I paid $3.14 for a gallon of gas today in South Carolina. But I live in North Carolina. So why would I drive to South Carolina to get gas? Because a gallon of gas currently costs between $3.45-$3.55 where I live in southern Mecklenburg County (although gasbuddy.com does show one or two stations below the $3.45 mark). Luckily, I only live a few miles from the South Carolina border so it takes me approx. 20 minutes round-trip to fill up, something I’ve done about three times now since the start of 2012. It may be anecdotal evidence, but all three times I’ve filled up at the same South Carolina gas station almost every vehicle had a North Carolina license plate. Obviously, I’m not the only N.C. resident taking my gas money elsewhere these days.
In case you’re unaware (meaning you’re under the age of 16 or your parents still pay your gas bill), gas prices rose dramatically in N.C. on January 1st this year due to an increase in the gas tax. Why would N.C. raise taxes during the midst of a recession you ask? Basically, the GOP controlled state Senate adjourned before reviewing the gas tax cap of 35 cents passed by the GOP controlled House. Why would the GOP controlled House need to pass a gas tax cap of 35 cents? Well, just read this article from WNCT in Greenville and it should all start making sense.
I heard someone recently explain that when they asked Sen. Bob Rucho why the Senate failed to take up this measure before adjourning he basically said that the state couldn’t afford to lose the tax revenue that would result from the lower gas tax rate. This is hearsay of course, but it’s easily believable because it highlights the mindset of those in government that all tax money is their money, not ours. On the other hand, Speaker Tillis did inform me that he expects the gas taxes to lower after the next reevaluation this summer, but he has no way to know what the wholesale price of gas will be in 6 months so that’s merely conjecture on his part. The Senate GOP needs the income stream to continue so they are able to wield power by distributing gas tax money wherever it benefits them the most.
The flaw in this logic is the failure to account for changes in human behavior as a result of higher taxes. People learn to adapt to changing environments, it’s why no one actually paid the top marginal tax rate during the 1920′s when it was 77%, and it’s the same reason why N.C. residents all across the state are driving to South Carolina, Virginia, and Tennessee to save up to 30 cents a gallon on their gas. Ultimately, less people buying gas in N.C. equals less gas taxes being paid into the N.C. treasury which equals less money for the state government to spend.
Gas taxes are easily defensible, even for most libertarians, because money raised from the tax ostensibly goes to building roads and improving infrastructure which is a legitimate function of government. But in reality, gas taxes, like Social Security taxes, are often used for other purposes than those which they are intended… like Global Transparks.
You’ve heard a lot about “corporate greed” the past few years and you’re going to hear a lot more about it if Mitt Romney becomes the GOP nominee for president. It’s funny how you never hear anything about “government greed” though. No matter how much money the government takes from one person by force to give to another, it’s never “greed” that motivates those in power, it’s all done simply for the greater good.
Have you filled up your gas tank in another state since the gas tax increase went into effect? If so, drop us a line in the comments and add to the anecdotal evidence here at CPO.
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