Reply #175: Is there an upside to $7.00/gal gas? [View All]

[lumberjack_jeff]

Perhaps. But there is a really obvious downside.

Setting aside the short term (e.g. prior to the election) issues for a moment (which are gimmicky and based on panic), Hillary has suggested to replace the gas tax with a windfall profits tax. As gas gets more expensive, a wpt brings in more, a gas sales tax - less.

Obama has suggested a much larger windfall profits tax on top of the sales tax.

Other things being equal*, fuel prices under the Obama paradigm will be more - regardless of what happens with consumption.

*The most likely thing that throws this into doubt is the possibility that large inflation on fuel prices (which would obviously be exacerbated by unnecessarily high taxes) throws the broader economy into depression.