Katie Baird, an associate professor of economics at the University of Washington Tacoma, suggests raising the gas tax to fund government spending on social services (TNT, 10-9).
A few years ago the housing market collapsed ending our access to capital about the same time oil companies started raising the price of fuel. At the $4 threshold, many had to pick between eating and driving. The consequences from raising the price was decreased sales and plummeting gas tax revenue.
You can’t ignore the logistics chain that brings our consumables to market. If you raise the price of fuel, retailers will pass the additional costs on to their customers.
Will cyclical inflation help fund social services for the poor? With record unemployment and so many living at or below the poverty level, raising taxes and diminishing buying power is a recipe for disaster.
We read about $10,000 dollar desks, $100,000 trips to Europe and $50,000 Mercedes lottery vans. I say better management of the funds available to the government would be a smarter approach. But then again, I’m no professor.