LIbertarian Saturday

Good Morning!

Air America Place seems to be down for maintenence...so here I am at Northeast Liberals!

We'll take a look today at the price of gasoline....there's a couple of very long articles about the subject over at Lew Rockwell....

Starting first with perhaps the most radical idea of all....Oil is private property and the government really has no right to tax it or regulate its sale. Could you imagine if we went back to the simplest principle of selling...I name a price, and you are free to purchase the object at that price or not, as you see fit, or you can come back and make me a counter-offer, and we negotiate until a mutually agreeable price is reached? How different the price of gas would be!

...Lost in all of this is the simple fact that oil, once it has been extracted from the ground, is private property. Someone risked the capital, time, and labor necessary to extract the oil from the earth, and that someone now holds title to the fruits of his labor. Once a person or company owns a particular good, he is entitled to offer it up at any price he so desires. This does not imply that anyone is forced to buy it from him at this or any price, but it does imply that no one has the right to change the asking price except the owner of the product. If anyone is able to force a change in the price contrary to the wishes of the seller, then the product is no longer private property. It cannot be private property and at the same time be subject to the whims of someone who does not own it.

Let’s say, for example, that you own a house that you bought 20 years ago for $50,000. Your real estate agent could perform all kinds of calculations based on the rate of inflation, changes in the housing market in your neighborhood, interest rates, and so on, and tell you that he thinks you ought to ask for $100,000 if you wish to sell it today. If he is not a co-owner of the house with you, his opinion is just that – an opinion. You are perfectly free to offer your house for sale at an asking price of $100,000, $200,000, or even a mere $3.29. Potential buyers are then free to decide whether or not they wish to pay the price you are asking and, if not, to bargain with you until you arrive at a mutually agreeable price. No one, seeing that you have slapped a price tag of $200,000 on a house that is, from as objective a standpoint as possible, worth $100,000, has the right to force you to sell it for the price that "everyone knows" is the "correct" price. It’s your private property, and you are free to offer it for sale at whatever price you wish, or even to take it off the market in hopes of selling it for your desired price at a later time.

So it goes with oil. Once it’s out of the ground, it’s private property. The owner can offer it for sale at whatever price he chooses, and the buyer can then decide whether to buy it at the asking price, bargain for a lower price, or bide his time in hopes of a lower price in the future....

Another idea that was mentioned is the concept of a gas-tax holiday. We see these come and go for retail sales, usually in the middle of the summer or at other times when the market is flat....heaven forbid that we should have a tax holiday in December when people actually buy things. Of coures, the problem with a gas tax holiday is that it would have to end sometime...and I think a lot of people would be surprised by the amount of taxes we currently pay on gasoline

...It's true that taxes are not passed on to the consumer directly. According to the American Petroleum Institute, gas taxes average 41 cents per gallon of gas (they doubled in the 80s and increased 54% since 1990). Here is a complete map.

That doesn't mean that gas prices are thereby increased by that exact amount (see Brandly on this).

Prices float freely, and, as much as gas stations might like to pass on the costs of taxation to the consumers, they have to price by supply and demand like everyone else. These taxes, like all taxes, ultimately fall on producers of goods, with consumers paying only down the line.

In the same way, a reduction in the tax will not directly cause prices to fall. But by reducing the costs of doing business at the retail level, stations can acquire more gasoline, boosting supply and thereby causing prices to fall. But this result presumes that traders will bid down prices in expectation that the tax holiday will last more than a week or month.

Thus do we see that the distinction between reducing the consumer price and increasing supply is really phony. They are two sides of the same coin. Reducing the tax at the pump will ultimately increase the amount of gas produced and made available on the market. Again, all taxes, even consumption taxes, are ultimately production taxes.

But let's say that the price of gas actually fell in one day by 18 cents (federal level) or a total of 41 cents (if states went along). Can you imagine? Consumers would flip out. It would be a real consciousness-raising moment. "You mean to tell me that every time I fill up my tank of gas, I'm forking over more than $8 to government? Hey, guys, what kind of racket do you have going on here?"

Then there would come a time for the holiday to end. What then? That might really inspire a revolt. Instead of being angry at gas stations, consumers would turn their vengeance on the party that truly deserves the blame. The real gougers would show their face, and they are likely to be pummeled with rotten fruit...

But all is not lost...let's see why aren't you a Libertarian? Checking in on the position paper concerning taxes, there's a couple of things there that might provide some relief.

The Libertarian Party is working every day to cut your taxes. By contrast, professional politicians from the other parties just want more of your money, and are busy increasing the size of government.

In the last few decades, the federal government has exploded in size. No area of your life or business is free from the meddling of politicians -- especially your wallet.

It doesn't have to be that way. With less government and lower taxes, you could keep more of what you earn. It would be easier to start new businesses, build new homes, and fuel stronger economic growth....

...Instead of tending to the basics, government has grown into a bloated conglomerate of political services that gets larger every year -- with no end in sight.

For example, politicians spend millions of dollars to urge people not to smoke -- while spending more millions to subsidize tobacco farmers. They send billions overseas for foreign aid -- while the federal deficit swells. They spend millions to subsidize public art -- while working families struggle to pay their taxes.

Politicians also run trains, bail out savings and loans, construct houses, sell insurance, print books, and build basketball courts -- you name it! But the fact is, every service supplied by the government can be provided better and cheaper by private business.

And don't forget to read the full platform concerning taxation....

So, it's a lovely Saturday here in the Northeast wing. We'll be out and about this afternoon, and you should go outside and enjoy it, too!