Tax Analysts Blog

Gas Tax for the War?

Posted on Dec 1, 2009
The Washington Post has reluctantly signed on to the notion of a special war tax for Afghanistan. (It was apparently a painful decision, given the amount of ink the editors devoted to arguing against its necessity.) But the Post is not enamored of the various proposals for an income tax surcharge to pay for the war. Instead, they suggest a higher gas tax.

Now don't get me wrong: I am fully enthusiastic about raising the federal gas tax. As an environmental measure it makes fine sense. But as a war measure, it makes no sense at all. I am not a fan of using a gas tax -- or any narrow excise tax -- to pay for Afghanistan, Iraq, or any other military conflict.

War taxes, more than most other revenue tools, are deeply symbolic. Sure, they raise money. But even more important, they send a message. War taxes are about shared sacrifice, patriotism, and accountability. As such, they should be broad taxes, paid by everyone. And if history is any guide, they should also be progressive taxes, since progressivity is (and always has been, at least for the last century or so), the principal measure of tax fairness in American politics.

The Post takes a different lesson from history: "Congress could adopt the measure it took in 1940 to help pay for World War II, and again in 1951, when money was needed for the Korean War: an increase in the gasoline tax."

Really, this is a gross distortion of wartime tax policy. Yes, lawmakers did raise the gasoline tax during World War II. But they also raised levies on a huge variety of other consumer items. Should today's lawmakers consider new taxes on malt liquor, coal, and distilled spirits? After all, they were among the most important excise hikes in the Revenue Act of 1942.

Gas taxes were an important element of war finance, but they were hardly the centerpiece. What was? The same tax the Post seeks to avoid today. When mid-century lawmakers cast about for the best way to share the fiscal burden, they turned to the income tax. Because it was efficient. Because it was convenient. Because it promised to raise a lot of money. But also because it was fair.

A war tax should not be simply a favorite revenue tool wrapped up in patriotic marketing. If we go down that road, what's next? A Star Spangled soda tax?

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