I’m not in the “tax as theft” school. How else can we come together to fund public schools, get our streets fixed and plowed, and finance support for the needy? Sure, some of that could happen without coercion, but I’m not one to campaign for a radical shrinkage of the public sector. Taxes are a necessary evil.

If you are still with me, then the question turns on how to tax and what to tax. Odd as it sounds, I write today in defense of the poor, embattled property tax. In recent forums sponsored by CGR’s New York Matters campaign on Long Island and in Rochester, several participants spoke in favor of shifting from the property tax to the income tax, particularly for the support of public education. The sales tax, too, is clearly preferred by voters to an increase in the hated property tax. Elected officials have certainly gotten this message—counties across the state choose an increase in the sales tax over a property tax hike when money is tight.

Why should we keep the property tax?

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In the 1960s and 1970s, every country wanted an auto industry. In a world obsessed with the automobile, being in the car business was central to national pride. In today’s economy, the chip fab seems to have taken the place of the auto industry. Nations and U.S. states offer dramatic incentives to capture these massive manufacturing facilities. A modern chip fab—those producing 300 mm wafers—cost more than $3 billion to build and incorporates the latest manufacturing technology.

Enticing a chip fab has long been a goal of the Pataki administration. The Luther Forest Technology Park in Saratoga County received substantial state and federal money to support site assembly, permitting and infrastructure. The Luther Forest brochure promises “up to 10,000 good paying jobs for our young people” for the estimated 2 million square feet of manufacturing space. So far, so good.

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Visiting Yosemite National Park last October I encountered a vacationing Brit at the park campground, driving a motor home the size of a city bus. “Must be tough to fuel up with these terrible gas prices, eh?” Looking at me blankly, he replied, “I don’t know what you mean. I could never drive a rig like this in England. Petrol’s a bargain here.” Eager to continue the conversation with my new acquaintance, I blathered on, “But the crude oil price went up worldwide. Your prices must be really awful now.” “Oh, they’ve gone up a bit, I suppose. Haven’t noticed, don’t you know?”

Well, the morning coffee finally kicked in and it all made sense. You see, of the $6.20 per gallon the British were paying last October, $4.05 was tax. Our taxes, on the other hand, average about $.39 per gallon. Remove the tax and gasoline was actually more expensive in the U.S. last October—an average of $2.75 per gallon v. $2.15 per gallon in the U.K. From the beginning of 2004 to October 2005, gas prices had gone up 85% for Americans while the average price paid by the Brits had gone up only 20%.

Yes, you guessed it: I’m going to suggest that we raise the gas tax. Keep reading anyway.
What’s wrong with cheap gas? Let me count the ways:

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