The law of unintended consequences

Oftentimes actions taken, even with the best of intentions, lead to unforeseen and undesirable results. This is magnified when the initiator is the government.

Amidst all of the other tomfoolery going on, you might have missed the latest tax quandary faced by our elected officials. For years, we have been warned about the scarcity of fossil fuels (although we have done nothing to add to our own production capacity) and the imminent threat of global warming (as winter drags interminably on). This scare mongering has led to demands for greater and greater fuel efficiency. Coupled with reductions in use brought on by high fuel prices and reduced travel due to the recession, fuel consumption apparently has gone down quite a bit. Good news, right!?

Wrong.

It seems that in their push to drive fuel consumption down, no doubt for the noblest of motivations, the government forgot that highway repairs are funded in large part by a tax on gasoline. For every gallon of gas less that we consume, the Federal government collects proportionately less revenue. That means that as our roads get older and worse, we are now collecting less revenue from fuel taxes. Oops! So some geniuses in Washington (not in the administration to be fair) are now proposing a per mile tax, the more you drive, the more you pay, no matter how fuel efficient your car is.

So how would that work? One proposed solution to track those miles is to mandate a built in tracking device so that the government could download your mileage and charge you accordingly. Set aside for a moment the idea of the government mandating the installation of a monitoring device in your car. You think people are upset about taxes now? Right now most of what we pay is virtually invisible, taken right from our checks, levied as part of the price of gas, built into the purchase price we pay in sales taxes. Try sending people a bill for their taxes and ask for it in one lump sum. I think that would be a great way to go for all taxes, instead of hiding them behind payroll deductions and amidst other expenses, just send people a bill. Make them save up their money all year and send Uncle Sam a check. If they owe less than they expected, they can keep their savings instead of waiting for a refund. Some of those folks with Obama stickers on their expensive cars and Obama signs in front of their very nice houses may think twice is they are forced to save up $10,000 and then write one big check to the IRS in April.

So in a nutshell, our roads are in terrible shape and the gas taxes we are currently paying are not keeping pace. So rather than find ways to reduce costs and increase efficiencies in road repair (and anyone who has lived in Michigan and watched the same roads get repaired over and over, year after year, knows there has to be a better way), our benevolent government is trying to find new and better ways to increase our taxes. Be sure that eventually we are going to see a rise in the taxes for gasoline as the twin headed monster of insatiable government spending and pseudo-ecoawareness demand more and more feeding.

For all of those who are willing to abdicate an enormous portion of our nation’s economy to the people who bring us the DMV, let this be a lesson. The government is often not the most efficient option, it is the least. What does the government do well? Anything? Even our armed forces, a fighting force unequaled by any dozen other nations, is rife with mismanagement and waste.

It is kind of an economic butterfly effect. As the government takes action in one area, it impacts another and the government has to leap in to rescue those afflicted which makes the already crippling complexity of the tax code even worse. For example, the “cap and trade” legislation is going to cause a huge tax increase on lower and middle income consumers who will be most impacted by intentionally increased energy costs. To offset that, the administration is proposing a tax credit to middle and lower income families. So what we have, once again, is a de facto tax increase that will only impact the highest wage earners and cause middle and lower income families to be even more dependent on Uncle Sam. Instead of levying an outright tax, which would be the honest thing to do, and call it income redistribution, again the honest thing to do, we instead have the Obama administration hiding it behind the language of “cap and trade”, “greenhouse gas reduction” and other nonsense.

Beware of well-meaning bureaucrats