wrote:
> Read the following article. Makes you wonder why our government didn't
> really tax the hell out of fuel during the 90's and use the proceeds to
> lower other taxes or to fund quality programs.

Man, you sure picked a prickly topic here!

Here is my two cents.

I believe in the school of economics that says the basic problem with
any government, with soft budget constraints, is that it's fundamentally
incapable of the necessary self-regulation and efficiency the free
market can provide. Socializing health care can give you good stories,
but on the whole, it costs everyone more. And as for the gross
shortcomings of the free market, cite Enron, cite WorldCom, fine; I
agree that it's all flawed. But nothing is more flawed than an
enterprise that can never actually go bankrupt. Nothing can borrow from
Peter to pay Paul with more impugnity than a wealthy democratic government.

Futhermore, attempting to place too many artificial controls on the free
markets in the form of excessive taxes, price supports, price ceilings
and other mechanisms such as subsidies does more damage in the long term
than good, and creates more inequity than it ever solves. These things
creates perverse incentives, and dysfunctional reactions that are
counterproductive to the causes in general - and I'm not talking in
terms of years, I'm talking in terms of seconds, once the news breaks.

Gasoline is a very price-inelastic commodity, like tobacco and illicit
drugs. As such, raising its price by 1% will always result in an
increase in revenue and profits that is more than 1%.
All the government is going to do by taxing the hell out of fuel and
energy is to raise more money to fund its inefficiencies, causing more
inefficiencies of bloated bureacracy to oversee the inefficiencies it
caused, hence costing the consumer again a disproportionately large sum
of money for a paternalistic policy, and the original intentions of the
legislation are forever lost and twisted by those who come along and
figure out how to make money off of it.

We most definitely do need an energy policy. It just cannot be solely
based on taxing fuel. It sounds good until you dig deeper.

--
Wound Up
ThunderSnake #65