As we are now dealing with the current “crisis” of higher gas prices here in our region, I find it highly ironic that state politicians who spout pious platitudes about caring for the people are so enamored of the revenues
generated by the gasoline tax that they cannot bear the thought of giving even a temporary reduction in the tax as some have proposed (most notably, State Senator Vic Sprouse, R-Kanawha).
So today, as defender of economic freedom...as a free marketer...and as a member of the Fourth Estate of Government (i.e., the often loathed press) I call upon our state's highest office holder to demonstrate his commitment to principle and the people by doing the right thing in the midst of this gas price hike: Governor Underwood, tear down this tax!
Yes, my friends, we the people call upon the government of West Virginia not to give us a temporary reduction in the state’s gasoline tax. No, by God, we want a PERMANENT reduction in the tax. And we don’t want this just so the mid-life crisis ridden men of this state can cruise the strip and pick up girls of their summer vacations to Myrtle Beach. No sir, we call on the reduction for all the right reasons.
As any student of microeconomics will tell you the more the government at any level increases the cost of doing business via taxation, the more incentive businesses have to pass on those costs to consumers by raising the price of goods and services so they can keep their profit margins high. Does this mean businesses our wrong? Absolutely not. There is nothing wrong with wanting to make a profit. That is part and parcel of capitalism. What is wrong is that the government, in this case West Virginia, does not understand that taxation upon fuel raises the cost of transportation of goods. Inevitably, these costs are passed on to consumers in stores.
This is bad enough, but when you have higher gas prices as we do now it worsens the problem. Not only do you see costs of goods go up the longer a gas crisis goes on, inevitably you see reduction of tourism revenue because people feel it too costly to travel. The best thing West Virginia could ever do is to reduce this tax and thereby make the cost of transportation cheaper. This will ultimately lead to lower costs at stores and other businesses.
Ah, I hear the scoffer and nail biter lurking in the grass. ‘But Tripp, even if the tax is lowered, won’t merchants just keep the prices as they are and not drop them?’. Nay nay, my cynical friend. You are forgetting the great equalizer of the free market...competition. Let us say some are correct in that some businesses will not lower there prices even if the gas tax were decreased. Then I submit to you they will lose their clientele base. If two stores offer the same product at different prices, which do you choose? The lower one of course. The same will happen here. If a merchant is foolish enough to keep his prices the same in the face of lower costs for doing business, then the fool will soon be eating out less as he realizes he is making less profit.
Others will say that if we lower the tax the cut would be so modest no one would notice and that we would not have enough money for road repair. To both of these ideas I say BALDERDASH! One no will ever be able to convince me that people don't notice when prices are raised or lowered. Most of our good citizens are cost conscious consumers. As good users of resources, they will notice a decrease in the tax as they see the change in price at the pumps.
One also forgets that as the cost of transportation decreases, the more commerce can be engaged. As more commerce is engaged, tax revenues increase. So the argument that says we cannot afford to cut the gasoline tax is thwarted by a time tested economic law of taxation: the lower the rate of taxation, the more tax revenue is generated for a government.
So we the people, with rights on our side, stand before the symbol of economic oppression, the gas pump. We clinch our fists and cry out...GOVERNOR UNDERWOOD, TEAR DOWN THIS TAX!
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