New Fuel Tax Suggestion


#1

We all hate taxes. We all know we should conserve our limited fuel supplies. We all don’t want to give the boys in Washington more money to spend on their special projects. So what do we do?



I suggest a revenue neutral fuel tax. Maybe 50? this year and next then 25? each year there after until it gets the desired result or reduced fuel usage.



Now the trick is what to do with the money collected. I suggest a tax rebate of an equal amount to each person who files a tax return.



Those who use less than average will get more back than the pay and whose who use more will get less than they paid.



For the most part that will mean that those who are not conserving will pay more and be encouraged to do more. Also those who can’t afford a car, will get back money from those of us who are better off. But most important the DC boys and girls will not be able to use the funds for their special projects and those who don’t file returns will not benefit.


#2

There’s nothing new about your suggestion. It’s been touted about a number of times before. Just putting a dress on a pig IMO. Another veiled attempt at a socialist program designed to redistribute wealth without earning it.


#3

I’m not sure a tax is the way to go, but if so I don’t think a decreasing tax structure will work. If everyone knows the tax will be reduced, bubba will still go buy his big truck based on the assumption that it will become more affordable when everyone else reduces their consumption.

As an alternative, what about a duty on imports of oil/gas. That will drive up prices and it might actually help the value of the dollar which isn’t being helped by the trade deficit. The revenue from the duty can become tax incentives for alternative sources.


#4

All taxes are wealth redistribution, it’s just a matter of how you want to implement them. If the goal is to reduce energy consumption, the cost of energy has to increase significantly. If you don’t want to do it through taxes/duties, you will have to put mandates in place that will drive up the price (just another form of tax).


#5

I am not sure where you are going with this. Your suggestion is terribly vague. As near as I can tell, if I use an average amount of gasoline I will pay X dollars in federal taxes and later get X dollars in a tax refund. And if I come in 1000 miles under average, how many nickels or dimes will my trusted congressman reward me with? Let’s simply say that this idea needs more work.


#6

Problem with this and other similar ideas is that they ignore commercial realities.

If you could sell the idea worldwide, that would be another thing. Otherwise you are handing opportunities to undercut US manufacturing costs to global competitors on a plate so to speak. Increase the costs of fuel in the US and China (who I suspect will not impose such a levy) will have an even greater commercial advantage over ‘responsible’ countries.

One country alone cannot fix this problem, at the moment fuel prices are regulated by OPEC and global market forces, that is as it should be and any consumption controls should originate there.

I’d also be wary of levying government taxes without a clear mandate, fuel taxes in Europe are sky high though very little of the money contributes to improving transportation infrastructure. Without trying to sound too cynical, it wouldn’t take long for some government bean counter to realize the potential of reducing your tax refund by 50% for use on some of those ‘special’ projects.


#7

Unintended effects of legislation plague lawmakers. Do this and discretionary driving will plummet. Resorts will be hurt, and those affected the most will be the ones living on the edge, already in debt. Recessions put people out of work–ever been without a job and a family at home? Far better to increase mandatory mileage for vehicles while developing alternative sources of fuel.


#8

“Do this and discretionary driving will plummet.”

I believe that is the intent.


#9

I support the direction that Joseph Meehan’s idea is taking, for several reasons.

1: Higher fuel prices will be the only thing that causes us to fix our energy problems (eg innovation for alternate fuels, fuel efficient cars, mass transit, …)

2: If the higher prices come in the form of taxes, then that extra revenue largely stays with us. We can disagree on how it might get spent, but spending it on programs in the United States means the money keeps giving back,(ie, if it goes toward hiring a teacher or law officer, they in turn buy a house, which pays for a plumber and carpenter, who buy a car, go out to eat, and go on vacations, etc)

3: If the higher prices do not come from taxes, then that extra money either goes to the oil cartels or fills the pockets of the wealthy oil execs.

There is no question we’ll be paying more for energy. I sure would like to see that extra money be used in a way that helps all of us in the long run.

Joe


#10

I agree in principle, but I simply don’t trust the government to implement the tax at the retail level, much of that money will simply disappear into the overhead of the program. I would actually prefer to see the oil producers make the profits, at least some percentage of the money would find its way into R&D. If the government needs to intervene, I would prefer to see it done though import duties (to encourage domestic energy capacity) of through mandates that require a reinvestment in energy R&D. I do not believe we can simply tax our way out of this, the issue is more complicated. BTW, the government is indirectly raising the price now by allowing the dollar to devalue. Lowering interest rates and putting more currency in circulation will increase the cost of all imported goods/services, including oil.


#11

I’ve been a strong supporter of the exact same idea for ages, and have proposed the same idea all the time. I think its the fairest situation you can think of. You have all the power to decide what you’ll pay under such a plan.

For those wanting more specific numbers, here’s an idea of what it means:

The average american drives about 12,000 miles per year in a vehicle that gets about 24 mpg (courtesy NHTSA). That means about 500 gallons per person. Throw a $2 per gallon tax on gas. That means that the average revenue would be $1000. Take the total revenue and divide it equally among all people with a w2 filing a tax return. Because a good number of drivers are not employed, the revenue for each person would in actuality be closer to $1300 (taking March 2005 gas consumption with March 2005 labor force statistics and estimating for retirees still paying income tax).

So what’s the benefit? If you want that 12 mpg vehicle, you can still buy it. But by buying 1000 gallons of gas a year (12k miles per year), you pay $2000 in tax. Take out the $1300 rebate, and you have a $700 net tax each year. Or say you buy a 30 mpg vehicle instead. 400 gallons per year = $800 tax-$1300 rebate = $500 credit for driving a fuel efficient vehicle. Say you wanted to live farther from work and drove 25,000 miles per year in a 12 mpg vehicle -> $2867 net tax. Do the same in a 30 mpg vehicle -> $367 net tax. Take the bus to work and drive just 5000 miles per year in an average vehicle? $883 net credit, more than enough to pay for that bus pass in most cities.

Some people may call it socialist, but it lets people make conscious decisions about how much tax they want to pay, exactly like the “FairTax” that so many conservatives are in love with. Such a proposal would not take a single cent from someone working and give it to someone who wasn’t. All it would do is give you an incentive to do better than average.

There are numerous other benefits I could see as well:

  • More demand for public transit from those not wanting to spend $ on gas.
  • While you have the choice to decide what you want to do, the high cost would shock many into conserving more
  • Not a regressive tax
  • No forced wealth redistribution
  • Encourages people to file tax returns (no rebate otherwise), thus eliminating some cheats and noncompliance from the current code that costs $330 billion in lost tax revenue each year.
  • Discourages sprawl and encourages urban renewal
  • Pushes back to restore lost services, like school busing.
  • fewer vehicles on the road because of mass transit = less spending needed on roads = lower taxes elsewhere.

#12

I’m opposed to any plan that involves government force. This falls into the socialism category and I don’t subscribe to that political theory at all.

I do not believe in taking money from Person A by force so it can be donated to Person B.

If we’re going to use this theory then I propose a tax to really further energy conservation. Perhaps a 25 cent tax on each internet post, 30 cents for each worthless email sent, 50 cents if a file is attached, and a buck for each person that a worn out joke is sent to.
Each person would get a printout before tax time and the people not wasting time on the net would get a rebate for conservation and the consumers would pay dearly for their wasteful habits.

There’s no difference that I can see between the two.


#13

Great Idea…but here’s the problem.

Making sure the tax is NOT used for anything else in any other way. I can’t tell you how many times when I live in NY that a tax was added for a specific project…but that money was diverted to something else…but the tax stayed…in fact 10 years later another tax was added for the same project because there was no funding…HELLO…there was funding but the tax was diverted to something else. The feds have done this THOUSANDS of times…These “Ear Marks” i.e Special interests has gotten way out of hand…Now they’ll have MORE money to spend…and they’ll find a way to do it.


#14

“I do not believe in taking money from Person A by force so it can be donated to Person B.”

However, in this case, Person A does not have ANY money taken from them by force unless they choose to do so of their own free will… And then how exactly are they being “forced”? No one is forcing them to consume more than an average amount of gasoline. They do so of their own free will.


#15

“if I use an average amount of gasoline I will pay X dollars in federal taxes and later get X dollars in a tax refund.”

Half right. You pay the tax as you buy fuel. The tax is then refunded not based on how much you paid, but rather it is evenly refunded to everyone who files a tax return, not just those who paid the tax.


#16

“I don’t think a decreasing tax structure will work.”

Sorry I was not as clear as I should have been. That would be a total of 50? the first year and ADDITIONAL 50? the next year and maybe and additional 25C (total $1.25) the following year.


#17

See, that is where we differ. I don’t see the need to reduce consumption. I like the market driven cost senario we have now. What is your reason for wanting to see a reduction?


#18

“If you could sell the idea worldwide, that would be another thing. Otherwise you are handing opportunities to undercut US manufacturing costs to global competitors on a plate so to speak.”

My suggestion was not for all fuels uses, only over the road transportation.  Since it would be neutral overall (returning to the public the same amounts charged) it should not cause any disadvantage in global competition, in fact it might provide and advantage.

#19

“Do this and discretionary driving will plummet. Resorts will be hurt, and those affected the most will be the ones living on the edge, already in debt.”

I think not.  Some resorts will be hurt, but only those who cater more to out of area guest.  Those who cater to local guest may benefit.  And for those who are on the edge, remember that they will likely be among those who receive more back than they pay giving them more disposable income.

#20

Oh no! Not another “let’s force fuel conservation by usery taxation” post! Why not just send a bill every year directly to commuters for…say…$2000?

Clearly you don’t live in an area where commuting is commonly necessary. If you did you would not be making such a suggestion.

We’ve had this discussion before. It’s a bad idea. And “revenue neutral” and “tax” are mutually exclusive terms.

Sorry, but I have to adamantly disagree with this idea.