“but I simply don’t trust the government”
Sorry to say it, I agree. Implementing the plan as I described it has about a 0.0000000127% possibility of happening. If it were passed they it would almost certainly funnel off a good percentage to special projects and not returned to the taxpayers.
OK, that makes more sense. You are talking about reducing the rate of increase over the years.
I understand that you are trying to create an incentive for people to use less energy, essentially a tax credit for using less than average. If 100% of the tax is refunded, the total cost will stay the same; Im not sure that will result in an overall reduction. It seems more likely that it would just reward the folks who are willing/able to use less fuel (i.e., my 17 year old can go get a summer job and qualify for a refund, or just file a tax return to reflect her passive income if I put a mutual fund in her name). Some people (like me) are simply going to pay whatever it takes to drive as usual. I believe this would also result in a discrepancy between low income urbane and rural folks. I’m also afraid that it would just end up being another tax that people don’t associate with behavior and will probably have the biggest impact on the “working poor” who need transportation and can’t afford an efficient vehicle.
I honestly don’t see a painless way of doing this, if you want to reduce consumption you are going to have to increase the real cost of energy to everyone.
"Why not just send a bill every year directly to commuters for…say…$2000? "
Because that is the kind of thing we do now. It does nothing to encourage the reduction of fuel usage. It does not bring the question to the individual.
I would hope my plan would give more incentive to reduce their fuel cost. It would is a small way allow those who use more and pollute more, to pay back those (including themselves) some small part of the cost of pollution. We all suffer from pollution. From illness and reduced life of the paint on your home, to reduced farm production.
You’re ignoring the impact to goods and services that will seriously impact each and every one of us when the cost of fuel is increased 200%. Start refining your plan to exclude certain groups of users and it quickly becomes onerous and impossible to manage or control. The end result is a plan that requires a pallet jack to move around and has all of the waste and fraud issues we see in every form of government controlled commodity today. Insanity is defined by doing the same thing over and over and expecting a different result 
The U.S, consists of about 7% of the worlds population that is using about 20% on the energy. At the moment we are importing close to half of our oil needs, creating a significant trade deficit and further weakening the dollar. The energy consumption in the developing world is going to increase significantly in the next few decades, which will further drive up the price and make the U.S, more dependent on oil exporting countries. Even if we ignore the environmental aspect of the issue, this behavior is not sustainable from an economic/political point of view. Clearly, we do not have a “market driven cost scenario” today, the cost is being controlled by external factors.
Maybe the U.S. could live with this imbalance when they were in the manufacturing business, but that horse has left the barn and isn’t coming back. If we do nothing energy prices will increase sporadically based on global supply and demand, leaving the U.S. economy at the mercy of the folks who control the resource, that does not sound like a very good plan to me. The U.S. could try to increase oil production to meet demand, but I don’t think that is a realistic option either (at least not at current consumption levels). A certain amount of oil consumption could be off-set with alternative energy sources, but most of them are simply not cost competitive today.
The only realist option is to increase the cost of energy in a somewhat controlled manner, this can be done by taxes (as suggested) but I’m not confident that the revenue will be effectively applied to the energy issue if it’s managed by the government. I would prefer to see the imports either limited or taxed to drive up retail prices. At that point I believe that market forces will start to work. I know that will increase the profits of the “evil oil companies,” but who cares? Hopefully, in 50 years a combination of reduced consumption, increased production, and alternate sources will combine to (more or less) fix this issue. In the mean time, it’s not going to be pretty but something has to be done.
“it should not cause any disadvantage in global competition, in fact it might provide and advantage.”
So you’re saying that increased fuel costs in the USA will not increase manufacturing costs. Is that right ?
Even were these increased costs negated in the USA by your proposed tax refund, those costs will have no offset overseas, therefore US products will cost more than their competitive counterparts from other countries.
In any case why road transportation ? Automobile engines are very efficient when compared to aero jet engines, why not go after the airline industry ? Or is it as usual that individual motorists are easy prey ?
OK, problem…how do you track fuel purchases per person and rebate those taxes accordingly. That would require some kind of gas purchase tracking card or the input of your SSN everytime you fill up…not gonna happen! This would require millions of$$$ to implement and would require the cooperation of every gas station and new equipment for said stations. More $$$! Now, those who commute…that is a choice based on where you desire to live. I could have moved 2 min from my work, but I chose to live further away for family reasons. That was my choice, it’s also my choice to drive as fuel efficient car as I could afford. Any commuter who drives an Urban Assault Vehicle (aka SUV) should not whine about fuel costs. They chose their means of travel and now have to live with it.
If I understand Joseph’s plan, it would be revenue neutral with no overall increase in overall fuel cost (it would just transfer the cost to the individuals who use the most fuel and reward those who use the least). In theory, that wound not increase the (average) cost of manufactured goods it would just favor efficient operations.
However, I believe we do need to see actual energy costs increased (not revenue neutral) to significantly reduce consumption. An actual increase in energy cost would increase the cost of manufactured goods. Personally, I thing trying to save the remains of the U.S. manufacturing sector is a waste of effort anyway. The manufacturing sectors biggest problem is their inability to control labor costs, they are going away anyway. When it comes down to it I would rather see us export jobs than import energy, not everyone will agree with those priorities.
I do agree that none of these plans can “exclude certain groups of users.” For this to work it has to be across the board and the entire economy will have to take a short term hit to pay for past stupidity. This is sorta like living on nothing for a year so you can pay of all you credit card bills and get on with you life.
No, he’s simply saying that you add a $0.50 tax to every gallon of gasoline, add up all the revenue for the year, and and give every taxpayer an equal cut of the money. That way folks who use less than average come out ahead and folks who use more than average come out behind.
How about just using receipts? We do this know for other deductions.
It’s a consumption tax, pure and simple.
Consumption taxes on necessities can be unfair taxes. In New England and in much of the country commuting is a part of the environment. Commuters would be directly hurt by additional gas taxes, whereas those in urban areas that have access to public transportation would not.
I understand that the goal is to reduce consumption, but that will only happen for those who CAN reduce their consumption. Commuters would be severely penalized for something they have to do.
And directing the use of the tax revenues is meaningless… the government dipping into new tax revenues for porkbarrel projects would not exactly be unprecedented.
The free market system is polluted enough with improper additives. I’m not in favor of any more.
Although not trivial light trucks and cars only comprise 40% of the US’s oil consumption. I don’t think this tax is the end all to addressing the overall problem.
There really is not as much of a limit to fuel supplies as people think, its really just a limit to inexpensive(current prices) fuel supplies.
I believe natural progression in prices and market will eventually drive conservation and consumer habits. There is an entire fleet of pretty efficient vehicles already being built elsewhere. The technology will trickle back here and we will purchase them.
Forcing anything is fruitless and not the nature of our country.
“I understand that you are trying to create an incentive for people to use less energy, essentially a tax credit for using less than average. If 100% of the tax is refunded, the total cost will stay the same”
The intention is to refund the tax in an equal amount to anyone filling a tax return. So if you use less fuel you will pay less tax, but receive the same refund as someone who uses ten times as much. The person who walks will not pay any of the tax, but they will also rreceive the same refund. That will help pay for the cost of commercial transportation built into the cost of delivered products and the additional cost we all pay for pollution.
I would agree that it would not be logical to tax everyone and then return the same amount each individual paid to that same individual.
“So you’re saying that increased fuel costs in the USA will not increase manufacturing costs. Is that right ?”
While I only addressed individual tax, the same type of idea could also be applied to commercial users. In that case if a commercial user were to reduce his use of fuel more than others, he would be rewarded by paying less tax than he would receive back in refunds.
“In any case why road transportation ?”
Because CarTalk is about road transportation.
Assuming light cars and trucks comprise 40% of the US’s oil consumption… Fortune claims US vehicles average 21 mpg, while in Europe, where they tax the heck out of fuel, the average is 36 mpg. Other numbers I have seen for the US put the number closer to 25 mpg. Say you move the fleet from 25 mpg to 36 mpg. You only need 69% of the amount of gas to do the same amount of transit. So you can reduce total US oil consumption by .4-.69*.4 = 12.2%.
That’s not insignificant. That’s the equivalent of 2 ANWR scale production fields.
In fact, that probably has more potential than any other single movement to improve the supply/demand situation.
Is it the end all solution? Nope.
But this proposed solution is better than taxing the heck out of gas and having it all go who knows where, or allowing the status quo, which simply promotes economic instability, dependence on foreign energy where the supplying country is hostile, etc…
All resorts cater to out of area guests. That’s their primary business.
Tourism would also be hurt. Ski slopes, beach areas, The Flume, Santa’s Village, you name it.
There is some overhead cost to collect and distribute the proceeds. I think it will be significant. That money needs to come out of fuel taxes so that this tax plan doesn’t cost us more than we pay already. But how do we know where the money goes? It seems to me that the opportunity to use the tax proceeds for other things is great, and eventually a lot of it will fund other projects. How can this spending growth be stopped?
Is this a plan to reduce illegal immigration? Illegals won’t file tax returns yet they will pay the fuel tax.
The first thing that might happen is that more people will carpool. If 2 people carpool and gas doubles due to taxes, they pay as much as they did before, yet use about half as much gas. More economical cars and trucks would come several years later.
okay, so your idea is a little ‘raw’.
“Because CarTalk is about road transportation” - Then why are you hijacking it to pontificate about some unworkable political agenda then ?
A bump of $0.50 would never get through congress. I do believe we need to reduce our nation’s dependence on imports. We would not be loosing so many young people in Iraq if it were not for our demand for oil.
Such a large bump would also bankrupt our american automobile manufactures. People would rush to thoes miny imports. You think our economy is bad now. Put another 200,000 auto workers out of work.
I believe we should send a message by advocating raising the gasoline tax a small amount ($0.10?)now and by addind $0.005 a month until the needed reduction in consumpyion is achieved. This would give american manufacturers time to retool their plants to produce those smaller hight fuel efficient vehicles people will be wanting down the road and allow people to use up the gas guzzlers they are driving.
People seem to think the price of gas is going to go down in the future. It is not. There is a finite amount of oil. The easy to aguire is already used up.
Use the income to pay down the debt from the Iraq war.