…but here comes the cruel part: I don’t spend the money on you, or anywhere near you, so no trickle-down either. I give it to Saudi Arabia and Russia instead.
That’s what’s happening right now, according to yesterday’s article by Steven Mufson in the Washington Post. Climbing oil prices have all of the negative effects of a tax increase with none of the benefits. “Clearly contractionary” and “Quite a wallop,” the pundits say, especially as the U.S. economy heads into recession. And this: “stagflationary.”
Makes me wish that we had begun taxing fuel a few years ago – starting out small but increasing over time, giving the economy a chance to adjust. And spent the tax revenue on meeting the demand for mass transit as it increased. Wouldn’t that have made our economy more resilient?