Another Day, Another Bloomberg Tax Grab

This is getting to be a real habit with Mayor Mike Bloomberg, who seems to be courting the idea of running for Vice President alongside Barack Obama given that he can't run for mayor of New York City again because of term limits. It appears that every substantive pronouncement is a tax and spend policy, particularly when it comes to gas taxes.

His latest pronouncement is his clearest description of what he wants to do - hike gas taxes, although he does approve of the more than sensible idea of drilling for more oil.

"I think he [McCain] and Hillary Clinton couldn't both have been more wrong when they wanted to reduce the gasoline tax during the summer," said the mayor.

Then he added this advice, which is certain to make the average motorist cringe:

"They should be raising the tax and encouraging people to reduce consumption. The anti-tax people don't like that. But using capitalism to encourage the right behavior is exactly the [right] direction of going. Tax policy is the way government uses capitalism."

Taxes are the way government obtains revenue and affects social policy through the tax code. It is an abuse of capitalism since tax policy distorts markets as a means to promote social policy. It's clear that Bloomberg wants to do just that by forcing people to spend more for energy costs. However, it's also clear that Bloomberg hasn't thought it through since those increased energy costs get passed on to the ultimate users when they buy everything from food to airline tickets.

Right now, with gas prices hovering around $4.00 in New Jersey, consumers are already feeling the pinch and are reducing their consumption without the government getting an additional penny. That's bothering the tax and spenders, who have wanted to increase those gas taxes to force social change.

For all the talk in the media about how the economy is in a recession, or is in something like a recession, what would another $.50 hike do to business? It would most certainly push the economy into a recession because we're fast approaching the level of energy prices that people in which they have begun to change their habits. That means spending less on other items - and a modest decrease in driving.

The market forces of supply and demand are a wonderful thing when you let them work unhindered.