Fortune Magazine’s Allan Sloan writes that “It’s Time to Raise the Gas Tax.” And he’s right. Many people blame Detroit for not putting more money and effort into developing more fuel-efficient cars. Some have suggested that Detroit should promise to develop high-efficiency cars as a condition for getting any bailout money. But it has never made sense to force Detroit, through Corporate Average Fuel Economy (CAFE) or other legislation, to develop more fuel-efficient vehicles. Why not? Because it never makes financial sense to put money into developing products that consumers aren’t demanding. Maybe they’ll demand them in the future, if and when fuel prices spike? Businesses prefer products for which there is a more certain demand. There’s only one proven way to get manufacturers to develop fuel-efficient vehicles: raise fuel prices to the point that consumers naturally demand these vehicles, and then keep them there. This is what worked for Europe and Japan. And it’s what would work here, in the U.S.
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The problem isn’t all with future products, but current ones. As we’ve witnessed already, it’s not feasable or cost-effective for people to dump their current rides that easily.
And what about the contractor/utility users, and semis? They were the first to get hit. They do have a need for power/workhorse engines.
Europe and Japan already have excellent mass transportation in place. We may regret the fact that the size of America and the national highway system of stood in the way of investing in such a system, but the fact is, it is not in place.
Instead of a fixed tax increase, possibly a tax that would guarantee a price of no less than “X” dollars/gallon might work. The difference between the actual cost of gas and the guaranteed minimum selling price would have to be dedicated (with no BS money grabs) toward subsidizing mass transit for the ENTIRE country.
And what about the contractor/utility users, and semis? They were the first to get hit. They do have a need for power/workhorse engines.
Question: how do European contractors manage to get by with Piaggio Apes, Renault Kangoos or Mercedes Sprinters but North Americans need F-350 Super Duties? And, last I checked, Scania, MAN, Volvo, Mercedes and the like still sell big rigs, so somehow they’re managing.
There was a story a few days back about sustainable urban development and how the car industry affects it. Perhaps if we planned communities a little more sensibly we wouldn’t need to drive everywhere, and wouldn’t have an oversupply of contractors building throwaway homes in the thousands? A gas tax would be a good way to force this kind of effort.
Yes, it would hurt, but it would also help encourage sane development and sustainable resource usage, both of which are sorely lacking.
Totally agree.
Higher gas prices are the only PROVEN method for reducing consumption (see this summer).
All the CAFE rules did was make it cheaper for people to have longer commutes, contributing further to sprawl.
A floating tax, or some sort of penny-per month increase for a few years, with the $$ going towards infrastructure or battery technology is easily the best approach.
But what Congressman would EVER vote for this? It’s much easier to pass convoluted legislation against faceless corporations and claim that you did it for the people.
Here is Soviet Canuckistan, we have always paid more for gas than our American cousins have. Take a ride up here and see what you see. We have fleets of Fits, cabals of Corollas and and scads of Civics. Go into any of our three major urban areas (quiz time, what are they?)and hardly and SUV will be seen. The price of gas directly affects what consumers buy.
I live the the permanently snowbound city of Vancouver. We don’t have a freeway here. Parking is outrageously expensive. A full fifty percent of the trips into the city centre are not by private car. Thirty percent are by transit and twenty percent by people who actually live where they work, and walk.
Or, more accurately, they showshoe or ski.
Works for me…as Peggy Joseph said “Obama gonna pay my gas and my mortgage”….so I’m not affected.
what about the contractor/utility users, and semis?
Well, where I am right now its about $1.80/gal for gas and about $2.50 gal for diesel.
You could tax Gasoline more than diesel and it wouldn’t affect the truckers.
Personally I’d like to see a tax that automatically kicks in when the pump price is under some limit (maybe $3 a gallon) and automatically is suspended when gas hits another limit (say $4 a gallon).
I’d rather not see bailouts of the 2.x but if it is going to happen I’d rather the money come from idiots that don’t know how to conserve fuel than from my income taxes.
I’m all for it, and have advocated it for a long time. Yes, it would hurt in the short term, but it’s the solution to a whole host of problems in the medium term.
Even contractors generally don’t need full-size pick-ups, or those pick-ups would work fine with diesel 6-cyl. How do you think European contractors do?
Tell me about a tax increase where funds were allegedly earmarked for a particular cause and actually spent on said cause?
I think the main reason small cars are so popular in Europe and Japan are space restrictions. The average town there has grown historically and hence there’s just not a lot of room…narrow streets and not a lot of parking space.
Also, lets not forget that gas hasn’t been taxed because of higher motives, but because they wanted to make money.
Anyway, GM and Ford also compete in Europe, so technically, they should have had the same incentives and technologies.
Sorry, premature submission…
Rather than taking money out of people’s pockets on this, offer tax incentives for cars with x mpg above 30. Take the $25B that was going to be thrown down the toilet by throwing at the D3 for retooling and give it to consumers in the form of tax credits. $25B divided by a 3k/car average is over 8 million car buyers eligible.
Not bad.
Why stop at a gas tax? Make a list of everything that’s wrong with the country and tax the hell out of it. Obviously we can’t be trusted with our own money or personal choices. Welcome to The New World Order comrades.
Tell me about a tax increase where funds were allegedly earmarked for a particular cause and actually spent on said cause?
Does it matter what they are earmarked for? We already know military operations and financial bailouts will eat big slices of the pie.
What percentage of the 2009 budget will the $700 billion+ bailouts be? If the budget is a deficit budget how much more interest will be incurred on top of the cost they are mentioning now?
I don’t know how it works in construction, but in truck transportation contracts are a base rate of $X per mile or per hour and a fuel surcharge that tracks the price of diesel. At its peak last spring the surcharge was 25-30%.
A price floor of $3/gal gas and $4/gal diesel would be effective. Proceeds could go into mass transit and Amtrack. As long as we are day dreaming drop the tariff on ethanol, and exempt bio-fuels from the price floor.
An alternative plan would be a tax levied on new vehicles based upon engine displacement and/or vehicle weight. Rather than have consumers try to guestimate what their gas cost over the life of the vehicles will be, its all right there up front with the tax.
Anything over 3000lbs or 2L displacement gets taxed. Anything over 4500lbs or 4L gets really taxed. You can get a decent sized minivan or CUV for that. Heck for a Jeep Wrangler tips the scales at 4300lbs for the few people who actually leave the pavement.
But what Congressman would EVER vote for this? It’s much easier to pass convoluted legislation against faceless corporations and claim that you did it for the people.
Or tell them hydrogen/cellulosic ethanol/pixie dust will save them.
Yeah, the underlying problem is a shortage of leadership in Washington DC. Mr. Obama the table is set for a big helping of leadership. The ball is in your court…
Well, Johnny Canada, the scales fell off my eyes here in Amerika on October 3rd when our Con-gress changed tack in less than a week (and lost their spine in the process), when they voted in the biggest Nazi-type (national socialist) deal the world has ever seen.
It’s when a supposed .85 Trillion dollars (and in fact, it’ll be multiple trillions of taxpayers dollars before it’s over) was handed over to the banking classes to bail them out for poor decision making on the part of the Con-gress (forcing bankers to lend to dead-beats or they would get no money from the Fed) and poor decision making/greed BY the bankers (removing anything resembling oversight on loan eligibility, stiffing folks with variable rate mortgages, balloon mortgages, etc. instead of being upright and righteous). Yeah, I know an upright and righteous banker is impossible….
So now we have privatized profits (all for the mega-wealthy) and socialized losses (all paid for by the masses).
So of course, since the bankers and an insurance company managed to accomplish this bail out for themselves, the question asked within days of all of this (after seeing multiple other companies snuffling for truffles/looking for Uncle Sam’s teat) – where does this stop? Where does Uncle Sam draw the line and say “you don’t survive – you do – you don’t”?
Clearly, Con-gress opened a pandora’s box and cannot close it now, until they’ve turned the last (very remotely so) bastion of free enterprise in the world into a new Nazi regime.
Yeah, I know that China is actually more free enterprise than the states is right now. But being (relatively) free in business is not so great when you aren’t free to be fully human and are a slave of the state.
I’ve been preaching this same thing lately…especially with the collapse in recent gas prices and the collapse in government revenues from real estate, sales tax, capital gains, etc.
Some fuzzy math here (you need a big calculator screen to get all those numbers in). Add $0.20 per gallon to the federal gas tax. Think 150 million cars, 12,000 miles/year, 20 mpg. That is 90 billion gallons of gas, or 18 billion dollars. That is where you can start to raise the infrastructure dollars needed; whether they be for improving roadways/bridges or mass transit, as we are going to eventually need both. These tax funds should be put directly towards transportation.
Someone who knows what the current federal tax is, as well as the amount of cars on the road, average mileage, mpg, etc. could calculate much more accurate figures.
“Offer tax incentives for cars with x mpg above 30. Take the $25B and give it to consumers in the form of tax credits.” -jkross22
The reason this will be less effective is that unless people think that current gas hogs are over priced they will continue to buy them. The trade-off between a $40K SUV and a $25K – $5K Prius is a non-starter. Fuel efficient cars have always been cheaper to buy new than gas hogs, yet people still buy the SUVs.
I agree whole-heartedly with the call for a national gas tax. $0.01 per month increase for a decade would do it. Earmarking the money is another thing. It would be great to pump that money straight into alternative energy funding. However, I won’t let the lack of that string prevent me from supporting the gas tax.
Boy, are there some idiots out there.
So we pay more and get less. Guess what? China buys the oil at a lower price and uses more. Same oil gets used either way, except we get a shit sandwich and somebody else gets a free ride.
There was a study out that suggested the “optimal” federal gas tax was about $1 a gallon.
You would need a phase-in to deal with older cars. Most people only keep cars 5 years. Besides, even a 20 year old car (1988) gets fairly decent mileage — anything that was built after fuel injectors came on the scene in going to get over 20.
The real question is do you want to burden the american consumer when he/she is already down — and driving the world into a depression. The adjustments the consumer made at $4 gas were stop driving large SUVs around (under 10 MPG in many cases) and marginal decreases in driving (20-30 miles a month). Those changes were enough to move 1 million b/d of oil elswwhere, which opened the delta between supply/demand and moved the price down. However, even gas at $4 didn’t push us into Euro-style living.
@dhanson865 :
“Does it matter what they are earmarked for?”
Yes, it’s our money.
Gas tax dollars were supposedly earmarked for building roads, bridges, MAINTENANCE, etc., but where is that money being spent?
According to this link:
the US consumes 390 million gallons of gas/day. The fed gas tax now is 18.4 cents/gallon. That means the Feds take in nearly $72M/day in gas tax. I think that’s just over $26B/year. How much of this is actually spent on it’s intended causes?
Michael is absolutely correct. We need higher gas taxes. The only way to get people to drive less is to hit them on a per-mile basis. If the market will bear $4.00 per gallon gas, it is better for $2.00 of it to go to OPEC & the oil companies and $2.00 to the US Treasury than for $3.50 for OPEC and the oil companies and $.50 for the treasury.
The problem is the lack of political support. I’m convinced that the reason Al Gore did not run for President is that he had endorsed the idea of a carbon tax (of which a gasoline tax is a part), and he knew he couldn’t get elected dogcatcher with that position. If Al Gore would have been elected (er, sworn in) 8 years ago, we would have had 8 years to phase in a gas tax. Today’s prices would probably be around $4.00 per gallon, but would have been predictable and stable, and the majority of the money would not be going overseas. We would have had billions of dollars to use on energy efficiency measures.
Completely agree. If you want to avoid a harsh hit to those temporarily unable to modify their transit options, use part of the money raised from the new tax as a reverse income tax rebate to purchase new transportation (either in the form of mass transit or more fuel efficient vehicles).
Data from Ward’s Auto:
There are about 250 million cars and trucks in the US.
About 16 million new cars and trucks are sold each year.
About 40 million used cars and trucks change hands.
About 12 million cars and trucks are retired from the US fleet each year.
So CAFE only impacts about 6% of the cars in the US each year. The cars that are retired are not necessarily the oldest or least efficient; new cars also get totalled. The CAFE-compliant new cars are often replacing efficient nearly-new cars.
With cheap oil, CAFE places a huge burden on manufacturers to build cars the public does not want. Some carmakers, like Mercedes choose to build the cars that people want and just pay the fines. If the government was serious about reducing pollution or using less oil, they would do something more substantial than CAFE.
Here in British Columbia, the government added a 2.5 cent per litre carbon tax last summer. You would think the world had ended by the uproar. You see, people are “green” when it suits them; it is fun to change your light bulbs and weather strip your door. Higher gas prices are a hit on lifestyle and that is a big threat.
The USA is addicted to foreign oil. To Canada’s detriment, it has to stop. If Obama actually tries, and I think he will, you will hear tales to the Apocalypse.
Take a ride up here and see what you see. We have fleets of Fits, cabals of Corollas and and scads of Civics.
And more Caravans than you can shake a stick at.
Obviously we can’t be trusted with our own money or personal choices.
There’s more truth to that statement than a lot of people would like to admit. People, as individuals and in the short term, are generally good, law-abiding and friendly. In large groups, it’s not quite so rosy: those same good people will choose to do some not particularly smart things that have very serious long-term consequences.
It’s a flaw in the free market: when there’s no immediate incentive and/or when the pain is so far away it’s effectively abstract, there’s no impetus to change. That’s where regulation and punitive taxation come in: you’re dissuading or encouraging a desired outcome now so as to avoid a catastrophic occurence in the future. I’ve said this before: market corrections happen, eventually, but they’re brutal (and yes, war is a “market correction”, so is people dying from pollution or famine).
Ever since I got my BA in Econ in ’96 – I’ve been saying this for years and years.
$4.00 gas – people generally buy small efficient cars and then say they wanted to do it b/c of green image and want to reduce our dependence on oil.
You see a trend? Make gas expensive people convince themselves to do the right thing (and it winds up becoming their decision). Use CAFE to force automakers who don’t care to make half ass attempts at economy cars won’t get people on board b/c they’ll to a competitor to buy the truck. In fact MFGRs tend to cheat the CAFE rule making 9mpg E85 SUVs that get worse gas mileage but on paper give them credits to offset a focus solely on truck/suv sales.
Golden Rule of Economics: You cannot change the demand by simply setting rules on the supply.
I agree entirely.
The whole premise of CAFE is flawed. You can’t get people to buy what they don’t want to buy any more than you can push on a rope. But you can change what they want to buy.
If gas costs more, people buy more efficient vehicles. You don’t have to go to Europe to see that. Here in the US, when gas hit $4 the sales of trucks and SUVs tanked. The sales leader was the Toyota Corolla instead of the F150.
If we want to increase the average mileage of the fleet, the most effective way to do that is with a gas tax.
CAFE is a farce. It needs to be completely eliminated. Raise the gas tax and use the proceeds to repair our infrastructure.
jaje: yes. It is basic microeconomics. As cost goes up, demand goes down. It is criminally stupid that our lawmakers are unable or unwilling to understand the price elasticity of gasoline demand.
“Obviously we can’t be trusted with our own money or personal choices.” No, people can be trusted to make choices based on economics. Large cars, with more space, are a luxury. If gas is cheap, then many people will buy large cars. If gas is expensive, people make a rational decision to buy more economical cars. If we want people to make different decisions, then change the economics.
Amen, brother Jared. Preach it.
As soon as the global economy pick up again, the oil prices will go through the roof again, so this will have the same effect as the gas tax.
Can someone explain to me why gasoline is so evil? This is the cheapest, most efficient, most abundant fuel for transportation ever known to man.
Even if you do believe that the Earth is warming by unnatural causes, the studies done on the impacts of wide-sweeping carbon squelching taxes give us little incentive to turn our economy on its head to address it.
The EPA, the kingpin of global warming hysteria, gives us this little nugget: “…a 60 percent reduction in CO2 emissions by 2050 will reduce CO2 concentrations by only 25 ppm in 2095. This reduction would affect world temperatures by 0.1 to 0.2 degrees C.”
So all this means is more out of the pockets of everyone just to fill the coffers of a few in government – for no environmental benefit.
We have to be the only civilization in history to voluntarily refuse to utilize valuable and abundant natural resources.
For those of you city dwellers – there are actually people that don’t live in urban areas, where the closes stores are 20 miles away.
They have to drive 100 miles a day to get to work and back so that they can pay the taxes that fund your beloved public transportation.
Jacob :
As soon as the global economy pick up again, the oil prices will go through the roof again, so this will have the same effect as the gas tax.
I have to disagree with this, because while increased oil prices would have the effect of reducing usage, which is good in my opinion, we would not see any infrastructure funding benefit without some kind of gas tax increase.
Gas taxes are pretty solid; some people oppose them on the grounds that they’re recessive and impact the poor more than the rich, which isn’t necessarily good, and others oppose them on the grounds that UNCLE SAM CAN GET OUTTA MY GOT-DERN WALLET!, but I support them wholeheartedly. A gas tax is the perfect “user fee” type of tax, those that use more fuel and impact the roads and environment more by driving more miles or driving heavier vehicles pay more for the privilege to do so regardless of class. It’s very equitable and near a libertarian flat-tax in that regard.
I have always supported increasing the gas tax, but I live in a town where a damn Interstate bridge fell down during rush hour (a tragedy that could have possibly been avoided with more funding for and attention to infrastructure) so maybe my view is skewed.
Basic economic theory says that a good will be overproduced and overconsumed unless the external costs of that good are internalized into the price of the good.
In the case of gasoline, all of the emissions are external costs. The costs of maintaining highways for the cars to drive on is an external cost. The costs of the wars over oil and the distorted foreign policy are external costs. It would take a fairly substantial gas tax to internalize these costs to get the price of oil at it’s most efficient level. This is actually basic free-market economics, not socialism.
Karesh, I had identical idea 4-5 years ago when prices went from $1.25/1.35 to $1.75/2.00. My idea was to raise gas tax $1 to $3 so there would be immediate production stoppage of SUVs. Unfortunately, market allow public opinion to get use to prices and until gas hit $3.50 SUV were build full speed. My colleagues in the office were adamant that $3 gas would devastate US economy. Actually even $4 didn’t, but banks did. I think, high tax forced Europeans into smaller fuel efficient vehicles and their soccer moms are managing their broods in Mazda 3 and Civic equivalent cars as successfully as US milfs in their Escalades.
I agree with the concept of higher gas taxes. It remains the only effective way, it seems, to get Americans to choose fuel-efficient vehicles. And I sure think it’s prudent to “burn less fuel” as we move along through the 21st Century.
My impression of federal and state gas taxes is that they’re probably the most “dedicated” funds you can find, and truly do get spent mostly on transportation projects. Furthermore, the federal gas tax, and many state taxes, haven’t been adjusted for anything over something like a decade or more — “how well would you be doing if you never had a pay increase over the past decade or more?” There is certainly plenty of work to fund with any extra money in the gas tax coffers.
In the end, I’d sure rather pay more for better public policy and transportation improvements, than go into more federal debt just to hand free money to bankers and financial types who appear to have been nothing much more than thieving crooks.
We have to be the only civilization in history to voluntarily refuse to utilize valuable and abundant natural resources.
And that would be a good thing. History is littered with examples of civilizations that pushed their ecosystems and/or economies beyond the point of sustainability.
Easter Island is the classical example, but not the only one.
Agree. raise the gas tax. Now’s the time.
I said it last time oil started going up, when CAFE was being debated, and I will say it again – a gas tax is the most economically efficient way to change producer and consumer behavior. A gas tax would also protect us from price spikes in the underlying commodity.
The key here is how you introduce the tax. People assume static models when they say “x people will be hurt” or “what about x industry”. If you gradually phase in the tax ($0.15-0.20/year or so) so that people have time to reshape their habits. In the meantime, people will be investing in other forms of fuel that will be exempt from the tax (celluosic ethanol is a tech I’m thinking about – corn ethanol should get double the tax) that will also lower our demand for oil. Eventually, the tax revenues will decline, but that’s fine as long as it’s modeled for in spending.
Bring on the gas tax. High gases did more to push the automakers to design even more fuel-efficient vehicles than any CAFE law ever could.
Easter Island was afflicted with deforestation. You don’t have to cut any trees down to drill a hole in the ground.
You will, however, have to severly alter the Earth through deforestation, etc., to construct acres upon acres of windmills and solar panels – square mile after square mile of windmills and solar panels that will be necessary to switch from oil-based to electricity-based transportation (seeing as coal, nuclear, and hydro are also on the greenie hit list).
Why stop at just a sissy little gas tax? How about anyone with an SUV or a pickup have to pay double, no triple the yearly registration costs and the money could go into planting trees and educating children about how man is destroying the Earth? We could also have a “Turn In Your SUV” day and we’ll give you a bicycle! I bet George Soros would fund it! Even better… how about ban the number of days you can actually drive an SUV? Maybe even impose jail time should you get caught driving on an off day?!
Okay, that was just a joke, although I bet some of you are thinking, “Oh that will save the Earth for sure!”
Really, it is funny how those that love a good tax increase for the benefit of mankind would never go to their neighbors and take the money, but they’ll instead have the government do it. That is why we have elections right! (sigh)
Easter Island was afflicted with deforestation. You don’t have to cut any trees down to drill a hole in the ground.
You will, however, have to severly alter the Earth through deforestation, etc., to construct acres upon acres of windmills and solar panels – square mile after square mile of windmills and solar panels that will be necessary to switch from oil-based to electricity-based transportation (seeing as coal, nuclear, and hydro are also on the greenie hit list).
Nice reductio ad absurdum, there.
You’re picking apart the specific but completely ignoring the general point: using resources in an unsustainable manner is a bad thing. Eventually you’ll either run out and/or damage the ecosystem in the process. It doesn’t matter if the resource is trees, fish, farmland, air, oil, dilithium crystals or pixie dust: unsustainable exploitation of a critical resource is unequivocally a bad thing.
The solution is (wait for it!) use less.
I understand that Easter Island was a general point, and it probably was a bit narrow-sighted to debate that particular example (although I cannot translate you Latin).
However unsustainable oil may be, we will not be running out anytime soon – as in the next couple of centuries. There is no doubt that humans will be operating vehicles that will not need gasoline long before oil wells ever run dry.
The problem is that you all want it all and want it now. Let’s get a sense of perspective here.
Sounds like a good idea.
Though if you put up petrol prices tomorrow, why would I wait three years for GM’s fuel-efficient cars when I can buy a Honda Fit right now?
Michael, I completely agree with the headline, raising the gas tax in the current economic climate is insane. The last thing we need to do right now is to take more money from people and give it to the governement. I’m sure in the next four years we’ll have enough opportunities to ‘sacrifice’ for the common good via government without raising the gas tax.
I completely agree. People are morons and they can’t be trusted to make decisions for themselves, especially poor people. It is beyond time that we as a nation stop allowing the general populace live their lives without taking into consideration the crises we spend so much time and energy manufacturing. With this type of cost signal we can assure they live a life that is most like what we hypothetically live through our carbon credits and charitable donations. Also, lets face it, oil will eventually run out. Can we really afford to let those less fortunate than ourselves have access to it?
“Can someone explain to me why gasoline is so evil?”
The US started running out in 1970. In 1992 the US became a net importer. Since then we have been stealing money from our childrens’ piggybanks and handing it over to dictators so that we can keep on truckin’.
No amount of pseudo scientific BS will make that a fact Praxis.
I would to for the bailout if they would compromise and eliminate the income tax. Tax consumption, save the planet, get rid of ridiculous regs like CAFE.
We needed this tax in the 1950’s while our cities outside of the Northeast and Rustbelt and the suburbs everywhere were still developing around the idea of never ending cheap fuel and transportation.
It is never too late to try, but it kind of is too late now to be most effective.
Those proposing an increase in gasoline tax with a Democrat controlled congress are living in Oz. The President promised to plunder oil companies for unconscionable profits and rebating the loot to the faithful. A more likely event.
Michael Karesh is insane…
Yeah, to hell with inidividual rights. Put a 100% tax on anyone you don’t like, that’ll teach ’em. I want a mandatory I.Q. test and an 80% tax on everyone that scores below 50%, and no taxes for everyone else.
We need a constitutional ammendment. One that says that the people that support taxation have to pay 100% of the tax they support. Let the communists pay for themselves.
Oh man I have to put my 2 bits in on this one.
Working in Alberta’s oil sands I will see more oil moving than most here. There is a projected 100 years of oil here or 70…could be 120 years. We were not suppost to run out of buffalo. Why was that a suprise! Learning from past mistakes is what seperates us from all the other animals. If we know we are running out (and we do) act like it. The gas tax is a no brainer. In canada a large portion of our fuel cost is taxed. The last most important chunk of the problem is how that tax is collected and spent or you might as well let the consumer burn it all in there trucks and SUV’s
Can somebody please explain to me how it can be good and patriotic to hand millions of Dollars a day to dictatorships who hate America (and the rest of the modern world), just in order to drive a fatter (or faster) vehicle?
I don’t get it.
I understand the pros and cons of nuclear energy. I can even sympathize with those who say that coal is a possibility. But buying a scarce resource from the likes of Saudi Arabia? The only justification for that is that you really need your car for matters that benefit the greater good, like growing the economy. But why does the price of gas have to be low for that? What (unnamed) positive externalities outweigh the negatives?
If your neighbor was buying caviar from Persia or cigars from Cuba, would you accept his argument that he can damn well do whatever he likes, and that taxes on such products are evil?
Raising Gas Tax is a great idea. I had a big argument with some people about this a few years before on a different blog.
Back then what you heard is that “no it just hurts people – people have to drive to work and no one can change their ride”
That’s been proven to be hogwash. People are EXTRAORDINARILY sensitive to a gas prices. Thus tax will create real changes in behaviour (buses, car pools, buying more fuel efficent cars) and is far superior to the governments current way of solving the problem. People started dumping their SUVs even at COSTS of thousands of dollars just so they don’t have to pay so much in gas money.
Mandating higher mileage numbers just doesn’t work.
1) People actually drive MORE if they get more miles to the gallon. Thus any increases in mileage doesn’t really save fuel. People also will live farther away from where they work.
2) People will find loopholes around the mileage restrictions. That’s the whole deal with SUVs. They got around the mileage restrictions. In the beginning they were “work” vehicles believe it or not.
3) OPEC will manipulate prices to prevent any real demand shortages. I don’t think its surprising that just as GM and other car companies are on the verge of producing semi-affordable plug in hybrids gas prices are plummeting again. Those arab countries made their profits now they are going to lock up the market again..
We need a floating gas tax that would lock us in at like 4 bucks infation adjusted. Thus if gas prices rise – we should lower and even eliminate much of the gas tax.
The money should also be locked into road improvements not pork barrel legislation. The US wastes a ton of gas on gridlock.
Raising the gas tax would hit both sides – as gridlock would be improved because less people would be driving and better roads would be built.
We could reduce gas use a ton with some intelligent adjustment of the free market via gas taxes. It’s not any different that using pollution taxes on coal burning plants.. that’s the way to get real change not mandating changes via a central government (the CAFE standards).