The Heart of U.S. Economic Decline: Our Inability to Raise the Gas Tax
It’s an ugly day for Wall Street as the worldwide markets respond to the unprecedented downgrade of the U.S.’s debt downgrade by Standard & Poor’s. Ever since the S&P announcement Friday night, people have been analyzing, critiquing, and generally freaking out about the downgrade. But as the markets crater, a crucial point to remember is that the S&P rating isn’t necessarily the factor driving all this loss of faith in American fiscal power. The bigger issue is the view, held by many around the world (and a growing number of Americans) that the U.S. political system is entirely dysfunctional and incapable, in its current state, of effectively managing the country’s debt in the future.
This sentiment, of course, comes down to that old faithful: taxes. The U.S. debt problem comes down to 2 options: Either we cut spending to decrease our debt (which we’re doing, but it’s not enough) or we find ways to collect more in tax revenue (note how I didn’t say “raise taxes,” since that phrase instantly sends around 50% of Americans into a frothing, manic frenzy) to bring down our debt.
I’m gonna say it right now, so the anti-tax fanatics can save themselves some time figuring out our stance: We need to collect more taxes in this country. The fact is that we don’t tax nearly everyone we could tax ( right now it’s around 60% of the total potential tax base — and that 40% represents an enormous amount of revenue). We also don’t tax (or don’t tax enough) many of the most basic, vital things that the government provides to the general public. What am I talking about? Well for one, there are the things we write about on this site every day – roads, bridges, and of course, gas.
In our failure to tax these things sufficiently, we don’t raise the federal revenue we need to counteract our national debt. And we’re all to blame. We as citizens don’t take enough personal responsibility for doing our part to pay for the basic services our government provides, and that we use every day. Instead, we shriek and yell about our personal rights and our paychecks and how government spending is all frivolous (oh come on – sure, some of it is, but that’s like saying “my body doesn’t properly use all the oxygen I take in when breathing, so I’m just gonna stop breathing”) and, most of all, we vote for politicians who blindly promise us “No matter WHAT — no matter how much our government and collective economy and reputation in the global markets and basic infrastructure decline – I. Will. Not. Raise. Taxes.” And then we wind up with this.
We need our government. We know this (ok, any rational person knows this). And, more importantly, we need to contribute financially, in the form of paying taxes, in order to keep that government functioning. We simply cannot have highways, bridges, city services, respect in the global markets, fuel, economic stability, and much more, for free. But we refuse to acknowledge this. And a perfect example of this blind refusal is the gas tax.
Sure, you may hate that gas is expensive. But we’ve said it before and we’ll say it again (and again, and again): The money you pay for gas is not going to the federal government. In fact, almost none of it is, and the puny, pathetic amount that is may even disappear in a few months. Raising that portion of your gas bill that actually goes to the federal government could bring in billions of revenue — not enough revenue necessarily to restore the world’s faith in us, pay our bills, and keep China buying our debt, but it’s a start. Yet still, we refuse to pay higher gas taxes — and our politicians refuse to raise the tax (since they are primarily concerned with one thing: getting us to reelect them — which is perhaps the biggest single problem with our democratic system as we know it).
Worst of all, the rest of the world KNOWS we should raise the gas tax (and impose other taxes on basic goods that we currently enjoy for a much lower price than everyone else). And they see our inability to get this one simple tax raised as a clear sign that the American economy is weakening. As NPR reports:
[F]oreign observers worry that the U.S. will squander its advantages – that political polarization will prevent the nation’s leaders from taking the necessary fiscal steps. They worry that the debt-ceiling debate represents only a preview of future arguments about taxes and entitlements.
Leaders in few other countries can point to such immediate and practical steps that might be taken to address the nation’s indebtedness…citing an increase in the gasoline tax as just one example. Yet all such roads are blocked politically in the U.S., he says.
Tea Party Republicans will insist that the revenue side of the ledger is “sancrosanct,” Walter says, and insist that the debt be addressed through entitlement cuts, while “middle of the road Republicans” and Democrats will block such a course.
In other words, global leaders can see crystal clearly that raising the U.S. gas tax would be a crucial (and not even all that big) step toward taking responsibility for our national debt. And yet we sit here, totally unable (or rather, unwilling) to do something concrete about it.
Maybe, rather than focusing on today’s market plunge, we should be focusing on educating constituents, and the politicians they elected, to start doing what needs to be done to restore global confidence in our country — and to collect some money to pay for all the things we’re letting fall apart.
infrastructurist.com |
