonableness of anyone’s subsequent complaints.

    RE: . He can run his Geo Metro on E85, pay a lower base price AND pay less tax and get 35mpg (ethanol mileage is slightly lower than straight gas).

    More like 20% to 30%. Some increases in efficiency seen in modern and experimental cars simply would not be available in older cars like the Metro.

  • Lumpy

    Just so you know you can still by Geo Metros new. Suzuki is still making them with the same frame and engine. They chamged the name and body style. It’s not called the Swift anymore, but it’s the same car.

  • bliffle

    “But it’s been proven that payments directly to the victims don’t work.”

    Not at all. The corruptions you point out are peanuts compared to the large scale theft practiced by the local governments and their bosses, the greedy corps that give them their marching orders.

  • bliffle

    “It’s an incentive to drive with a fuel …”

    All tax incentives are bribes which disrupt the free market economy.

    And here I thought that Dave was a Free Market libertarian/conservative.

    What a fraud!

  • http://www.republicofdave.com Dave Nalle

    Alright Dave, but…it’s my understanding that ethanol is actually driving up the cost of fuel! Since the govt instituted the requirements for ethanol in gasoline it’s been harder to come by…

    All I can tell you is that E85 is abput 20 cents less a gallon around here than regular unleaded.

    Dave

  • bliffle

    Tax ‘incentives’ are not free. They are not simply uncollected monies. The lost funds must be made up elsewise. And they give one competitor an advantage over others. To think otherwise is self-delusion.