By Kyle Alspach
It’s a proposal that’s had plenty of test drives in the public sphere before, though not necessarily because of someone like General Motors CEO Dan Akerson: Raise the gas tax to cut our country’s oil consumption.
This week Akerson told the Detroit News that the federal government ought to raise the gas tax by up to $1 a gallon. The move would lead to a cut in carbon emissions and air pollution, not to mention helping the U.S. with its foreign-oil dependency problems. It could also stimulate demand for electric-powered cars (not coincidentally, Akerson’s statement comes as one of the early mass market options hits the market — GM’s plug-in hybrid, the Chevy Volt.)
With gas prices already in the $4 range (though currently falling), the statement resurrected a major debate. Interestingly, it’s not a left-wing vs. right-wing debate at all. It’s more like, economists vs. politicians.
In 2007, a study in the Journal of Economic Literature found that the ideal average gas tax for the U.S. would be $2.10 a gallon. At the time, the average tax was 40 cents a gallon — 18.4 cents for federal and 22 cents for state (it’s currently 23.5 cents in Massachusetts).
The $2.10 figure takes into account greenhouse gas emissions, local pollution and oil dependency, along with the costs of congestion and accidents.
To make the tax palatable, economists say the government could cut taxes in other areas — say, the income tax for consumers or corporate taxes for businesses.
The common sense of it is this: Instead of taxing things that are good (business profits or hard-earned income, for instance), why don’t we tax things that are bad (like burning fossil fuel)?
However, according to the Harvard Political Review, the issue quickly moves from the realm of economics to the realm of politics. And “since 1993, no prominent American politician has seriously supported a major increase in the gas tax. Virtually everyone agrees that supporting the gas tax is political suicide.”
And yet:
Economists from across the political spectrum — Freakonomics author Steven Levitt, Nobel laureate and New York Times columnist Paul Krugman, and even the chairman of George W. Bush’s Council of Economic Advisors, N. Gregory Mankiw — have come out in support of raising the gas tax.
Still, Americans love to drive a lot more than they love economic theory, and the psychological barrier is formidable. Working out an equitable tax-swap would be no easy task either.
But I for one would rather be taxed for a luxury (driving) than for a necessity (working.) Especially if I know our environment and security are getting important benefits too.


By James M. Connolly
