Andrew Sullivan’s weblog brought my attention to an excellent article published by Greg Mankiw, author of my previous textbook and present Chairman of the Council of Economic Advisors, on how a gasoline tax could solve most if not all of our fiscal policies. He writes,
Many members of Congress have been pushing for a cut in income taxes, but they’ve been unsure how to pay for it. Fortunately, I’ve figured out an answer: with a tax increase. Let’s cut income taxes by 10% and finance it with a 50-cent-per-gallon hike in the gasoline tax.
The debate over tax policy, therefore, needs to go beyond arguments about the level of taxation and consider the mix. Unless we get serious about shrinking the role of government–which neither political party seems willing to do right now–taxes are going to remain high for the foreseeable future. Yet not all taxes are created equal. Some dampen prosperity by adversely changing the incentives people face, while others do the opposite.
If John Kerry wants my vote (and I really want him to want my vote, and want to give him my vote if he proves himself) he should take up Bush’s advisor’s advice and not back down from the Bush campaign’s attacks on his support for the gas-tax. If Kerry had half-an-energy policy team, he’d make this one of the cornerstones of his agenda–and then cite Mankiw to deflect attention back to the President. The only problem I see with this is the potential political fallback…so I’d settle with a non-Kerry Democrat keeping up the issue so that Bush and Kerry could debate it out. Point being: the Democrats need to start taking energy policy seriously, since it is one of the keys to our defense, and they shouldn’t back down so quick.