Corporate & Securities Law

Score One for Obama

I?ve been waiting for my old con law prof to take a political stand I could really get behind, and he finally has. Barack Obama is the only one of the presidential candidates to take a firm stand against this shamefully populist gas tax holiday. Good for you, Prof!

Now, I?m not normally a big tax guy. Taxes generally expand the government?s coffers, enabling the state to do more of the stuff I don?t think it should be doing, and lots of taxes (e.g., capital gains taxes, Sen. Obama) create terrible, wealth-destructive incentives. But not all taxes are created equal. Activities that impose costs that are not borne by the people engaging in the activities ? negative externalities, to use economic jargon ? may be appropriately taxed. Gasoline consumption, which creates all sorts of negative spillovers, is one of those activities.

A friend of mine whom I hadn?t seen for a while came over the other night. I laughed when I realized he’d traded his ridiculous monster truck (he?s a city boy who definitely doesn?t need that much vehicle) for a sensible Honda Civic. ?What?s up with the ride?? I asked. ?Gas prices,? he replied.

What good greenie (as Hillary is trying to portray herself) or economically astute policymaker (as McCain is trying to portray himself) could think this is a bad thing?

Full post as published by Truth on the Market on May 02, 2008 (boomark / email).