Quote:
Originally Posted by Giller
Higher gas taxes have worked just fine here in Canada. It costs us a bit more to fill up our car, but most of that money goes to keeping our bridges and roads in decent repair. Unfortunately, the money has to come from somewhere, so why not at least charge the people that use the roads/bridges through either a better toll system or gas taxes.
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The Canadian consumer's mindset is entirely different to the American. When gas goes near $4 American wallets and pocketbooks stay closed. Since the financial crisis in 2009 we saw it replay time and time again. The economy would start to build some momentum and fuel costs rising would douse a cold bucket right onto the consumer, quickly. Americans have a great sensitivity to pricey fill ups. It affects all the spending that comes after driving off from the gas station. Gas prices were anchored into a very low range for an eternity before the rise of emerging markets created an expectation of greater demand. We got used to low fuel prices and when in a very short time gas jumped 30-40% it sent shivers down all our spines. Stagnant wages for over a decade means we simply don't handle abrupt changes, for the worse, in personal finance well. Taxes on gas works in continents that are used to high taxes, this isn't one them.
You can make a compelling case for greater investment on infrastructure, but opting to raise revenue from a consumer-sore spot is counterproductive. A flat national sales tax, closing corporate tax loopholes, maybe even the Buffett Rule, would all contribute towards that infrastructure without cooling consumer spending. And consumer spending is the make or break in lifting GDP.
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