Would you like to purchase gasoline in New Jersey for well under one dollar per gallon? If the government were not involved in gasoline production and sales trying to "do something" no matter how well intentioned -- prices of less than one dollar would be readily available. The politicians want to blame Big Oil price gouging, OPEC, refinery problems, or anyone except themselves for high gas prices. Blame can only be placed on government interference with what should be a free market.
Let's start with government price gouging through taxation. There has been much discussion about the so-called Gore Tax, where Al Gore cast the deciding vote to increase the federal gasoline tax to over 18 cents per gallon. The federal gas tax was four cents per gallon in 1980, increased by five cents under Ronald Reagan, another five cents under George Bush, and most recently, the 4.3 cents per gallon Clinton/Gore tax increase.
The gas tax is supposed to be a dedicated tax to build and maintain our nation's highways. Examples of these "highways" include the Denver Airport, the Miami subway system and the Detroit People Mover - all much maligned, multi-billion dollar projects paid for with the gas tax. In addition, according to the Cato Institute, money has been used to fund a $30 million moving sidewalk in Altoona, PA, a pub in San Francisco and bike paths and parking garages.
Some of our state legislators hypocritically introduced a resolution (AR-105) expressing the sentiment that Congress should cut the federal gasoline tax yet took no action to cut our state tax. The NJ gasoline tax is 14.5 cents per gallon, according to the American Petroleum Institute.
The taxes don't stop there. According to a Libertarian Party press release, there are 43 different taxes imposed on the production and distribution of gasoline.
Washington mandates the use of reformulated or oxygenated fuels in areas that violate federal air quality standards, which are most commonly reformulated with MTBE. MTBE has been shown to be a carcinogen, decrease our mileage per gallon, cause adverse health effects on our water supply, increase engine wear, cause drowsiness in drivers, and, according to some experts, actually cause more air pollution. MTBE is on the list of hazardous air pollutants in the Clean Air Act of 1990. The federal government tells us it is hazardous and then mandates we use it.
According to the Ark Institute, MTBE has been found in 65 public drinking water supplies in NJ. The cost according to the Ludwig von Mises Institute is 4 to 10 cents per gallon, with other estimates as high as 25 cents a gallon. Emerson Ellett, the NJ Libertarian Party Senatorial candidate (www.ellett2000.org), is committed to stopping federal mandates like gasoline additives and deserves our support.
Then there are ridiculous government regulations, such as the Unfair Trade Practices Act of 1938 that prohibits station owners from selling gasoline below cost.
Two area gas stations wanted to sell gasoline for less than one dollar as promotions for area radio stations. The state Division of Taxation said they would fine the station owners and suspend their business licenses for up to 30 days if they dared sell gasoline below cost.
Priceline.com has a new program to let you bid on gasoline. They advertise customers can save 10 to 20 cents per gallon - except in NJ and only four other states where it is illegal. Why? Supermarkets, clothing stores and a whole host of other businesses can sell below cost, but not gasoline stations.
Another ridiculous government regulation is the ban on self-service gas stations that are legal in all states but NJ and Oregon. Self-serve is estimated to save five to 15 cents a gallon. Just because some people don't want self-serve doesn't mean the rest of us should be denied the right to pay less for gasoline.
Space does not permit a discussion of other instances of unnecessary and counter productive government interference, such as an irresponsible national energy policy that unnecessarily curtails domestic production, ethanol subsidies, government oil reserves, the Iraqi oil embargo, or the Clinton administration browbeating OPEC oil ministers to cut back on oil production to increase prices so some oil producing countries would be able to pay back their bank loans.
The next time you hear people complaining about gasoline prices being too high, just tell them that government is the problem, not the solution. Every government tax, every government regulation - in fact, all government activity that interferes with a free market causes much more harm than good.
The solution is simple: rather than "do something" the government should undo the current mess. Cut gas taxes, eliminate mandates, repeal ridiculous government regulations and stop interfering in what should be a free market. Allow competition to flourish and we will benefit with superior gasoline with better service at much lower prices.
Lou Elwell, of Long Branch, is a self-employed investment banker and Secretary
of Libertarians of Monmouth County. Comments can be emailed to LibertarianLou@aol.com