Following up on ‘hurricane insurance for all,’ John McCain has a new bad idea: suspending gasoline taxes over the summer. There are lots of reasons for which this is a bad move. Gasoline taxes are a partial recognition of the ways in which the price at the pump doesn’t include all the costs associated with driving: from road construction to keeping troops in Saudi Arabia. Also, it is important for people to realize that, in the long run, they will be paying ever more for gasoline. This is the result of three major phenomena: decreasing output from oil fields as they reach maturity, increasing demand from fast-growing states, and the increasing trend towards internalizing externalities associated with fossil fuel use. Creating a temporary dip in prices will obscure the broader message, while encouraging harmful behaviour.
If anything, the US presidential candidates should be sending a strong signal that the era of inexpensive gasoline in the United States is over. People should be bearing that in mind not only when they decide what sort of car to buy, but when nationwide efficiency standards are being set and urban transportation infrastructure decisions are being made.