Earlier today, I noted a Gallup survey in which a grand total of 3% of Americans believe that their federal government charges too little in taxes. Lindsey Graham has a plan sure to please that 3%, and his Senate Democrat friends are happy to have him along for the ride:
Leading voices in the Senate are considering a new tax on gasoline, as part of an effort to win Republican and oil industry support for the energy and climate bill now idling in Congress.
The tax, which according to early estimates would be in the range of 15 cents a gallon, was conceived with the input of several oil companies, including Shell, BP and Conoco Phillips, and is being championed by Republican Sen. Lindsey Graham of South Carolina.
It is shaping up as a critical but controversial piece in the efforts by Graham, Sen. Joe Lieberman (I-Conn.) and Sen. John Kerry (D-Mass.) to write a climate bill that moderate Republicans could support. Along those lines, the bill will also include an expansion of offshore oil drilling and major new incentives for nuclear power plant construction.
Why did they bother to get Graham involved at all? After all, Democrats have a 59-41 advantage in the Senate and a 70-seat advantage in the House. It turns out that Senate Democrats are a little smarter than Graham about the politics of such a move. They need a Republican front man/fall guy to protect them from Tea Party outrage:
But the tax has encountered stiff behind-the-scenes resistance from some Democrats, who fear the political specter of increasing gasoline prices as the cost of gasoline crests $3 per-gallon this summer. And no other Republicans have publicly announced support for the framework legislation that Graham and the others are circulating on Capitol Hill. Attracting significant Republican support for a bill featuring a tax increase would run counter to historical political trends and to the anti-tax outrage percolating among the Tea Party activists in the GOP base.
Maybe the summer is the wrong time to pitch this idea anyway. Gas prices have gone up considerably over the last few months and now are approaching the $3 per gallon price that created a political firestorm in 2008. Adding taxes to that price level will infuriate consumers and act as an inflationary cudgel to an already stagnant economy.
The LA Times notes that the oil companies have stopped opposing the hike, as long as the increase remains low. That decision came from a rock-hard place choice of either gas taxes or the cap-and-trade bill, sweetened by the drilling possibilities Graham and his cohorts promise. The Obama administration opposes the low tax hike, however, as ineffective as a curb on gasoline use. They want it higher, or they want the cap-and-trade bill passed. Likely, though, we would end up with both rather than one or the other — and a low tax increase now could easily get higher later.
Instead of dumping even higher taxes on Americans, especially an inflationary gas tax (which adds up exponentially along the distribution chain for every product that comes to market), maybe we should be looking for ways to make energy cheaper. That’s what a stagnant economy needs, and the jobs from a full “drill here, drill now” program are badly needed.
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