August 11, 2007

GOP Candidates on Gas Tax Hike: No Way

It was an uncomfortable day for anti-taxers, or at least should have been. Two days after the Minnesota bridge collapse gave us our most blatant reminder since Katrina that we're starving our national infrastructure, the leading Republican presidential candidates found themselves forced to answer (or at least to dance around) this question from David Yepsen in a Sunday morning ABC debate:
[I]s it time we raise the federal gas tax to start fixing up our nation’s bridges and roads?
Here's how they answered, in chronological order:
Arkansas Governor Mike Huckabee suggested that we could use money that we're currently spending in Iraq and other foreign hot-spots:
Well, I think the obvious answer is, it’s not necessarily that we raise a tax to fix what we ought to fix of this country. We’re spending billions of dollars all over our country and around the world, but it may be time that we start spending some of those billions of dollars to deal with our own infrastructure.
So his prescription is that we should reallocate money that we're currently spending on international aid to help pay for transportation funding. Does he mean Iraq? Or does he mean those pesky UN dues we keep not paying? Not clear. In the absence of specific recommendations, this amounts to a standard "fraud, waste and abuse" argument: we don't need more taxes, we just need to better spend the money we've already got.

Next was former NYC Mayor Rudy Giuliani, who did Huckabee one better by suggesting that a hiking the gas tax is exactly the wrong way to come up with money for bridge-fixing: in fact, we need to cut taxes to raise this money:
The way to do it sometimes is to reduce taxes and raise more money... I ran a city with 759 bridges; probably the most used bridges in the nation, some of the most used in the world. I was able to acquire more money to fund capital programs. I reduced the number of poor bridges from 5 percent to 1.7 percent. I was able to raise more money to fix those bridges by lowering taxes. I lowered income taxes by 25 percent. I was collecting 40 percent more from the lower income tax than from the higher income tax.
We'll leave for a separate post the question of where Giuliani gets this math. For the moment, let the record show simply that Giuliani's answer to the question of "how do we pay for fixing our transportation system" is that we should cut taxes more.

This would have been a hard act for Mitt Romney to follow under any circumstances, and wasn't made any easier by George Stephanopoulos' phrasing of the question ("Governor Romney, do you want to cut taxes to fix more bridges?"). Romney sorta concurred, agreeing that low taxes are the best way to generate revenue but stopping short of suggesting that additional tax cuts right now would be the way to go. Instead, he retreated to the Huckabee approach: let's reallocate our current spending away from wasteful areas, toward bridges:
There’s no question but that the biggest source of revenue for this country -- if you really want to... repair our infrastructure and build for the future, the biggest source of that is a growing American economy. If the economy is growing slowly, when tax revenues hardly move at all, and, boy, you better raise taxes to get more money for all the things you want to do. But if the economy is growing quickly, then we generate all sorts of new revenue. And the best way to keep the economy rolling is to keep our taxes down. ... Growth helps us provide the revenue that we need. Our bridges -- let me tell you what we did in our state. We found that we had 500 bridges, roughly, that were deemed structurally deficient. And so we changed how we focused our money. Instead of spending it to build new projects -- the bridge to nowhere, new trophies for congressmen -- we instead said, “Fix it first.” We have to reorient how we spend our money.
John McCain was the last candidate who got to answer this one, and he took the "fraud, waste, abuse" tack as well:
We passed a $50 billion transportation bill that had $2 billion in pork barrel earmarked projects: $233 million for a bridge to nowhere in Alaska, to an island with 50 people on it. Not one dime in those pork barrel projects was for inspection or repair of bridges.
The unspoken implication of which is that if we'd just stop spending money on bad projects, we could reallocate the money to good ones.

A frank appraisal of the question "is our federal gas tax too low" is clearly too much to expect of these guys, and to some extent that's understandable. There's plenty of evidence that people are mad about gas prices, and that they're not all that mad about their federal taxes right now. So this is probably the last tax for which you're gonna see office-seekers express support right now. But Giuliani's response is, I would argue, far worse than the rest of them. Arguing that tax cuts should be enacted to pay for bridge construction is something that even President Bush (for whom tax cuts have consistently been the prescription for everyone's daily blues) chose not to pursue. As punishment, he should have to look an audience full of Twin Cities residents in the eye and explain which tax he would cut to pay for their bridge repairs.

The full transcript of Sunday's debate is here. Read it and weep.


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