Prices are Not Taxes
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Am I the only person who gets uppity when politicians describe a free-market economic phenomenon as a "tax"?
Um, no.
Of course, neither the global nor the American petro-economies are, strictly speaking, free markets. Point conceded. Nevertheless, the increasing prices of oil and gasoline are the result of free market forces, namely supply and demand.
Rising prices are not a "tax" anymore than a pay raise is a "welfare check." By definition the government -- and only the government -- can tax. The market -- the economy -- cannot tax anything.
It is true that the government can cause rising prices (e.g., by stifling the development of new oil refinieries) just as government can cause a tax. But somehow I suspect that this was not what our Taxman-in-Chief had in mind and that his intent was not to take credit for higher gas prices. No, Bush's message was that expensive gas isn't his fault because it isn't anybody's fault. It's "like a tax." Just like the Refiner-in-Chief's asinine State of the Union gobbledygook that we are "addicted to oil."
We're not addicted to oil. But the politicians, especially our Addict-in-Chief, are addicted to oil obfuscation. The more that the line between prices and taxes, between market forces and political forces, between the market and the state, become blurred with sloppy terminology, the easier it is to suggest that government intervention in the economy is "no big deal." If the market is "taxing" people, then the government must "anti-tax" them -- through subsidies, penalties, regulations, antitrust, price controls -- whatever the Politics of Pull feels like at the moment.
It seems that oil is a key lubricant for the gears of Leviathan.
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Howling Point reminds us that the Defender-in-Chief also called rising gas prices "a matter of national security." Which I suppose means that he has, under this Administration's "Chief-in-Chief" theory of Article II power, plenary authority over the oil industry. Stay tuned.
Gasoline price increases are like a hidden tax on the working people. They're like a tax on our farmers. They're like a tax on small businesses.So says our Oilman-in-Chief.
Um, no.
Of course, neither the global nor the American petro-economies are, strictly speaking, free markets. Point conceded. Nevertheless, the increasing prices of oil and gasoline are the result of free market forces, namely supply and demand.
Rising prices are not a "tax" anymore than a pay raise is a "welfare check." By definition the government -- and only the government -- can tax. The market -- the economy -- cannot tax anything.
It is true that the government can cause rising prices (e.g., by stifling the development of new oil refinieries) just as government can cause a tax. But somehow I suspect that this was not what our Taxman-in-Chief had in mind and that his intent was not to take credit for higher gas prices. No, Bush's message was that expensive gas isn't his fault because it isn't anybody's fault. It's "like a tax." Just like the Refiner-in-Chief's asinine State of the Union gobbledygook that we are "addicted to oil."
We're not addicted to oil. But the politicians, especially our Addict-in-Chief, are addicted to oil obfuscation. The more that the line between prices and taxes, between market forces and political forces, between the market and the state, become blurred with sloppy terminology, the easier it is to suggest that government intervention in the economy is "no big deal." If the market is "taxing" people, then the government must "anti-tax" them -- through subsidies, penalties, regulations, antitrust, price controls -- whatever the Politics of Pull feels like at the moment.
It seems that oil is a key lubricant for the gears of Leviathan.
---
Howling Point reminds us that the Defender-in-Chief also called rising gas prices "a matter of national security." Which I suppose means that he has, under this Administration's "Chief-in-Chief" theory of Article II power, plenary authority over the oil industry. Stay tuned.
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Posted by Kip on
25 April 2006
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