The Looming Disaster of Hawaii’s Gas Cap
Yet another analysis of why the gas caps are a bad idea.
Price controls always result in shortages. This is how it works: If the regulated wholesale price in Hawaii is lower than the market price, the gasoline will go elsewhere. If the U.S. installs price caps, and India and China bid higher for what’s available, those countries get it, leaving the U.S. in the lurch.
And a clear statement of what is really at issue:
The state of Hawaii has the highest state gas tax in America at 60 cents a gallon. If they want to help motorists, why not issue a tax cut instead of price controls? Better yet, why not have a cap on all state taxes? If price controls is a good idea, then why not freeze taxes on property, sales and income? The answer–and the reality–is that governments cannot resist the exercise of power over others; in this case, fixing artificial prices.
Whole article here.