FOX Analyst: Additional Stimulus Needed if Gas Taxes Raised
A potential gas tax increase sparked controversy on “Cavuto on Business” Jan. 3 with a few analysts calling an increase “insane,” while the fill-in host Dagen McDowell and two guests defended such a proposal.
Associated Press reported on Jan. 2, that The National Commission on Surface Transportation Infrastructure plans to urge Congress to increase the federal gas tax by 50 percent – 10 cents a gallon on unleaded and 12 cents a gallon on diesel. An editorial and op-ed in The New York Times proposed an even higher increase that would create a gas price floor of $4-a-gallon.
A few of the guests focused on the pain consumers would feel as a result of an increase. Independent trader Todd Wilemon, pointed out that “you would need another stimulus plan to help out the consumer that’s going to lose so much out of the wallet with these increased das—gas taxes.”
Wilemon also noted the futility of raising gasoline taxes to bring in revenue, saying it will cause people to drive less and will therefore “raise even less revenue.” Although later in the program he acknowledged that high gas prices will spur the search for alternative fuels.
Gary Kaltbaum of GaryK.com, exclaimed that the idea is “just totally insane” because consumers are already struggling in this recession. With all the talk of helping the poor and middle class “this goes right after them,” according to Kaltbaum.
Charles Payne of WStreet.com also criticized a gas tax increase, calling the proposal “mind-boggling.”
“What they’re really trying to do is to put gasoline in the same category as cigarettes and alcohol,” Payne said voicing his disgust that consumers would be “punished” for daily activities like going to work and taking their kids to soccer practice.
Adam Lashinsky, a senior writer for Fortune magazine, McDowell and Democratic Strategist Jehmu Greene defended an increase in the tax.
Lashinsky said that raising the tax was “not insane” and emphasized that the tax could be phased in gradually as the economy strengthens or tax breaks could be provided to those the tax would hurt the most. He and Greene advocated the increase as an incentive to discourage dependence on foreign oil.
McDowell specifically mentioned the Congressional commission’s proposal, saying, “This is not just proposed by a bunch of kooks living in trees – this is a federal commission put in place by congress that is proposing at least one gas tax.”
McDowell jumped into the argument later shouting the question: “Are we doomed to repeat the same mistake that we’ve made over and over where we get drunk on low-fuel prices and we buy oil from countries that hate us? … How do we fix it then?”
Greene not only defended a possible gas tax increase, she called it an “opportunity to kill two birds with one stone:” reducing dependency on foreign oil and setting policy that “is going to be better for the environment.
Payne’s rebuttal was that it would actually “kill a real big bird called the American public with this stone as well.”