New Fuel Tax Suggestion

Maintenance/Repairs
61

Most European countries heavily tax large cars, large engines and fuel for a number of reasons:

  1. Cars have to fit the size of the streets and narrow roads; large US cars just don’t fit.

  2. Most European countries do not have their own oil; to keep from running large trade deficits they minimize the amount of oil imported.

  3. Countries without a car industry, Denmark, Switzerland, Norway, Finland, Luxembourg, etc. want to limit the large outflow of cash, so many have a tax structue that favors impoting smaller cars.

  4. European countries with dense populations are the ideal location for public transportation, and intercity trains. If they make driving too cheap, massive congetion would take place and public transit would have to be subsidized.

  5. global warming is now a driving foroce as well, and tailpipe emissions at 125 grams/kilometer dictates smaller,lighter cars.

So, having all this money available results in good public transportation, and the health care support is a RESULT, not the reason for having expensive gas and high licensing fees. Free university education is available as well in many countries.

62

The other big ?joke? promoted by the ?energy? companies, is hydrogen powered cars. When the oil gene stops giving, they want you to a jump to another centrally (by them) controlled energy source with distribution pumps and the eternal price sign. Now per cubic foot instead of gallon.

The last think they want is localized electric generating plants that utilize the ?natural? generating source contingent to the area (saving as much as 40 % in distribution loss from a few large sources); protection us from power loss with multiple sources on the grid and giving us local control.

In the interim, I would like to see multi fuel hybrids that plug in for <40 mile per day trips that takes Exxon out of the picture.

63

Thanks for doing a better job of makong my point…

64

“Craig 58…please remember that comparing Europe’s cost of fuel to ours is illogical. The cost per gallon for the fuel proper is the SAME. They CHOOSE to pay consumption taxes as high as 70% (ours about 30% combined) to support national health care and public transportation. This is a position I feel we rightfully not choose because of our land mass and chosen independence that we could not afford. We prefer higher non consumption taxes to meet our needs. Our land mass helped win two wars, their lack of puts them at risk but makes them prime candidates for public transportation.”

I do understand that (europe buys their oil from the same sources), and I’m suggesting that it might be time to (partially) adopt that model. Part of the reason that they choose to go that way was the fact that their consumption exceeded their production and they wanted to minimize energy imports. The U.S, is now in a similar situation, and the inevitable result will be increased energy cost. It’s just a matter of how we want to get there and who gets paid. The public transportation will appear when there is sufficient demand, and the demand will be driven by price (eventually). Personally, I have no problem with consumption taxes, especially when the goal is to reduce consumption. At the end of the day, the fact is that the U.S. is consuming more energy than they are producing and that is not sustainable. Also, I’m not sure “land mass” is a significant strategic advantage in the 21’st century.

BTW, I do not believe that H2 powered vehicles are a viable solution either. The H2/fuel cell design is really just another type of energy storage device (battery), I do think that plug-in electrics (hybrid or not) will have a place in the short term.

65

If you list the richest countries in terms of diposable income, health, eduction and life expectancy, there are many in the top 20 with a small landmass and no indigenous energy: Germany, Japan, South Korea,Taiwan, Hong Kong, Denmark, Singapore, Switzerland, Belgium, Sweden, Finland, etc.

Countries with large landmasses, such as Canada (second largest country), Australia, Rusia (largest of all) China, Brazil, the US don’t necessary have the highest living standards.

Japan started WW II in Asia by trying to become self-sufficient in oil by conquering Malaysia and Indonesia. That did not work out, and Japan is much happier now with a huge trade surplus and enough money to buy all the energy they need. Russia has lot of land area and energy, but has a pathetically low living standard due to mismangement, corruption, treating its citizens poorly, etc.

The best security is discipline and curbs on excessive consumption of strategic materials. That’s what Japan did after the first oilshock in the 70s. Oil has become a strategic commodity.

66

Very interesting…

67

That is precisely wht we don’t want to do; it will keeep the gas guzzlers guzzling! A tax collected like the road tax now charged goes into general revenue. In the case of a gas surtax, however, a certain amount should go into research for alternate energy, and public transit. Real wasters will get some benefit, of course through lower overall taxes. But the ones who waste least should benefit most.

Commercial vehicles and farmers get a tax rebate on their vehicles used for business only. That’s different. Business often needs gas guzzlers to get the job done.

68

Your proposal is essentially what I have felt was the best possible method to move on from petroleum to whatever technology proves is the best replacement. The first gas crunch found me in California and life was chaotic due to the price controls. Now, the “free market” is bringing chaos to the public while making oil companies and speculators wealthy.

69

Nice suggestion Comrade. Have you ever looked into the successes of nations who have re-distributed the people?s hard earned money? Government employees are the people thriveing. And, what about us guys who served their country and have varying degrees of disabilities which would make certain forms of transportation impossible?
The answer to the dilemma is the country being self-reliant for petroleum products. Developing this self-reliance will never happen as long as we have shallow-minded, hyper vigilant, tree huggers who vote Socialist-Liberals into office who control what used to be our country?s free press. We either become self-reliant or we take reasonable time to develop better ways to fuel our cars and heat our homes with the taxes politicians have already put on fuel.
Have you been asleep for the past 40 years or are you just a victim of the modern media.

70

Chill out Norm. It is highly unlikely that a country of almost 300 million that imports almost half it’s oil is going to become “self-reliant for petroleum products” without reducing consumption somehow.

71

Craig: Eisenhower did just that with the 4 cent/gallon federal tax in the 50s to build the Interstate Highway System. That’s today’s equivalent of about 24 cents per gallon. A very successful program in my opinion. Diverting a portion of a gas tax to research in alternate energy sources and funding public transit will KEEP ALL THE MONEY AT HOME. Gas consumption could decrease by 30% as we shift to more frugal cars, and none of the money saved will end up in the Middle East. A win-win situation.

72

I partially agree with Beefy Norm. If all Americans drove the equivalent of a Toyota Yaris or a Golf TDI Diesel, and only farmers and businesses had pickup trucks, we would save about 35-40% of the liquid fuels for transportation. With stepped up drilling in Alaska and US coastal areas, about 10% more oil could be produced. With a high intensity progarm to develop plug in hybrids, we could actually make the US self suffuicient.

Then Beefy Norm has to be honest with himself and be willing to stick-shift a 1.5 liter car, and plug it in every night and at work. One result of all this would be a $300 billion/year saving in oil imports, and much cleaner air. Arnold Schwartzenegger would love you Norm.

73

I’m in favor of funding both alternate energy and public transportation, but I think decreasing consumption by 30% would be a significant challenge.

74

“If all Americans drove the equivalent of a Toyota Yaris or a Golf TDI Diesel, and only farmers and businesses had pickup trucks, we would save about 35-40% of the liquid fuels for transportation.”

That’s the problem, what are describing is not going to happen without a mandate or very strong financial incentives (much more than $5 gasoline prices).

75

Surprisingly, from everything I?ve read, and you all will correct me if I?m wrong; OPEC is NOT insulated from the CAFE standards and consumer choices overall for cars (40% of our consumption).

We really don?t need to threaten total independence from them to drive down oil prices or tax oil out of existence… They are highly dependent on a steady flow of oil and a perceived change of -10% to -15% (debatable) could bring about a drop in barrel price of crude as well as refinery prices from our own benevolent energy giants.

If and when that happens, we as consumer will return to our gluttonous ways, when we should use it as an opportunity to then add a consumption tax to continue downward pressure and remove big oil from it?s dominant roll with that tax revenue going to support small business competition for alternate forms of energy.

Cheap solar arrays are just around the corner. Lets make sure they aren?t imported from China and don?t have BP or Exxon stamped on the box.
Or we could sit on our collective butts and wait for a Bush/Cheney light take over.

The key to energy independence are not the choices we make when times are tough, they are easy; it?s the choices we make we times are easy and we really don? t think we have to. That?s the time for more energy efficient cars and Small Bussiness TAX INCENTIVES.

76

“We really don?t need to threaten total independence from them to drive down oil prices or tax oil out of existence… They are highly dependent on a steady flow of oil and a perceived change of -10% to -15% (debatable) could bring about a drop in barrel price of crude as well as refinery prices from our own benevolent energy giants.”

That is an interesting question, I know that the U.S. is OPEC’s biggest customer but I do not know what percentage of their total output goes to the U.S. Therefore, I do not know how much of an impact a U.S. reduction is likely to have. My guess is that they would simply reduce production and drive the price back up. It is also interesting that the U.S. imports less than half it’s oil from OPEC members (the biggest supplier is canada). This is some interesting data:

http://tonto.eia.doe.gov/dnav/pet/pet_move_impcus_a2_nus_ep00_im0_mbbl_m.htm

77

We’re missing some key information here, I believe. Mr. Mconn assumes oil demand is static, and if we reduce US demand the price will drop. The answer to that is more complex.

At this time, oil demand worldwide is growing rapidly because of rising living standards in developing countries, mostly in Asia (China, India, etc.), as well as US demand. Oil is not being discovered at the same rate it is being consumed, in spite of billions being spent on exploration. Also, most of the easy, cheap oil is already tappped, new discoveries will cost much more to develop. We are not about to run out of oil; we are running out of easy to produce and “cheap” oil!

So, if by magic, next week the US consumed 30% less, oil prices would merely stop rising, not plummet. That 30% will be made up withinn a few years by India and China.

At present, Canada and Mexico are the top suppliers to the US. Nigeria and OPEC make up the rest. Mexico’s reserves are dropping, since they lack the money to aggressively develop new ones. 60% of PEMEX’s revenue is grabbed by the Mexican government for operating expenses. Canada has plenty of reserves, but they are mostly oil sands, and expensive to produce. About 1 million barrels per day is presently exported to the US.

In summary, oil prices are driven by total world demand; OPEC can fiddle a little bit with finetuning the supply, but all OPEC members are poorly run countries and are in need of the revenue. Saudi Arabia is the “swing” producer, but its ability to increase supply rapidly is not what it used to be; they are busily developing new supplies, since current production is tightly stretched.

In response to Craig’s question, I believe that the US is not a major taker of OPEC oil; Japan, and many Asian countries, and most of Europe import all their oil, mostly from OPEC. But oil is an international commodity; the 1970s oil crisis proved that a tanker leaving the Middle East for France could easily be re-routed to the US by the international oil companies. No one country or organization has a hammer-lock on oil supply anymore.

78

A significant challenge, certainly. But not an insurmountable challenge.

a 30% drop in consumption could be achieved by increasing average mpg to 34 mpg while keeping miles driven per year constant. Or we could push to drop the mileage. It wasn’t long ago that people put an average of 9,000 miles per year on their cars (in the 90s, IIRC). Pushing back to that amount of driving would easily reduce consumption 30%. People (even professionals) used to ride the bus. Now bus service is so sporadic and often poorly planned that bus riding is difficult at best for many people. I’d love to ride the bus to work. It takes me 20 minutes to drive and 1 gallon or so per day, or I could ride the bus and take about 1.5 hours each way. If they laid out the system better and I didn’t literally have to ride the bus 20 miles out of the way each way it could easily get me to work in 30 minutes on surface streets and I’d be on it every day.

Or what about flex work / telecommuting? Our office finally started opening up to that a bit more. Work 4 long days a week instead of 5 shorter. Or work from home 1 day a week… I could cut my overall consumption by 15% easily by doing just that.

Plenty of options, but people and politicians are far too interested in preserving the status quo, which has been proven to not be that great of an idea.

79

I agree with the idea of looking to create a business exception.

But then I look at the Hummer H1 that the local embroidery shop has as a “company” vehicle and get reminded of the gross abuses people are already committing of the current tax code and wonder how bad it would get when all of a sudden every vehicle becomes “work-related”.

Maybe if we insisted that all work vehicles have solid rear axles, no a/c, black vinyl seats, etc… :slight_smile:

80

“A significant challenge, certainly. But not an insurmountable challenge.”

I agree that it could be done, but it’s simply not going to happen with $3 gasoline. There is no incentive with fuel this cheap. Maybe $6-8 gasoline would cause enough change to reduce consumption significantly. I’m certainly not going to ride a bus to save $50 per week (actually I work from home when I’m not traveling), but it might be more attractive to save $150 per week. Very few people are going to get rid of their 20 mpg SUVs at these fuel prices, again there is no real incentive because the payback is too long.