The Political Economy of Gasoline Taxes: Lessons from the Oil Embargo
From 1864 to 1972, the real price of oil fell by, on average, over 1% per year. This trend dramatically broke when prices for crude increased by over 650% from 1972 to 1980. Policymakers adopted several policies designed to keep oil prices in check and reduce consumption. Missing from these policies...
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| Format: | Article |
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University of Chicago Press
2019
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| Online Access: | http://hdl.handle.net/1721.1/120703 https://orcid.org/0000-0002-7654-8641 |
| _version_ | 1826201466399883264 |
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| author | Knittel, Christopher Roland |
| author2 | Sloan School of Management |
| author_facet | Sloan School of Management Knittel, Christopher Roland |
| author_sort | Knittel, Christopher Roland |
| collection | MIT |
| description | From 1864 to 1972, the real price of oil fell by, on average, over 1% per year. This trend dramatically broke when prices for crude increased by over 650% from 1972 to 1980. Policymakers adopted several policies designed to keep oil prices in check and reduce consumption. Missing from these policies were taxes on either oil or gasoline, prompting a long economics literature documenting the inefficiencies of these alternative policies. In this chapter, I review the policy discussion related to the transportation sector that occurred during the time through the lens of the printed press. In doing so, I pay particular attention to whether gasoline taxes were “on the table,” as well as how consumers viewed the inefficient set of policies that were ultimately adopted. The discussions at the time suggest that meaningful changes in gasoline taxes were on the table; the public discussion seemed to be much greater than it is today. Some in Congress and many presidential advisors in the Nixon, Ford, and Carter administrations supported and proposed gasoline taxes. The main roadblocks for taxes were Congress and the American people. Polling evidence at the time suggests that consumers preferred price controls and rationing and vehicle taxes over higher gasoline taxes or letting gasoline prices clear the market. Given the saliency of rationing and vehicle taxes, it seems difficult to argue that these alternative policies were adopted because they hide their true costs. |
| first_indexed | 2024-09-23T11:52:15Z |
| format | Article |
| id | mit-1721.1/120703 |
| institution | Massachusetts Institute of Technology |
| last_indexed | 2024-09-23T11:52:15Z |
| publishDate | 2019 |
| publisher | University of Chicago Press |
| record_format | dspace |
| spelling | mit-1721.1/1207032022-10-01T06:35:53Z The Political Economy of Gasoline Taxes: Lessons from the Oil Embargo Knittel, Christopher Roland Sloan School of Management Knittel, Christopher Roland From 1864 to 1972, the real price of oil fell by, on average, over 1% per year. This trend dramatically broke when prices for crude increased by over 650% from 1972 to 1980. Policymakers adopted several policies designed to keep oil prices in check and reduce consumption. Missing from these policies were taxes on either oil or gasoline, prompting a long economics literature documenting the inefficiencies of these alternative policies. In this chapter, I review the policy discussion related to the transportation sector that occurred during the time through the lens of the printed press. In doing so, I pay particular attention to whether gasoline taxes were “on the table,” as well as how consumers viewed the inefficient set of policies that were ultimately adopted. The discussions at the time suggest that meaningful changes in gasoline taxes were on the table; the public discussion seemed to be much greater than it is today. Some in Congress and many presidential advisors in the Nixon, Ford, and Carter administrations supported and proposed gasoline taxes. The main roadblocks for taxes were Congress and the American people. Polling evidence at the time suggests that consumers preferred price controls and rationing and vehicle taxes over higher gasoline taxes or letting gasoline prices clear the market. Given the saliency of rationing and vehicle taxes, it seems difficult to argue that these alternative policies were adopted because they hide their true costs. 2019-03-04T15:04:55Z 2019-03-04T15:04:55Z 2014-01 2019-02-19T16:59:14Z Article http://purl.org/eprint/type/JournalArticle 0892-8649 1537-2650 http://hdl.handle.net/1721.1/120703 Knittel, Christopher R. “The Political Economy of Gasoline Taxes: Lessons from the Oil Embargo.” Tax Policy and the Economy 28, 1 (January 2014): 97–131 © 2014 National Bureau of Economic Research https://orcid.org/0000-0002-7654-8641 http://dx.doi.org/10.1086/675589 Tax Policy and the Economy Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use. application/pdf University of Chicago Press University of Chicago Press |
| spellingShingle | Knittel, Christopher Roland The Political Economy of Gasoline Taxes: Lessons from the Oil Embargo |
| title | The Political Economy of Gasoline Taxes: Lessons from the Oil Embargo |
| title_full | The Political Economy of Gasoline Taxes: Lessons from the Oil Embargo |
| title_fullStr | The Political Economy of Gasoline Taxes: Lessons from the Oil Embargo |
| title_full_unstemmed | The Political Economy of Gasoline Taxes: Lessons from the Oil Embargo |
| title_short | The Political Economy of Gasoline Taxes: Lessons from the Oil Embargo |
| title_sort | political economy of gasoline taxes lessons from the oil embargo |
| url | http://hdl.handle.net/1721.1/120703 https://orcid.org/0000-0002-7654-8641 |
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