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Raise Gas Tax, But Reduce Payroll Tax

Drivers don't lose, government doesn't gain: Krauthammer

By Gabriel Winant, Newser User

Posted Jan 9, 2009 4:53 PM CST

(Newser) – Raising the tax on gasoline makes sense for all kinds for reasons, writes Charles Krauthammer in the Weekly Standard, but it amounts to political suicide. His solution? Jack up the gas tax by $1 but reduce the payroll tax by $14 a week. Consumers don't lose money, and the government doesn't gain any. "It is simply a transfer agent moving money from one activity (gasoline purchasing) to another (employment) with zero net revenue for the government.”

“The math is simple. The average American buys roughly 14 gallons of gasoline a week. The $1 gas tax takes $14 out of his pocket. The reduction in payroll tax puts it right back,” Krauthammer writes. The government doesn’t remove money from the economy, but it still gets to weaken hostile oil regimes abroad and encourage people to conserve.

[Images (2)]

[Quotes (2)]

Gas prices are advertised at a Chevron station in San Jose, Calif., on Monday, Jan. 5, 2009. (AP Photo/Marcio Jose Sanchez)

In this Dec. 14, 2006, file photo, rush hour traffic from the Washington area travels on Interstate 395 and Seminary Road in Alexandria, Va. (AP Photo)

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High gas prices, whether achieved by market forces or by government imposition, encourage fuel economy. - Charles Krauthammer

These benefits are blindingly obvious. They always have been. But the only time you can possibly think of imposing a tax to achieve them is when oil prices are very low. - Charles Krauthammer

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Raise Gas Tax, But Reduce Payroll Tax