Better Math: A Gas Tax Justification

It’s long been known by anyone who thinks about it that that real cost of gasoline is a lot more than the price paid at the pump ($5-15 a gallon in fact). This leads many to call for a higher gas tax to make things “fair”. Well, higher taxes have never been popular, but a good compromise was proposed by Bush advisor Gregory Mankiw in ‘99. His proposal – slap a 50 cent tax on gas and use it to reduce income tax by 10%. Now that’s an idea with both potential and incentive.