City Politicians Shouldn't Target Cheap Gas

A blog about business and economics.
Nov. 29 2013 10:53 AM

City Politicians Shouldn't Target Cheap Gas

71090316
Remove the logo and magically you comply with DC law.

Photo by Tim Boyle/Getty Images

District of Columbia law prevents gasoline stations from also selling alcoholic beverages. But when Costco decided it was interested in setting up an operation in DC earlier this year, city officials were eager to have them. So they agreed to a loophole. Costco could get a license to sell liquor and beer and wine, and rather than operating a gas station on the property Costco would divide the lot, with a small portion of it owned by a separate firm that happens to be a wholly owned subsidiary of Coscto. Thus both the gasoline and the booze can flow.

Naturally, DC's other gasoline retailers are upset and now a furious lobbying battle is under way largely between Coscto and a Virginia businessman named Eyob Mamo who's the biggest player in the local industry. Read Mike DeBonis's excellent feature on this for all the details.

Advertisement

In terms of the policy fundamentals, I think the issue here that local officials need to grapple with is whether they want the retail price of gasoline to be lower or not. The alleged rationale for the "no booze at the gas station" rule is to prevent drunk driving, which makes very little sense given the practicalities of urban geography. The real impact is to make both gasoline and alcohol scarcer and more expensive than it would otherwise be. By forcing convenience store operators to choose between selling gas and selling beer, you get less competition in both industries. Reducing alcohol consumption is arguably good public health policy and reducing gasoline consumption is definitely good environmental policy, so the actual pre-Costco outcome wasn't crazy.

But it is a somewhat absurdly inefficient way of achieving either of those goals. The sensible thing to do would be to let everyone have the same deal as Costco where you can sell gas and booze simultaneously, but raise the gasoline tax and possibly the tax on alcohol as well. Then you could use the revenue to cut the regressive regular sales tax or boost the EITC slightly or whatever else.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

TODAY IN SLATE

Frame Game

Hard Knocks

I was hit by a teacher in an East Texas public school. It taught me nothing.

Chief Justice John Roberts Says $1,000 Can’t Buy Influence in Congress. Looks Like He’s Wrong.

After This Merger, One Company Could Control One-Third of the Planet's Beer Sales

Hidden Messages in Corporate Logos

If You’re Outraged by the NFL, Follow This Satirical Blowhard on Twitter

Sports Nut

Giving Up on Goodell

How the NFL lost the trust of its most loyal reporters.

How Can We Investigate Potential Dangers of Fracking Without Being Alarmist?

My Year as an Abortion Doula       

  News & Politics
Weigel
Sept. 15 2014 8:56 PM The Benghazi Whistleblower Who Might Have Revealed a Massive Scandal on his Poetry Blog
  Business
Moneybox
Sept. 15 2014 7:27 PM Could IUDs Be the Next Great Weapon in the Battle Against Poverty?
  Life
Dear Prudence
Sept. 16 2014 6:00 AM Can of Worms Prudie offers advice to a letter writer who wants to blackmail a famous ex with tapes of his fetish.
  Double X
The XX Factor
Sept. 15 2014 3:31 PM My Year As an Abortion Doula
  Slate Plus
Tv Club
Sept. 15 2014 11:38 AM The Slate Doctor Who Podcast: Episode 4  A spoiler-filled discussion of "Listen."
  Arts
Brow Beat
Sept. 15 2014 8:58 PM Lorde Does an Excellent Cover of Kanye West’s “Flashing Lights”
  Technology
Future Tense
Sept. 16 2014 7:36 AM The Inspiration Drought Why our science fiction needs new dreams.
  Health & Science
Bad Astronomy
Sept. 16 2014 7:30 AM A Galaxy of Tatooines
  Sports
Sports Nut
Sept. 15 2014 9:05 PM Giving Up on Goodell How the NFL lost the trust of its most loyal reporters.