Ray's Gas Tax Rant

I would estimate that we need to have gas priced at around $3.50/gallon to create the proper incentives for alternative energies to thrive. But, while I agree with the fundamentals of the argument, I think Ray has oversimplified the solution.

Much like the ?Frictionless Plane? from freshman physics, or the ?Infinite Gaussian Surface? from Electro-magnetics, Ray has fallen victim to a similar simplification ploy commonly used by Political Scientists known as the ?Honest Politician constant?. Because of the failure to include this constant, which I believe today sits somewhere between 0 and 0.00000000001, the solution is fundamentally flawed.

To be certain, even if there were some way to guarantee that revenues from such a tax actually went to infrastructure, I?d be hesitant to give yet more money to the people that bring us tobacco museums in West Virginia and vacation excursions to the Dominican Republic. The Feds already have all the money, and they’ve been doing a great job of printing more. We need to starve the beast.

I agree we need to increase the gas tax to reduce our consumption of gasoline. Lower gasoline prices induces more use, more Hummers, more CO2 in the atmosphere, more smog, toxins etc. However, at the same time, we need to make sure that the added revenues are spent appropriately, as Ray suggests, not in bailing out dying dinosaur companies.

Tom?s proposal addresses the root problem. Our country consumes an embarrassing share of the world?s fossil fuel. Twenty to thirty years ago some advocated a sixty-cent per gallon increase in the gas tax in order to change our consumption and, in fact high gas prices over the last several months caused us to dramatically reduce fuel consumption. However, as soon as large vehicle prices fell and gas prices started to abate some people have traded their more fuel efficient vehicles for larger less efficient vehicles. It is naive to expect consumers and automobile companies to voluntarily change their behavior.
In addition to increasing the gas tax to 50 cents, the federal government should outlaw all state gas taxes and routinely allocate half the tax increase to states based on 1) gas tax remittances from each state, 2) total publically maintained road miles in each state or 3) other equitable formula that is sustainable over time. States use of gas tax revenue should be limited to transportation construction and maintenance and mass transit. Federal use of gas tax revenue should be limited to transportation related purposes including high speed rail, research and new technology which would reduce our use of fossil fuels. In other words the federal government and states should not be allowed to use gas tax revenue for non-transportation purposes.
Further the gas tax should increase by ten cents each year until the gas tax equals $2.00 per gallon but the state?s portion would progressively decline from 50 percent to 25 percent. The federal government would make grant money available to states for construction and repair of interstate highways, mega transportation projects that support economic development and mass transit.
For the next ten years the federal government could use a portion of the new revenue to subsidize automobile companies during a reinvention and restructuring period, progressively reducing the available subsidy each year. Companies who accept subsidies and bailout money would have to repay those funds. The federal government should send a clear message that the subsidy is all the money the automobile companies can expect to receive and they have ten years to fix their businesses but not encumber the subsidies with lots of rules.
Lastly, I acknowledge gas taxes negatively impact those who can least afford taxes and the federal government would need to provide a tax credit to low income people for gas taxes they paid during the year or a standard deduction based on income.
The bold change I have outlined would also send a signal to the rest of the world that our country is ready to do the right thing regarding one of our behaviors which negatively impacts the world politically, environmentally and economically and that we can move beyond self interest. Reducing our consumption could possibly prove to be a win-win situation for our country and the rest of the world.
Further, this is an opportunity to demonstrate for the first time in decades that our elected officials have the courage and conviction to lead the United States to cause significant, long range, positive change.

I think Ray missed one important part. We all make decisions. We all like to make our own decisions and not have government or our boss make them for us. However if we are to make good decisions, they need to be made based on all the facts.

When it comes to cars, we should pay for all the true cost of our cars, including: purchase price, fuel, insurance, maintenance, repairs, roads, bridges … and the effect on others like noise and air pollution. Fifty cents would be a start toward all those goals. Paying additional tax to offset the cost to society for the pollution would be fair. As it is now, those who don’t drive still pay higher food bills, acid rain etc. but they don’t have anything to say about it and can not control it.

A flat tax is regressive and punishes those with less money.

Instead, let’s provide a reasonable ration of gasoline for each individual. Under this plan, rational gas consumption becomes a 100% tax-funded commodity. Each individual is awarded a reasonable number of gas credits and no more. If you need more gas than that (for your Hummer for example), you can buy on the spot market, which the government can tax the crap out of if they want because REASONABLE Americans who actually want to participate in a SUSTAINABLE energy policy will be shielded from the direct effects.

Under this plan, individuals can buy and sell their credits, which expire at the end of each year. Under this plan, Americans who use less gasoline will benefit MORE, because they can sell their credits for just marginally less than the official taxed-the-crap-out-of rate the government is selling fuel for.

People who never drive at all will likely make money under the plan, even if they are taxed at 100% of the cost of the credits.

If anyone is worried about the risk of deflation, we can set up an FDIC of sorts to cover the value of the credits.

Great idea! I’m all for it. Money drives most decisions. What kind of car to buy. Where to live. Where to work. Vacations vs. Staycations. Look at Europe. They don’t have suburban sprawl. They live near work. Gas is 4 EU a liter. The best defense for the US against Islamic extremism us to pump fewer dollars into middle eastern countries.
Ray! Start a petition. Be Obamaramic! Get an e-mail list so huge any politician would fear and decide to follow the wish of the people.

Nonsense. “those with less money” should be taking public transport or living within walking distance of their work. A tax would drive this point home to “those”.

Ray’s gas tax is spot on!
Rebuilding this countrys public transportation system would:

  1. put people to work
  2. reduce our need for oil.
  3. save thousands of lives.
  4. save natural resources, and improve quality of life.
    I would point out that the car companys created this mess in the 1920’s and 30’s when General Motors, Standard Oil, Firestone Tire, Mack Truck and Phillip petroleum conspired to buy up and destroy all light rail systems in the nation.
    Any one that has used the high speed rail between London and Paris knows the technology is currently available.
    Auto accidents kill about fifty thousand people a year in the US, cripple and injure many more.
    I love cars, but there are alternatives that are faster, safer, cheaper, and easier on the environment.

I can support a 50 cents per gallon gas tax if there are:

  1. Rebate for the families in the bottom 1/2 of the tax bracket.
  2. Clear, measurable and attainable goals.
  3. Strict guidelines on how the money can be spent.
  4. Quarterly progress reports by the President (i.e. how much energy we still import).
  5. Finally, a sunset clause.

Doc Marco, FYI, Hummers Are Not The Problem And Taxes Are Not The Solution.

Ray is a genius. I heard Ray’s rant this afternoon while walking back from the gym. It is a brilliant idea - raises revenue, improves the environment, improves the rail system, improves the economy through assisting the auto makers and is relatively painless.

And in response to the below guy who has to rant about government mis-spending - there’s an easy solution which is called legislation - the gas tax bill needs to have conditions attached to it which would give the taxpayer standing to sue the government if they fail to enforce those conditions. Or, if that’s too risky from the government’s perspective, simply make the conditions enforceable by the attorney general and allow taxpayers to file on-line complaints with the attorney general if they find out something that gives them concern about where the gas tax money is going. The on-line filing can be analogous to the HIPAA filing process and in the same manner as with HIPAA there can be a provision in the gas tax bill that states that there are no private causes of action permissable under the bill. BUT unlike HIPAA, the bill should have a little more teeth so that if the attorney general investigates a complaint and determines that the filer was correct and that the gas tax bill has been violated, the wrong-doer can be heavily fined and the money can to the place it was supposed to go to in the first place.

Putin (ptu1969), Can You Spell “Socialism”?

Just one problem. We are a capitalist nation. Let’s keep it one!

[i]Good Thinking. Raise Taxes And Let’s Expand The Size And Scope Of Government, And Make It More Complicated And Intrusive![/i]

It no doubt will lead to more problems, so take away some rights, pass some new laws that can’t be enforced, and turn all of this over to a government that is the problem, not the solution.

A higher gas tax is absolutely necessary to internalize the negative externalities of gasoline usage. All of the problems (e.g, regressive) that have been mentioned with a higher gas tax can be solved. One possibility is a revenue neutral gas tax in which income taxes are reduced while the gas tax increased. There are many possibilities, but the bottom line is that we need a much higher gas tax and eventually a general carbon tax.

I Know, Let’s All Turn All Of Our Money Over To The Government. They Know Best How To Redistribute It! (They Have A Proven Track Record.)

You go first!

Darn. I guess I have to agree. And if they won’t go willingly we should drag them in chains!

And why shouldn’t “those with more money” do the same? A tax on overuse would drive this point home to “those.”

“I would point out that the car companys created this mess in the 1920’s and 30’s when General Motors, Standard Oil, Firestone Tire, Mack Truck and Phillip petroleum conspired to buy up and destroy all light rail systems in the nation.”

Not only did you get the urban legend wrong (it was in the 1950’s), but it’s an urban legend. The old “National City Lines conspiracy” drivel is a nice conspiracy theory with lots of popular support and promoters (among them the movie “Who Framed Roger Rabbit?”), but the scholarly research by those who actually track transportation and corporate history on an academic basis shows that, at best, all the cohesion between those various entities did was hasten only slightly the inevitable demise of streetcars in cities where it would have perished on its own anyway, and give GM, Firestone, et al a firm market for its products. As partial proof, consider that trolleys also disappeared in most cities and towns without any help from NCL.

Regrettably, though, just as with any other juicy story or urban legend online, it’s become all but impossible to debunk this legend, in part because one can’t “prove a negative,” in part because there’s just enough truth to the reality to lend too much credence to the distorted version, and because everyone loves a good conspiracy theory to the potential exclusion of even common sense (see also Roswell, UFOs in general, the Bermuda Triangle, a myriad of theories about 9/11/2001 and the terrorist attacks, etc.).

We already have a gas tax. How would raising an existing tax make things more complicated? Answer: it wouldn’t.

Here’s a variation on the gas tax proposal…or maybe an ‘add-on’ proposal:

Flip the tax levels between diesel fuel and refined gasoline! Here’s why…

Diesel typically costs more than gasoline…not because it is more expensive to produce than gas (it is actually far less refined) but because the taxes on it are higher. This increases the cost of products that are shipped by diesel powered trucks, trains, and boats. Manufacturers and distributors simply pass the costs of transportation up the line to the consumer. So…a reduced tax on diesel would keep the costs of products from rising…thus encouraging the consuming public to buy more widgets (not to mention groceries)…which thusly stimulates the economy. Conversely raising the tax on refined gasoline would encourage less driving, and more reliance on mass transit (which would also keep their costs down since many current mass transit vehicles run on diesel).

Yes, I know that diesels polute. I’ll let the M.I.T.'ers do the math to see if there is a green enough offset by having fewer miles driven/gallons burned by gasoline powered vehicles.

Yes, I also realize that all the Jetta dieselers out there would have the advantage. I, myself, await Subaru’s diesel.

This Is About Tax Increases And More Government Involvement. One Guy Just Said …
“And in response to the below guy who has to rant about government mis-spending - there’s an easy solution which is called legislation - the gas tax bill needs to have conditions attached to it which would give the taxpayer standing to sue the government if they fail to enforce those conditions. Or, if that’s too risky from the government’s perspective, simply make the conditions enforceable by the attorney general and allow taxpayers to file on-line complaints with the attorney general if they find out something that gives them concern about where the gas tax money is going. The on-line filing can be analogous to the HIPAA filing process and in the same manner as with HIPAA there can be a provision in the gas tax bill that states that there are no private causes of action permissable under the bill. BUT unlike HIPAA, the bill should have a little more teeth so that if the attorney general investigates a complaint and determines that the filer was correct and that the gas tax bill has been violated, the wrong-doer can be heavily fined and the money can to the place it was supposed to go to in the first place.”

Simple as rocket science!