One of the recent proposals to fund

infrastructure development in Iowa has been to raise the tax on

gasoline by 10 cents per gallon. Economic activity depends on a

good road system, to convey both people and goods from place to

place and market to market. Regardless of what some ardently

free-market politicians say, government investment in

infrastructure is as capitalist as Adam Smith.

Transportation systems are

increasingly important, both to connect us to international markets

and points of sale throughout the country and even the state of

Iowa. Construction may tax our nerves and cause traffic delays, but

in a state with weather as diverse as ours, it is simply impossible

to build roads that need little upkeep.

Generally speaking, roads are funded

by taxes on gasoline. This means that the people who use roads pay

for their upkeep, which is probably reasonably in keeping with

free-market principles: if you use it, you pay for it.

Gas taxes in Iowa are currently 21

cents per gallon, which puts Iowa at the 33rd-highest national

rate. One estimate suggests that the increase on the 21 cents would

raise $230 million, well over the estimated $215 million in annual

additional funding needed to maintain our roads.

This proposal has met with

opposition from the chairman of the Iowa Tea Party, Ryan Rhodes.

His objective is to sign all 150 state legislators to a pledge

against raising the gas tax. Citing budget waste, Rhodes said that

infrastructure needs could be addressed without raising the gas

tax.

But the most equitable way to fund

something, especially using the capitalist frame of mind popular

among members of the Tea Party, is to make its users or customers

pay for it. And since the state government is charged with building

and maintaining roads, taxes on gas equate to the user fees for it.

Where there is a shortfall, those taxes must be raised the same way

a business needs to raise prices once its profits become

losses.

One of Rhodes’ other concerns was

that Iowans cannot afford the increase in gas taxes. Prices at the

pump, however, have skyrocketed in recent years as demand has also

increased. Even as increasingly fuel-efficient cars have come onto

the market, gas prices and demand for gas have increased. Clearly

Iowans, like people throughout the United States and all over the

world, are paying up for a product they need.

Profits by American oil companies,

however, are outrageous. The Reaganesque supply-side economics

theory propagated by Tea Party members would have us believe that,

just as increases in costs are passed on to consumers, so are

increases in profits. That is clearly not the case. The first

quarter of this year, Exxon Mobil posted a profit of $10.7 billion.

Chevron profited $6.2 billion; and profits for ConocoPhillips were

$3 billion.

In our own experience, we have

rarely cut back on driving because of higher gas prices. They can

go a dime higher.