Thursday, May 1, 2008

Things Which are Seen and Things Which are Unseen: Excise Tax

I will applaud John McCain for getting rid of the tax on gas for the summer. Would it be nicer to get rid of it altogether? You bet, but I'm for any tax cut as long as taxes on others aren't raised to compensate for it.
You bet Hillary Clinton's plan is going to eventually include a compensation to save the highway projects (or whatever they're crying about losing). I have a sick feeling that taxes on tobacco are going to be raised. Think about it. They won't suffer any monetary loss and it might encourage people to quit since they can't afford it anymore.
Let's apply Bastiat's great essay in this hypothetical case. The things that are seen are slightly lower fuel costs and a decrease in smoking. We see jobs being lost and infrastructure collapse.
Certainly collapsing bridges are tragedies. Of course it's incredibly regrettable that so many people are going to be out of work.
What is unseen though? Non-driving smokers are going to "subsidize" drivers. The infrastructure can be saved by cutting elsewhere. With fewer people on the government's payroll, the tax payers may get more money which they can use to buy goods with.
Does that seem uncaring? Sure, but they can surely get new jobs with private contractors. If they were sub-par workers, why should the taxpayers' money go to pay them? Can I not say that it seems like the objector is the uncaring one? With more taxes, wouldn't that mean less money would go to the micro economy?
Of course, the mainstream certainly does not remember Bastiat since they consider the crazed hyperinflationists at the Federal Reserve great economists.
I certainly do not claim to be a good one (I'm just a lowly armchair economist), but if Hillary Clinton actually cuts taxes, I'm sure she'll increase them elsewhere. And of course, Boobus will celebrate because she says she's for the working man even though the unseen things hurt them even more than they claim free markets do.

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