I think it’s a great idea. Been suggested before and lots of people went nuts, they like cheap gas. It would be best coupled to reducing some other tax like sales tax or payroll tax. Go to http://www.carbontax.org/ to get lots more info.
I can see one benefit to higher fuel prices whether they result from market pressures or added taxes. That would be to trigger investment in public transportation systems good enough to attract people who view driving only as a means of transportation. Getting them off the road would be a real boon to those of us who drive because we enjoy it.
If the motivation is reduction in carbon emissions, the tax should apply to all carbon sources. This would include gasoline, diesel, natural gas, home heating oil, coal, biodiesel, ethanol and any others I haven’t thought of.
It’s time to ban people who think they have a panacea solution from passing laws to force others to obey them.
We need a law that prohibits government from taking more than 10 percent of anyone’s income.
And public transportation is a myth solution. The transit proponents look at only fuel figures. But they don’t look at how many different trips different people have to take. In all but the 15 largest cities of the US, fewer than 10 percent of the trips people need to take are even served by transit. And in rural areas, forget it.
If the transit systems served all of the trips, they would use more buses and fuel than the private cars now used.
You are brilliant, Jeremy. I think I’ll throw my Economics degree out the window. In fact, I think the state of Florida is not being compassionate enough. I recommend an immediate increase in the minimum wage to $35.00 per hour. This would show how much we care. Would not cost any jobs. And wouldn’t increase the cost of living to anyone.
The fact is that the cost of gasoline or anything else has effects at the margin. This means that there is someone who has to make decisions about how much to spend on food, health care, sanitation, etc. Most don’t have a choice as to how much to spend on getting to work and the grocery store(at least in the short run).
When these at the margin chose to, or are compelled to, spend less on the things that improve their health and life, they will die more frequently and have shorter lives.
Now if you are what we call an ‘Old line Lefty’, your position is, “That’s okay, we must sacrifice all we mus for equality.”
The other position is, “We need to do something to thin the heard anyway.” If you are a social Darwinist, there are definitely arguments you can make for that view.
I happen to love my neighbors. And when ever possible, I either work for the poor or I volunteer for the poor. I want them to have as good a standard of living as possible.
Unlike every other country in the world, here the poor are very likely to have an automobile(and a refrigerator, and a TV, and air conditioning)and use it to access employment.
To consciously make these people’s life more difficult is immoral on a level a cannot imagine for an informed person.
Peace and Liberty,
Matt
NO… Come on everybody knows that if the government has more money and we have less… Sorry it’s getting tough to sit up… our lives are better!
I am a free market capitalist and love Kludlow and company on CNBC but I think we should pay for the war in Iraq with ever increasing oil taxes.
You don’t say why you want to conserve oil. Is it to save oil for later or is it because you want to affect the carbon balance in the atmosphere? If there is an economic externality in the use of oil, a cost of consumption that goes beyond the loss to the people who own it, then a tax could be a good idea.
Without such an argument, I don’t think it is morally sound for third parties to artifically make oil more expensive to get. Energy is a component of the quality of life, so what you are basically saying is that you think people ought to live harder lives than they do. If you could make the argument that future generations’ quality of life will be reduced by our failure to conserve oil so that you are shifting hardship from them to us, then that would help, but I think that is a hard argument to make. After all, if they would be willing to pay more for their scarce oil, then speculators could also make money by buying and hoarding oil reserves until that time comes.
But the tax idea is better than raising CAFE standards. CAFE standards make the oil more useful, and therefore actually encourage oil use. We end up with cars that are cheaper to operate per mile, but that also leads to an explosion in vehicle miles that overwhelms the conservation for each mile driven. (In other words, the demand for miles driven is, in the long run, an elastic demand.) You can see this in the increased traffic on highways, far out of proportion to population increases, since CAFE standards have gone into effect. Increased fuel economy is a good thing, but it doesn’t encourage less consumption of fuel overall. And it needs to be balanced against the higher cost of a vehicle. The market balances those things, legislation does not. There is an optimum point of balance away from which (in either direction) the quality of life is reduced.
You can get the same conservation effect without high taxes by encouraging oil companies to raise their prices. I don’t remember your applauding the huge oil company profits because of the beneficial effect they have on conservation (if I simply missed it, I apologize), but the effect on conservation is no less than that from a tax. However there is something more morally satisfying about the profits going to the people who have actually produced the valuable product, rather than to politicians who did nothing.
Furthermore, high oil profits encourage the production of more energy–both as oil and as alternatives. Rising prices and profits encourage profiteers to hoard oil and oil reserves, saving oil for the future. An escalating tax would lead people to think oil would be less profitable in the future, thus encouraging dumping of all oil reserves now while the tax is low.
We’ll naturally start conserving oil more aggressively as it starts to run out. But long before it runs out we will have bioengineered some slime that will create something like petroleum as a byproduct of its metabolism–and since it won’t be a fossil fuel it will be carbon neutral. So now we are just taking advantage of the small window of time in which fossil fuel is available, but alternatives are not. In the future, alternative energy will be cheap because we will have better technology for producing it. The markets will encourage that changeover naturally and gradually as supply and demand shift.
It is morally questionable to impose a hardship on the people of today, or actually on the people of six years from today, when it won’t really help the people of the more distant future. That would be like people of the 1800’s artificially raising the price of whale oil or peat fuel because they were concerned that the people of today wouldn’t have energy. Technology advances, and people shift to take best advantage of the resources at their disposal at the time, taking into account (through speculation) the likely value of those resources if saved for the future.
You touch on an important point, perhaps unknowingly. Oil consumption at this time is increasing much faster than we are finding new reserves. There is a good book out which uses sound economics and science to explain that the next oil shock will be around 2015, when total world resrves will have peaked and we can no longer add to these reserves fast enough to halt a decline. US production peaked in 1974, exactly as predicted by a Shell geologist. The book is called “The Last Oil Shock” and makes scary reading, since all of North America seems to be oblivious to what is happening.
Your whale oil analogy is good; US whalers were travelling as far as Antarctica to hunt down the last sperm whales when lamp oil from Petroleum entered the scene. That was not planned; it ewas accidental! Please note at this time, you could still use candles, but they were messy compared to whale oil.
You are implying that with breakneck consumption of oil, a substitute will automatically arrive suddenly. Life is not that simple. England was virtually deforested before coal started displacing wood as a fuel.
So, in a laissez faire environment, consumption will keep increasing until the price will suddenly shoot up, and about 100 million Americans with big cars can no longer afford to fill them up. I agree that necessity is the mother of invention, but alternative fuels and high tech frugal cars take at least 8 years to get into production.
I’m new to this discussion. Didn’t have time to read all 87 pages. Though I’m not against any tax that returns services, Ray’s Modest Proposal seems to be a simple solution that misses the point. There are many simple solutions which will never work, because we are all too selfish. For instance, we could afix a permanent medalion to the outside of every new car and light truck that gets under 20 mpg that says, “Screw my grandchildren–I want my toy NOW!” Or we could make it mandatory for every oil change establishment to fix any oil leak they see, or report unfixable leaks to local authorities, who would require the owner of the leaky car to have it repaired or junked. No one seems to be talking about the huge volumes of oil that leak unnecessarily onto our roads and parking lots, and eventually end up in our rivers and oceans. These proposals would be much less expensive than Ray’s tax, would greatly reduce our consumption significantly, and are still wacko enough to satisfy Tom and Ray’s coff-the-wall proclivities!
Charber, the discussion thread is about slowing down the consumption of petroleum derived fuels such as gasoline and diesel, so as to benefit the environment, the US balance of payments, and slowing global warming, as well as leaving some for our grandchildren.
Agree that oil leaking from cars is an environmental problem; in Europe there are stiff fines for this kind of things, and cars are much better maintained. All acrs also have an annual inspection to catch such things.
If you think minimum wage keeps workers from being exploited, think again. You are dreaming! The companies have to raise the product prices to get the money to pay the minimum wage. So the worker still can’t buy any more. And some employers have to cut jobs to pay the other employees the higher wage.
Did you think a minimum-wage fairy would magically produce more money to pay the workers?
Put the blame where it belongs: Government is taking 72 percent of the total economy in high taxes! That’s why nobody can afford anything.
And these two idiots want to give government more money to waste!
The Market is a far better allocator of resources than is Government. The new auto market is by far loaded to more energy efficient vehicles. Customers want them now when they wanted bigger and less efficient a few years ago. Left over are the designs of 5 years ago now coming to market with declining buyers. Detroit mismanaged their products and the unions extracted far more than a competitive buisness can sustain. Clearly seen 20 years ago by Honda and Toyota.
A surcharge on gasoline has zero, repeat zero chance of Congressional approval.
Alternatives to increasing the gasoline tax:
Ration 18 gallons of gasoline per car per month. The WWII A sticker.
Impose the Double Nickel. Drag is proportional to speed squared. Force fuel efficient speeds on consumers.
“And so, my fellow Americans: ask not what your country can do for you - ask what you can do for your country.”
Is my check in the mail?
As for Iraq:
USA is a guarantor of Israeli security since the late 40’s. Several Presidents and many Congresses. Theoretically they represented the will of the People. The ME became our burden.
The People have abused cheap gasoline. Consumption with little constraint. It’s our “right”. We funded Al Qaeda at the pump.
Might help the world if Muslim nations made it to the 20th Century.
Ray has been dipping into the Shameless Commerce till a lot, I guess.
It’s tough at the bottom, Ray. We don’t need another idea from the Al Gore-Antoinette School For Dealing With the Great Unwashed.
And the profits from this scheme go to the Government? To be repaid @ 33 cents on the dollar like Education & Welfare? Fooey!
Attack the abusers, not those of us who make an effort!
Such as…Try forcing auto manufacturers to put premium-fuel-only engines in low-efficiency vehicles (<20 mpg) and then charge $6 a gallon for THAT! Leave Regular alone.
and…require transponders on these maniaical trucks that barrel down the road @ 80+ mph. Talk about fuel waste! And fine the daylights out of these jerks if they cover the distance between weigh stations @ high speeds.
It would be a start.
Extremely little, but 90% of the world’s heroin comes from there. farmer s depend on growing poppies for their livelihood. If we can make them produce all the world’s MEDICAL HEROIN, we can outdo Al Qaeda.
I don’t know how to break this to you knuckleheads, but Europe has had confiscatory gasoline taxes for decades. None of the things you predict for this tax have come true in Europe. In spite of the fact that they pay the equivalent of $8 to $10 per US gallon, the freeways are jammed and there are plenty of SUVs there. What is guaranteed to happen is that the slackers that populate our government will have more of our hard-earned money to squander, just like they do in Europe. So, if that’s your objective, great idea!
Alternatives to increasing the gasoline tax:
I hope you offered these tongue in cheek.
Ration 18 gallons of gasoline per car per month. The WWII A sticker.
This would get me to work 12 days a month with nothing left for personal errands. Don’t suggest public transportation. The nearest bus stop is 3 miles from my home. At the other end, the nearest bus stop is half a mile from work. As near as I can tell from the confusing bus schedule, the first bus in the morning does not run early enough to get me to work on time. If rationing were to be imposed (which I do not expect), I would retire and, to use a 1960s expression, drop out of society.
Impose the Double Nickel. Drag is proportional to speed squared. Force fuel efficient speeds on consumers.
This scares me. Good luck and a state-of-the-art radar detector got me through the last national speed limit unscathed. However, I don’t want to repeat the experience and, given current enforcement technology, I might not be able to. If idiot level speed limits are reimposed, I have already decided to dump the Infiniti I bought new a few months ago, retire and stay home.
“And so, my fellow Americans: ask not what your country can do for you - ask what you can do for your country.”
Don’t holding a job, living within your means and saving for retirement count?
Is my check in the mail?
The only checks I need are my pay check, income from my savings and the Social Security to which I have contributed all my working life.
USA is a guarantor of Israeli security since the late 40’s. Several Presidents and many Congresses. Theoretically they represented the will of the People. The ME became our burden.
The modern Middle East mess dates back to the end of World War One when Britain and France redrew national borders with no consideration for the ethnic groups that were either pushed together or split apart.
The People have abused cheap gasoline. Consumption with little constraint. It’s our “right”. We funded Al Qaeda at the pump.
I get really tired of people who believe it’s OK to earn money, but not to spend it for your own purposes. Al Qaeda is so cheap to run that they don’t need oil revenues to survive.
Might help the world if Muslim nations made it to the 20th Century.
Several of them are making great progress. Ironically, Iran is the best example. The general population is progressive but are being held down by handful of aging religous fanatics.
Ray, you might be on to something. I would change your proposal a little though. Let’s just say that gas is selling for $2.899. Reduce the price to $2.399 and then add $.50. Then you have your $.50 per gallon tax and us little people don’t get soaked for any additional cost for getting around in our flivers. Whadaya think?
Dear Ray,
I think the lubricants you’ve been around all your life have soaked into your brain and let it slide out without you realizing it!!! A $3.00 a gallon gas tax in six years? Are you crazy?
Your “modest” proposal is anything but. It hurts those who can afford such a tax the most. Let me give you an example why; let’s say I’m the knucklehead that buys that shiny new Chevroford Subnavahummer that gets 8 miles to a gallon. 3 years later, I decide to dump it because of your tax. Mrs Anita Carr comes along looking for wheels to match her less than modest income. The gleaming guzzler is a fraction of the cost of the now inflated prices of even a used Toyhondai Sipper. She can’t afford the payments on the Sipper, and buys the Subnavahummer. The guzzle bucket stays on the road, and Anita stays broke either way.
Why penalize consumers rather than incentivize them? Why not continue, in fact increase subsidies to purchase more fuel effecient cars? We give incentives to not pollute, and not grow certain crops, why should we allow the Government to take from all of us what they gladly give to a select few special interests?
Besides; that $3.00 a gallon tax you propose would raise billions that would be more likely diverted to buy bombs than to develop biofuel. The Government is NOT a good steward of our money…why give them more of it than we have to?
As much as it is painful for me to agree on this, this is a great idea. Its not a new idea, a famous contributing NYT economists has been a champion for it for a while. Our consumption of oil is way too high, all of our oil money flows to enrich and empower our enemies. Also, the price of gas increases every year as well and according to most recent publicly available estimates will double, especially as demand from India, China and other developing countries increases. We, as americans, don’t seem to get the message and keep on buying the largest and most inefficient cars and trucks. We pay to Saudi, Iran, Venezuela, Russia and other states that want to destroy us. We keep on paying them more and more, so why not pay ourselves and make ourselves stronger and diminish our reliance on our enemies. If we do nothing, we will still end up paying amounts that are probably even greater than anything with the proposed gas tax. We all are paying for it already, might as well pay it to ourselves and invest in alternative fuel research, improve our infrastructure and strenghten the economy.
Bottom line, you cannot escape it, it will be $6 per gallon, either wiht the markup going to saudi or another OPEC friend or to fix our country
Agree! At some stage the free market does not deliver the right results. At such a time government intervention is needed to shift the direction and set new rules. After those new rules are implemented, private enterprise can do its best to produce goods and services at the best prices and quality.
The Japanes government did this in the fifties, identifying cameras, radios, and other high value added goods as export items. The set the inspection level for cameras to ensure they could compete with German goos. Then followed TVs, and later cars. The rest is history.