Acton Commentary

Protecting the Poor From the Media’s Gas Tax


Why do so-called progressives seem eager to ignore the real needs of the poor? A recent example was the New York Times editorial calling on President-Elect Obama to institute a random gasoline tax to keep gas prices from dropping below $4 per gallon (in 2008 dollars) to "curb the nation's demand for energy." The proposal is fraught with problems, not least of which would be its impact on those who can least afford it.

In "The Gas Tax," the Times editors say, "it might be time for the president-elect and Congress to think seriously about imposing a gas tax or similar levy to keep gas prices up after the economy recovers from recession."

This lunacy fits a pattern. In a December 7 interview with President-Elect Barrack Obama on NBC's Meet the Press, Tom Brokaw suggested, in light of dropping fuel prices, that government should "take this opportunity to put a tax on gasoline, bump it back up to $4 a gallon where people were prepared to pay for that, and use that revenue for alternative energy and as a signal to the consumers those days are gone."

Why is it that the most prominent media voices seem so ignorant of the economic consequences of their social experiments?

Obama responded, "Well, keep, keep in mind what's happening in -- to families all across America. Yes, gas prices have gone down. But, in the meantime, maybe somebody in the family's lost their job. In the meantime, their housing values have plummeted. In the meantime, maybe their hours have been cut back. Or if they're a small-business owner, their sales have gone down 50, 60, 70 percent. So putting additional burdens on American families right now, I think, is a mistake."

Obama has better economic common sense than journalists on this point. Why needlessly hurt lower-income Americans with a "consumption tax" disproportionately making life worse for rural and inner-city residents, ethnic minorities, single-mothers, and other struggling Americans? While those who enjoy high salaries like Tom Brokaw, the editors of the New York Times, and other like-minded social experimenters may not feel the pinch, "bumping up" gas prices in a recession seems simply immoral.

The editors of the Times might gain some insight by reading their own newspaper. On June 9, 2008, the Times published, "Rural U.S. Takes Worst Hit as Gas Tops $4 Average," reporting the painful reality of rural Americans suffering because of high gas prices.

The article tells the story of Anthony Clark, a farm worker from Tchula, Mississippi who said he prayed "every night for lower gasoline prices. He recently decided not to fix his broken 1992 Chevrolet Astro van because he could not afford the fuel. Now he hires friends and family members to drive him around to buy food and medicine for his diabetic aunt, and his boss sends a van to pick him up for the 10-mile commute to work."

"As gas prices rise, working less could be the economically rational choice," said Tim Slack, a sociologist at Louisiana State University who studies rural poverty. "That would mean lower incomes for the poor and greater distance from the mainstream."

In a June 29, 2008 New York Times editorial, "Fuel for Inequality," Robert Reich, former secretary of labor and professor of public policy at the University of California, Berkeley, explains why high fuel prices increase the wage gap between the haves and have-nots. Rural residents "tend to drive older cars that get lousy mileage. They don't trade them in as often as wealthier people do, and can't afford hybrids or new models that use gas more efficiently. And it's not unusual for their jobs to require them to haul stuff from one place to another in pickup trucks or vans that guzzle even more gas."

The original intent of the December 27 editorial was to propose a way to encourage Americans to purchase the fuel efficient cars U.S. automakers promised as they received bail-out cash from tax payers, but the consequences hurt all Americans in the long run.

A mistaken gas consumption tax will not force Americans to buy automobiles we do not want from Detroit automakers who cannot compete with international companies technologically ahead of them. If the Times wants Detroit to produce more fuel efficient cars, automakers need to be challenged to make affordable vehicles that are better than their competitors from Europe and Asia. That kind of innovation, unlike tax-inflated gas prices, might actually benefit working class Americans, the people progressives are supposed to be looking out for.