With voters clamoring for relief from skyrocketing prices at the gas pump, politicians are floating a wide range of quick-fix solutions, many of which could cause more problems than they solve, suggests Paul Rothstein, a specialist in the economics of public spending at Washington University in St. Louis.
“It makes absolutely no sense to suspend the federal gasoline tax, even if you believe that the reduction will be passed along to the consumer,” says Rothstein, an associate professor of economics in Arts & Sciences.
Rothstein supports grassroots efforts to push oil companies to be good corporate citizens and share their gains with people other than their stockholders. But he warns that taxes on windfall profits of large oil companies can have unexpected and quite negative long-term implications; potentially decreasing the amount of oil available to consumers in the future, and eventually leading to even higher prices down the road.
“Bill Gates got the message when Microsoft was threatened with a breakup, and now he spends billions on health care in Africa,” says Rothstein. “Let the oil companies fund schools and health care and basic research and whatever else. But keep the pressure on the individual consumer to buy a fuel-efficient car and drive less.”
Editor’s note: Rothstein is available for phone, e-mail and broadcast interviews. Washington University has VYVX and ISDN lines available for news interviews.