'Time Has Come' for Tax Increase

August 08, 1985

A hefty tax on imported oil again has surfaced as a "quick fix" for the federal deficit. The idea has been repeatedly discredited over recent years, in part because of the painful lessons OPEC has taught us about the consequences of unnecessary energy cost escalations.

A tax on imported oil would lead to higher energy prices across the board, whether that energy is used for home heating, electricity, plastics, or gasoline, to mention a few affected items.

Study after study shows that an oil import tax will reduce the gross national product, increase domestic unemployment, and tempt American manufacturers of petroleum-dependent products to move factories out of the United States since they would bear a tax burden that foreign manufacturers don't.

Highway users would pay about 40% of an oil import tax on top of the average 20% tax they now pay on every gallon of gasoline. But the tax wouldn't be spread equally among American citizens.

A typical Wyoming family, for example, drives more than a New York family. Who says that the Wyoming family is more responsible for cutting the federal deficit than the New York family?

The federal budget must be brought under control, but it cannot be balanced at your local gas pump.



Clements is president of the Highway Users Federation.

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