Senator James Inhofe, the nation’s most powerful climate skeptic and the new chairman of the Environment and Public Works Committee, has expressed his openness to a gas tax increase to fund transportation infrastructure improvements. It’s unclear what to make of this.
While there’s certainly a case for Sen. Inhofe’s position (and, likewise, a case against it), there’s a tension in the case for going down that road and Sen. Inhofe’s arguments against a carbon tax. The former produces a gasoline price increase that Sen. Inhofe is apparently comfortable with. The latter produces a similar gasoline price increase. Why are the former price increases economically tolerable but the latter are not?
Sen. Inhofe might argue that revenues from gasoline tax would be dedicated to producing something useful – more and better roads and bridges – while the revenues from a carbon tax would produce nothing useful. But if carbon tax revenues were used to offset cuts in economically destructive capital, labor, or consumption taxes, would they not also produce something useful? And if a carbon tax were accompanied by an elimination of costly command-and-control regulation – such as the EPA’s recently proposed regulations to deal with new and existing power plants – would that not also produce something useful?
Either way, Sen. Inhofe’s openness to a major increase in the gasoline tax suggests that he does not believe that increasing energy prices via a tax will necessarily send the economy into a death spiral … even if he flirts with that argument in other contexts.
Photo Credit: Combined Military Service Digital Photographic Files, 1982 – 2007Record Group 330: Records of the Office of the Secretary of Defense, 1921 – 2008 [Public domain]