Don’t like the idea. My wife drives a Chevy Suburban, smallest engine available. According to TerraPass it generates 17,000 lbs of CO2 annually. A Toyota Preius generates 5,0000. But when you figure our 3 kids, my wife, the large dog and occasionally me, that is at least 17,000 divided by 4 or less than any latte liberal driving a Prius all by themselves, which is what you normally see.
I was in your court until my wife until children were returning from a Montana trip this past summer. I was here in Michigan finishing a college class and got the phone call. They had been in an accident. Rearended by a Dodge Dakota. That is a small truck but it totaled the 03 Chevy Venture. I spend 20 years in the Army and know there isn’t alot that can hurt a tank so I bought one. 05 Dodge Durango, 4 X 4.
I remember buying a Chevy Sprint back in 88 and getting 50+ miles to the gallon, now I get 17.2 consistently. My families safety is worth it.
I agree we should do more to reduce the gasoline consumption but don’t you think a change in CAFE standards would have the same effect without killing the average consumer?
Thanks for your time,
Love your show,
When my wife lets me listen (she just rolls her eyes when I tune in Saturday mornings) I actually use portions of it in my automotive class.
Tom Lowe
U.S. Army Retired
Automotive Instructor
Calhoun Area Career Center
Battle Creek Michigan
I believe the most accurate understanding of free markets is that they do SOME things remarkably well; in other situations they may get to the right answer eventually, but at a HUGE cost. Fossil fuels falls into the latter. It’s easy to understand when you think about where most dollars go when oil hits $100, then $200 a barrel – the petro-states closely associated with forces and ideas opposed to free markets and free anything else. You can turn this over to free markets all by themselves, but you won’t like the result. I am 100% in favor of Ray’s proposal, and history will show it is indeed “modest.”
Ray,
This is exactly the kind of problem that the government is good at solving and it’s a good idea that should have been implemented decades ago - Dick Cheney even proposed the same idea at one time. You have probably discovered by now, as Cheney did, that this idea will never fly in the good ole USA.
The reality is that if this idea had been implemented in the 1970s or 1980s, gas would be substantially cheaper now, there would be less pollution, other taxes would be lower, and our infrastructure would be in better condition. We would basically have diverted part of the income stream that has gone straight to middle eastern countries back to our own use.
I would also suggest that we start to segregate freeway lanes by weight and speed. Reserve half of the lanes for vehicles that weigh over 2500 lbs or that want to go over 50 mph. Reserve the other half for vehicles that weigh less than 2500 lbs and that are willing to limit their speed to 50 mph. This is another good idea that will never happen because the majority of Americans seem to have become incapable of making decisions that are in their long-term interest.
One more thing - do a web search for the ‘Dust to Dust’ report. After reading it, I concluded that the old Volkswagen beetle was the most energy efficient car made in my lifetime.
I think a graduated gasoline tax is absolutely the way to go. Ray: your tax starts quick and is steep. But it would spur fast change. This idea needs to be discussed!
As good Capitalists, we have been taught to let price control demand. But in the case of oil and other resources with limited supplies, this means that eventually only the rich will be able to enjoy the benefits these resources provide – Caddyman
A high price doesn’t mean that only the rich will be able to enjoy it, it means that only those who have a use for the resource that is as valuable as the resource itself will consume it. If the price of the resource is artificially low, then the only way to limit the quantity demanded is to ration it. That allocates in such a way that some people with an urgent need (who therefore would have paid a high price) will not get it while others whose need is less urgent (and therefore wouldn’t have paid the high price) do get it. Letting price control the quantity consumed is the only way to distribute it so that people use gasoline instead of some alternative only when the cost/benefit of using the gasoline is more advantageous than the cost/benefit of the alternatives.
even though the raw product belongs to all of us…
No, it doesn’t. It belongs to the particular people who own it. We have legal processes that determine who owns mineral rights, they are not owned in common.
Nor would common ownership be a good idea. Things that are owned in common tend to be either hoarded or squandered because the people who control it (who are generally not the common people) don’t realize any personal gain or loss from using these things wisely or unwisely. Things that are privately owned are more likely to be used prudently.
As oil becomes more scarce, a government’s response will be to use public money and power to subsidize its use, but a private owner will be more likely to want to hoard it, saving oil for later generations. Consider, for example, the political response to high gas prices after Katrina, when supply was cut by a few percent and it took a huge increase in price to convince consumers to cut back their use. The political response was not to attack the consumers, whose wasteful habits were driving up the price, but to attack the oil companies, for not providing gasoline cheaply enough that consumers wouldn’t face any consequences for their failure to conserve.
Keep raising the gas tax! Global warming will kill my stocks$$$$$$$$$$$ Short term pain long term gain chaching!!!
My largest investment is also in Dow Chemical they use oil in there products. I need them to have oil to make me money!!! Tax gas!!!
Ray,
Can we really trust the government with more tax money? Please encumber yourself, however briefly, with that thought process.
As much as we need to reduce our dependence on foreign oil, until we can trust our government to do the right thing? How can you ever think more taxes are going to help?
This will only seriously hurt those who already cannot afford gas.
Wee need to think where we are sending our fuel dollars.
IT IS TIME FOR THE WOOD POWERED HYBRID ELECTRIC CAR!! MAINE IS THE NEW SAUDI ARABIA.
Sheik Tom of Searsport, Maine
i travel over 1,000 miles a week. and i get about 34 miles to the gallon. that .50 cents will hurt at fill up. it is what it is i guess.
The only problem with Ray’s Modest Proposal is that it is too modest, considering that the total social costs of a gallon of automobile fuel are estimated at between $12 and $20, $6 is far too little. But, yes, it’s a start. As for the ignoramuses who suggest we should trust the market; the problem is that the market doesn’t work the way neoclassical economists like to think. The subsidies for cars and petroleum are over $10 per gallon, so a $3.00 tax doesn’t even begin to address the economically inefficient subsidies to this socially inefficient means of mass transit. But, hey, it’s one of the best modest proposals I’ve heard in a long time. Thanks, Ray!
to quote you talking to your brother… “are you nuts?”
-
giving more money to Washington is as smart as pouring more money into some of his cars… sometimes you just to realize that old, worn-out things need to be traded in for something new and dependable… Washington has proved beyond anyone’s capability to understand that if you send them a dollar, they will spend TWO dollars. So let’s get a new vehicle for Washington that says… “we aren’t sending you more money… make it work with what you have, even if it means that you have to serve hot-dogs for dinner like Eleanor Roosevelt did” (check it out… she did, during the depression…)
-
it’s not soccer mom’s in SUV’s that consume the majority of the gasoline… it is commercial vehicle use. so adding a tax to gasoline is giving a double-whammy to the public…
a. so you add ANY amount of additional gasoline tax (by the time the Senate gets done with this, it will ultimately apply to diesel, so this is fair…). Trucks delivering your FOOD to Homeland pay MORE for fuel, that cost is passed on to the grocery store, who passes it on to US (the wonderful citizens of the United States…)… SO… we pay more to get to work in the form of gasoline taxes and guess what? OUR GROCERY BILL GOES UP AS WELL!
b. how many gasoline powered vehicles does your electricy provider have? all of them… guess what? we pay more to get to work in the form of gasoline taxes and guess what? OUR
ELECTRIC BILL GOES UP AS WELL! as does your NATURAL GAS, CITY UTILITIES and i know its a luxery… but you CABLE TV BILL!c. and you are absolutely going to LOVE this one… you see, like you… i am self employed… have my own engineering consulting business… SO… you and i both are going to have our gasoline expenses go up, and we are going to pass that increase on to our customers… we HAVE to… we incurred the expense in order to provide a service to them! SO… we should be able to recoup that expense…
BUT… oh man… you are going to love this… that additional gasoline expense is…
i can hear you right now… you figured it out and i havent even got there…
that additional gasoline expense is TAX DEDUCTABLE!
SO… can we recap real quick?
- everyone pays more in additional gasoline tax
- Washington says…“HEY! LOOK GUYS! we have a dedicated source of revenue to fix roads and built bridges in Alaska that go nowhere! we dont have to pay that out of the general budget anymore and we can build more bridges that go to nowhere in… Death Valley, CA!”
- the average citizen pays more for groceries, utilities, cable TV and… yeah… NPR radio before its all over…
- then… we business people that drive HUNDREDS of miles every day… we DEDUCT that additonal expenses from our incomes!
sorry… to me its sounds like you fell for the emotional hysteria and then Stumped the Chump on this one… you are usually right on, but please… think this one over?
Mike
Ray…why use negative tax policy to control behavior. When I taught, positive incentives aleays worked better. Rebates on more efficient cars. Auto manfacture tax incentives to produce more fuel efficient cars and inovative ideas to produce alternate energy source.
And a big reward for the first guy that gives you a wack on the head for that bone head idea.
Silly Libertarian.
Dr. Lapin, thanks for pointing out the fact that every item has an internal and external economic cost. The total cost to society of having automboles is huge; so taxes to recoup some of these costs and channel money into rapid transit, alternate energy sources and new propulsion technology make sense.
Even without these external costs, there would be good reason to reduce gas consumption, since the country simply can’t afford these oil imports any longer.
I would prefer to let industry do this development with government incentives and direction. I’m sure American ingenuity is up to the task.
The next president will not to likey be married to the energy industry and can hopefully create a rational policy that is good for all citizens.
Trying to save the US auto industry is a lost cause, since it is the architect of its own destruction.
I agree w/you but I think it shouldn?t be so modest. I think we should raise it by $1 this year, then 75-cents…then in 3 years for it level at 50-cents. In 3 years, the tax would be at $2.25. After that, it needs to be studied, if we can maintain the tax there or raise it again. I think 50% should go to the state, and 50% to the federal government. But that tax increase goes to infrastructure, public transportation (nationwide i.e. rail system, bus, etc) and renewable. The information on how the tax is being used should be public (over the web).
Raising the tax would serve a couple of purposes…It will lower demand, people will conserve and it will increases jobs.
We as a nation have one of the cheapest gases in the developed world. Also due to inflation, we are not paying that much compared to previous generations. The problem is that income has not kept pace w/inflation.
Actually an oil man, I forget his name, also believes in a tax increase. He believes in killing the demand because production is not sustainable. He talks about it in a Playboy interview. I forget which month.
-You don’t want gov. interfering with oil supply? guess what
-You don’t want to pay $6/gal? Be more than that if we do nothing and let free market oil companies have their way.
-High gas taxes will ruin our economy- right, lets not talk about the effect of spending several hundred million a day in Iraq
-You want to drive the big gas guzzler and let CAFE standards fix the problem? what do you think CAFE standards will do to your gas guzzler?
-Countries that won’t sell us their oil for cheap are the problem??? The US has 5% of the worlds oil reserves and uses 20-25% of the worlds oil
-No viable alternative fuels-check out the movie “who killed the eletric car?” Even producing electricity from dirty coal fired plants is cleaner than the internal combustion engine
-Put your blinders on and stay the course, your kids are going pay!!!
How about adding a new twist. Add 50? or what ever each year but if the consumption of gas goes up say over 3% then add 75? over 6% add $1.00 Then if it decreases by 3% then make the increase only 25? by 6% then 0 increase a 10% decrease would decrease the tax.
We need to be careful not to create economic hurdles the neediest cannot get over. But for where I live, $6.00 would actually be too low to even influence daily driving decisions, let alone car buying decisions. So I don’t believe “conservation” would necessarily follow. I suggest we stop selling gasoline by the gallon. Sell it by the quart (or liter) as it is sold elsewhere in the world. Right now, Germans pay about $2.15 per liter, which comes out to something over $8 per gallon. I look at th Smart fortwo purpose-built commuter car as a possible extra car, but the arithmetic of purchase, financing, insurance, maintainence, and the current low cost of fuel keep making it a no-win situation. As part of the overall cost of ownership, fuel cost is still relatively insignificant.
Something over $8.00 per gallon, however, would tip the balance. Right now, my 28 miles per day out and back commute costs me $6 in fuel, or about $1200 per year based on 200 days of driving, $3 per gallon and 14 mpg. A Smart fortwo would cut the fuel cost by about $800. But the other costs of ownership trump that, so I’m at a net loss. At $8 per gallon, my yearly fuel costs for my daily commute right now would be $3200. I think a Smart fortwo would save maybe $2000 based on better fuel economy. Annual savings like hat would cover the annual cost of insurance and maintenance and even a little of the purchase price.