Red Diesel is making the news and it’s something I never knew about so I found out, the search took me as long as it takes to type red diesel. It’s an interesting situation and the news surrounding it reflects what I think is pretty much typical political thinking these days.

What is Red Diesel?

Red Diesel is diesel dyed red. They are the same thing except one is dyed red and the other is not. They are not two different products.

Why is Red Diesel not Taxed?

Here’s where things get interesting and I get to talk about one of my favorite topics. Taxes. I’ve written quite a few articles on that topic. Basically, gas taxes, including diesel taxes are intended for a single purpose. To fund road infrastructure. This makes sense and I support taxes used in this fashion. The government hires various agencies to build, repair, and maintain roads and road infrastructure. Vehicles use these roads. All good.

Red Diesel is for vehicles not using roads. Farm equipment, off road vehicles, generators, construction, and things of that nature. Again, makes perfect sense, if the tax is designed for vehicles that use roads, then equipment that does not use the roads should be exempt from the tax. All clear, all good, Libertarian approved.

Why Allow Red Diesel into Road Vehicles?

The stated reason is to lower prices but this makes no sense. Just say all diesel is exempt from taxes. Red diesel is just diesel, the only reason it’s red is because it’s dyed red to distinguish the two. It’s just nonsense. So, now we have to dye a lot more diesel red to say that it’s tax exempt? What moron thought this up? I’ll tell you, a moron who couldn’t do the five second search I performed.

The Long-Term Effect

The long-term effect of making all diesel tax-free is simple. The deficit between the money we spend on roads and the taxes we collect goes up. More taxes from other sources must be used to make up this deficit or our infrastructure will decay at a more rapid rate.

That’s the problem these days. No one thinks anything through. They just jerk their knee and cause bigger problems. Over and over again. Yay.

Tom Liberman