How to Hit Back Against the Anti-Tax Crowd

For a moment, I thought I was about to find myself on the wrong side of the issues with the man I hope to help beat Thelma Drake right out of Congress. As it turned out, I found a reason to like him even more.

The Democratic challenger to Republican Congresswoman Thelma Drake of VA-2 is Glenn Nye. Now, while I am a Democrat, I still have to admit to not knowing much about Mr. Nye, and his testing ground for me was going to be how he would respond to the issue of torture that his opponent failed so miserably at.

As he had a liveblog scheduled for the weekend, I submitted a question and decided to wait until then. But as I waited, I noticed that, over at the VBDems blog, Nye put up a post entitled, “You’re Being Charged Twice for Gas.”

The title, fairly intriguing, though ambiguous as it was (I can relate, I suppose… ahem) initially sent off warning bells.

He was talking about how expensive gas was. Uh-oh. ‘If he buys into that gas tax holiday,’ I tell myself, ‘we have some serious issues.’

He didn’t. He didn’t come close. In fact, he not only didn’t buy into this gas tax holiday malarkey, but he hit the oil companies and the anti-tax crusaders square in the breadbasket.

Before we get there, though, a very quick overview as to my frustrations with the way Republicans play taxes in politics. The short of it is that Republicans sell all tax cuts as though they are the same. A tax cut that affects only corporations is still a tax cut; that you don’t actually see the benefit in your pocketbook is part of the fine print that Republicans are all too happy to keep very, very fine.

That’s where the beauty of Nye’s gambit comes in:

Gas prices have gotten absolutely out of control. As I’ve driven across the 2nd district speaking to voters, I see the escalating prices and how they are affecting our families. I know how we feel the pinch every day.

The worst part is–you’re being charged twice.

One would imagine that while Americans are paying nearly $4 a gallon for gas and the high cost of fuel is hurting our economy in every sector, that the oil companies might at least need the $2.6 BILLION in tax breaks Congress has given them. However, these same oil companies are making record profits—in the first quarter of 2008, Shell alone made a record $7 billion in profit. Its time we took those subsidies and turned them around to provide long-term relief at the pump.

The tax dollars that oil companies aren’t paying have to come from somewhere–and they’re coming from you.

You just don’t frame it better than that. The major subsidies, or tax breaks, that the oil companies are getting from the government are coming out of your paycheck.

Now, I’m going to be perfectly honest; this gambit comes with a double edged sword. I’m no economist, but I can see that this won’t guarantee lower gas prices. It does have at least some promise of giving Americans a major tax break, but I wonder how much that tax break for each individual would be.

And you have to worry about how much gas prices will go up based upon the whims of oil companies that have to start chipping in billions of dollars more taxes than they were.

But here’s the beautiful thing; in either likely outcome, we win.

On one hand, if this doesn’t force gas prices up, but we get a big tax break anyway, that helps, helps a lot more than the stupid proposed gas tax holiday anyway which would do absolutely nothing. On the other hand, if this goes catastrophically wrong, and gas prices skyrocket, that can be a good thing as well.

This is a concept we’ve discussed a bit on this site, but to give the basic overview, it’s like the frog in boiling water concept. You know, the frog gets thrown in boiling water it jumps out, but if you put it in room temperature water and slowly increase the heat, it stays in.

In regards to oil, we are the frog in room temperature water. Gas prices are rising, but they aren’t rising so quickly that they provide a shock to the system. It is this lack of shock which has resulted in a rather sluggish move toward more fuel efficient vehicles, and researching and refining alternative fuels.

Instead, we look at the gas prices that are posted, groan, cancel a family trip that really didn’t need to be taken anyway, and move on with our lives.

By contrast, if gas prices hit 8-10 dollars overnight, you would see things get drastic very quickly. And while this might create a market of, well, not being an economist, I’m going to make up a word, super-demand, that might initially seem like the perfect environment for some hardcore price gouging, but I don’t think that’s going to work as the market would have a very intense pressure to put highly efficient vehicles and alternative fuel source on the market very quickly and very cheaply, or else they will have no consumers to sell to.

In other words, you can put a hybrid on the market for a billion dollars, and you’ll make exactly zero dollars and zero cents if no one can afford it.

But that’s all hypothesizing, and I’ve gotten way off track.

The original point is that Nye hits it square on by calling for a repeal of a tax break, and he does it by showing that it is the average everyday Americans that are hefting the burden of that tax break.

Well played.

Very well played.

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