No. By swapping from percentage-based to flat regressive price-per-gallon, it dis-incents the complex and distributors/large-consumers from being more efficient at producing and hedging the taxed item to reduce its cost. The incentive to work to drop the price has been reduced, thereby setting an effective 'floor' on prices.

Currently under the percentage system, incentive is for businesses to hedge and reduce the cost per gallon quite low because as they do, they simultaneously reduce the tax burden and make their product more appealing to the consumer.

Worse. Since it is GAS, this regressive flat tax is regressive for all consumers and all products, regardless of whether or not they are individually putting one dram of gas into "their own car." You may not even own a car. Yet, you're getting hit with a regressive tax on everything gas is used to ship.

You guys are really not getting this, are you?

Do you really not get the impact of gasoline taxes on the overall economy? After about 100 conversations on this board? Let me spell it out in big letters:

FLAT GASOLINE TAXES ARE A REGRESSIVE FLAT TAX OF THE HIGHEST ORDER WHICH HIT EVERY RESIDENT OF YOUR STATE WHETHER THEY EARN ONE DIME OR NOT. OR EVEN OWN A CAR. THEY ARE MORE PERVASIVE THAN EVEN INCOME TAX OR PRODUCT SALES TAX BECAUSE THE COST SHOWS UP IN *EVERYTHING.*

Has to be a bilateral attempt to troll me and drive me up the wall. Has to be.

Simply keeping the percentage tax with an upper cap would have made 100 times more sense. But no. We're going to have the typical apologists come up with *any* lame-brained way to try to make this look good.

 

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Well in their defense they preface now by saying income taxes and not just no taxes.

 

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You realize you are shooting yourselves right in the nuts using that one in one of my threads. Me being, you know, the guy who argues for much smaller government and targeted, earmarked & tracked taxes that fund related regulation / administration. Right?

 

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This flat fee sets a price floor and creates a stronger incentive to consume less gas. They are simply trading the incentive to find cheaper gas for the incentive to use less gas. Both actions lead to cheaper gas, but only one has environmental benefits.


Both incentives (cheaper gas, less usage) exist regardless of the tax policy so the change in behavior will be minimal.


Hard to believe an MBA program let you out the door thinking a policy that sets a floor on prices will not create incentives that alter behavior. Did you really not know that? Or did you ignore it because it would take much of the ARGLBARGLE out of your post?


Hedging is really limited....creating incentives to hedge your price risk isnt really going to make a bit of difference in the long run (you cant hedge your way around the basic supply/demand curve problem at the gas pump)....and it pales in comparison to the impact of reducing demand just a bit. This may hurt the business of some of the guys sitting at desks helping companies hedge commodity risks...but it should have a positive impact on the gasoline situation in the country, albeit a very limited one.

@red: You just simultaneously confirmed what I said AND tried to pretend I didn't say what I said, all in the same post. Congrats! I shall, therefore, again promptly ignore it.

I return to my still unanswered challenge to Yuki, which now applies to you:





How do you address these *facts*, when the people who instituted this clearly regressive and California-universal tax are Democrats? The party AGAINST regressive taxation?

There's one answer: Hypocrisy, as part of the typical two-party sham.

 

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1. The tax already existed, so it wasn't "instituted."


2. It happened with Republican support, so it wasn't "100% of their own."


3. The change makes the tax more progressive, not less. The change lowers the impact of swings in the price of gas. What hurts lower and middle class people most about gas prices is not the absolute value but the volatility. This change lowers the volatility while keeping the average tax burden the same.


So you are 0/3 on your assertions. Congratulations. You should really just slink away instead of continuing to double down. All you are doing is making a bigger and bigger fool of yourself.

I dont think you understand what you are saying then.


The Democratic party differs from the GOP in one fundamental way. The GOP is a one issue party. The Dems are a multi-issue party. You view the world as a Republican and see everything from the 'tax cuts or wealth redistrition' perspective. So when there are other issues at play, your mind is unable to wrap itself around the whole picture. You see attempts to deal with multiple issues as 'hypocrisy'...but I think most people are able to view this correctly.


The world is not a simple place. I know it would be easier if every single issue at its heart was about the share of wealth going to the rich or the poor...but its not. Sorry that the world is so complicated. Even with this one issue you cant seem to figure out what you are saying. A simpler world would be more fun.


And you keep failing to show how this is a regressive change. I just dont think that many poor people have a large hedging operation that might be impacted by this.

No. Blatant hypocrisy really isn't very complicated. Obvious sham is obvious.

Cali Dems: "Regressive taxes and punishing the working man are bad... unless we do it."

Sucker.

 

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State taxation is actually an interesting topic. It is too bad that AA has ruined his own topic with the healthy helping of stupid he has brought to the thread.


Yuki is right in saying that this move does make the fuel tax less regressive during these times of high gas prices. It is actually a move that a lot of small business advocates are for. Generally speaking both parties have a lot of people that would be for no gas taxes if it wasn’t for the need to build and maintain roads.


There are far more interesting battles that happen at the state level with regards to taxation and the progressivity issue. Property taxes being the obvious one but the sales tax is another significant issue. Republicans who are smart like to talk about how the government can intentionally or unintentionally create economic incentives that are harmful. The property tax is capable of creating very powerful economic incentives for people that has a very large impact on business and education. The only real reason that Republicans and even Democrats don’t change this is the power that towns have and any change would impact a lot of their voters in what they would consider a negative way. This impact will be especially strong in the short term which makes it political suicide.

 

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Thats the funny part.