Yahoo’s headline “Trump signals he’s open to mileage tax with praise of Oregon program” suggests that Trump is exploring the idea of having to tax people for driving to work. I don’t think this is a good idea at all. I know people who are going to work one hour away from home because their circumstances don’t allow them to work any closer to home. The moral of having to tax a poor person to try to get to work is so weird and not making any sense in any way at all in my opinion.
In my opinion, the gas tax is already a transportation tax because the more people drive the more tax they have to pay since they have to pump more gas. Adding a mileage tax on to the top of the gas tax is like double taxing an individual. What’s worse the mileage tax will make a poor person pay even more than they could afford for just going to work.
Luckily, the gas prices aren’t so high at the moment and so the gas tax isn’t a problem. I remembered sometimes back in my area people were panic when gas prices jumped near $5 if my memory serves me right. If the gas prices are going to jump back to $4 or $5, how are people going to fare with mileage tax and gas tax at the same time?
In my opinion, I don’t think mileage tax will help spur the economy in any way, and this will make the economy poorer in the long term. I don’t think you have to use any imagination to guess that if people fear of driving far to get anything or to have any fun, how would this spur the economy overall? Malls may stay even emptier and local tourism may feel the strain.
Unreasonable mileage tax will drive the economy poorer. It would make poor people who have to drive far to get to work poorer. It would also put poor people in a position of finding less productive jobs that are closer to their living space, thus it would reduce their spending power in general. Basically, I don’t think it’s a good idea at all!
Lately, I got a bit of a fever in wanting to know more about the United States’ economy, thus I’m still reading a very long book on economics of sort. The book is “The Death of Money: The Coming Collapse of International Monetary System” by James Rickards. This book got advance details on various economic assessments, and so it is a bit dull for me to finish it. Nonetheless, I’m trying to anyway. So far, it seems this book got my attention on couple things, but let me mention one in this blog post.
As reading this book, I noticed that James Rickards mentioned the Fed intended to keep the interest rate very low and print a lot dollars in the hope of creating higher inflation. I think the Fed has had the idea of planting the fear — of seeing prices of products keep going up — into people’s mind. Why? If people are seeing prices are going up for everything, they fear the prices will continue to climb for some period to come. These people’s solution might be all about spending the money they’ve earned now on the products they’re really needing now, because they fear the prices for the products they need will continue to climb to ever higher prices. I surmise the Fed has thought this has been and continues to be a good option for the government to generate sale tax revenues. After all, people will have to pay sale tax for the products that they will buy, right?
As the United States economy isn’t recovering fast enough to the level of high confidence in various industries, and so the United States government is in a very tight spot of wondering how to generate a strong recovery for the United States economy. In this slow recovering period with low growth on job generation, the United States government is also in need of money to pay for the national projects. With tighter budgets for everything, the United States government is supporting the Fed to generate high inflation and low interest rate.
In my opinion the Fed’s design of low interest rate and high inflation can work for a short period of time. Right after the United States’ 2007-08 financial crisis, many people who were not directly hit by the financial crisis were having money still. These people could spend their money in low interest rate and high inflation period to sustain their comfortable lifestyle. Unfortunately, these people were the last supply for the Fed. After seven years of low growth and slow recovery and low growth on job generation, the people who spent their money in low interest rate and high inflation period might just have ran out of money. Going forward, it’s pretty hard to see how low interest rate and high inflation period can help the United States sustains the slow recovery. As of now, we are still talking about an economy that is trying to recover in a slow recovery period! And so the outlook for Fed’s design in hoping to generate growth for the economy and collecting some revenues might not look very bright!
Of course, I’m not expert on economics matters, thus I might be very wrong on what I had detailed. Nonetheless, it’s my opinion that the Fed might have to do something else besides printing money and keep the interest rate low. I guess we would have to wait and see how things will unfold for years to come.