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I’m no stranger to this ungodly hour. Having raised four daughters, I know why the early bird gets the worm: Lumbricus Terrestris hasn’t had time for a cup of coffee. Still, needs must. TTAC may have crested 1m viewers per month, but we’re still eyeball based. Our survival still depends on ad revenue. So we need to give as many potential readers as possible a “taste.” Hence the early hour. I’m about to get picked up by a local car service to take me to a radio station to argue against CAFE standards and for a gas tax. Should be fun. Tell all your friends! Well the ones with small children. Thanks. [click here to listen to the interview on WNYC Radio and Public Radio International’s “The Takeaway”]
42 Comments on “Farago on PRI’s “The Takeaway” at 6:06 AM EST: Raise the Gas Tax. If You Must...”
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Couldn’t agree more. Stop all road tolls, registration charges, car taxes etc etc and simply tax gas. It is directly proportional to miles driven, pollution produced and road use and it is also fair to rich and poor as rich tend to drive gas guzzlers and the poor smaller economical cars. It would also save millions in admin and would immediately make people think and buy more economical cars.
Good luck RF, the survival of the world is in your hands.
Hear! Hear! Gas tax is freedom tax!
Seriously, though… all this eco-nonsense has got to stop. Gasoline bought and consumed is equivalent to CO2 produced. In other words, people who buy hybrids ought not to get a tax break if they use them to drive 1,000,000 miles a year and raise global temperatures 0.0000001 degrees in the process. A flat gas tax taxes consumption directly, encourages conservation, and is fair to everyone.
Good luck!
If it gets rid of CAFE, I’m in.
Best of luck and agree with your position. Several of us have wanted for years now two things:
1) Simple flat tax on income so fairness exists and ambition and responsibility are rewarded. All citizens should equally pay into taxes
2) A gas tax which again promotes simplicity and fairness
If someone wants to drive a 1 ton 4×4 in the suburbs, fine, but let ’em pay the price for their largess. There will be those that argue that it will hurt business owners, true in the short term for some until they change their transportation and location choices.
Let’s also consider the “cost” of doing business the current and anticipated gov’t way…….what does it cost us taxpayers to run toll roads, manage CAFE, try to run private businesses, etc. etc. Set essential infrastructure laws and support in place and let the free market sort out the winners from the losers based upon their responsibilities, ambition and hard work.
Coffee’s on, Robert. Good luck!
Top o’ the morn’ to you.
My six year old and I will be listening tomorrow at 0’dark:30.
Being that I’m from the land of tea, civilisation and football (the REAL football), any chance you could upload your segment on TTAC? Or at least provide a link to download it? Or would you run into copyright issues?
P.S. I’m all for fuel tax and Fuel economy standards. Sorry.
has anybody considered the safety social impact of forced small car via fuel economy standards? Small cars in general do not survive as well in crashes as larger cars. To make a small car safer, you end up adding weight and additional safety controls, further reducing the fuel economy. I absolutely agree, fuel tax needs to increase. The other side to increasing fuel economy standards, lower taxes collected to support our roads, etc.
So what will the government do with the money from the gas tax?
They still need billions for their buddies in the UAW, and trillions for their buddies in the banking industry. So you all enjoy paying up.
I’m afraid about what a NPR listener considers to be their personal “Truth About Cars”.
Starts with “No blood for oil, man”.
Good luck though.
How about neither? Whatever happened to freedom and liberty?
cardeveloper :
May 19th, 2009 at 6:53 am
has anybody considered the safety social impact of forced small car via fuel economy standards?
This is another reason for nationalized healthcare.
Think of it as demand creation
bluecon :
May 19th, 2009 at 6:53 am
So what will the government do with the money from the gas tax?
To fund nationalized healthcare.
I totally agree with a gas tax and have advocated it for a long time as a simple, fair, and (yes!) capitalist way of dealing with fuel availability issues and the environmental impact of combustion engines. Oh, and it means less political intervention than the stupid CAFE.
Implementing high gas taxes has a lot in common with a flat tax. Unless all other related taxes are banned and eliminated it just piles on. No one seriously believes the other taxes and fees will be eliminated so this becomes just another feed for the government.
Enjoy the freedom to drive whatever whenever you want. There will be limits on this in the near future.
Well done, Robert. Politically incorrect as ever. Good show.
While I’m against taxes in general, I’m afraid you are right. Already high gas taxes have brought Europe the fuel efficient cars the market demands.
Furthermore, high gas taxes in Europe buffered gasoline prices from the extreme swings experienced in the U.S. And those who want to afford it can still drive their S-class.
To the “safety” argument: BS. Bigger cars are only safer if they crash into smaller cars. Physics. Small cars can be built extremely crashworthy, Europe has shown that. Fatal accidents in Germany, the land of no speed limit (in places of) the autobahn are at an all-time low.
Here here!!!
I’ve been arguing this point for years!!!
I will gladly pay $5.00 per gallon if, and only if, I knew that tax money would supplement a “useable” public transportation system in all major cities. Trust me… We have NOTHING like that here in the Detroit area.
A gas tax is indeed the only way to actually get people to change their behavior. It would generate infrastructure dollars and force the automakers to meet the market, rather than trying to change the federal requirements which are, as you said, always full of loopholes and BS. When gas is 4 bucks a gallon and people are clamoring for more efficient cars, there are no loopholes to be found and you have to give the people what they want.
The radio people seemed pretty thick on that point. They kept acting like you were some silly-billy who didn’t think there was any way to lower usage, though you clearly stated several times that a gas tax would lower usage. It was frustrating how they always threw back to you with, “so you think there’s nothing that can be done, that we should just throw our hands up?” That was not as insightful as I am accustomed to public radio hosts being.
Whatever though, at least it didn’t devolve into an ad-hominem insult party and anti-Detroit conspiracy theories, like Autoline did a while back. You did very well, you clearly articulated your position and maintained a steady demeanor in the face of word-twisting and hosts that refused to understand you. Good work. I really do believe that if you want people to come to your site, media appearances will drive traffic. Did you see a page-view spike after or during the appearance?
The notion that there is an ‘instead of’ or ‘replace’ involved in this issue is laughable. The only thing more laughable is the notion that the new revenues from any such tax would be used on needed infrastructure. Sorry, friends, but the future revenue from a higher gas tax has already been spent, and it wasn’t spent on roads.
“While I’m against taxes in general, I’m afraid you are right. Already high gas taxes have brought Europe the fuel efficient cars the market demands.”
As much as I respect you, Herr Schmitt, this statement makes no sense, at all.
What is should have said is this:
“While I’m against taxes in general, I’m afraid you are right. Already high gas taxes have FORCED Europe the fuel efficient cars IT NEEDS.”
If the market demanded fuel-sippers, then fuel taxes wouldn’t have made any difference, since it was market demand, not necessity, which made fuel-sippers more readily available.
P.S. I’d rather drive a Jaguar XJ, than an S-Class. Some of us rate Jaguars higher than German cars. ;O)
as a loyal democrat, this has to be one of obama’s dumbest moves ever.
Moving the bar to 35 for cars means diesels and subcompacts. I’m not sure hybrid technology can be scaled out for a mass market, but it would work as well.
I can’t afford a new S class, so I am not weeping for that. It is for the pure stupidity: if you want to lower fuel use through regulation, go after the SUVs and light trucks, not cars. Moving from 15 to 25 is much more efficient than moving from 30 to 35. Look at the new RAV4 — getting more people into that from a Ford Exhibitionism would be a victory.
Devil may be in the details: you can violate CAFE rules if you pay a fine. Right now that it worth it for small, niche high end cars. Would it be worth it for a v6?
Also, can you play with the mythical “combined” EPA mileage part — given that all the EPA numbers are imaginary there has to be some play.
Bertell, I was under the impression that both the EU and Japan have similar regimes to CAFE — or at least varying tax rates based on engine displacement.
The consumer does not look at CAFE rules when purchasing a car. Last summer it was obvious how the consumer responds to higher gas prices.
Gas taxes must be done, what they fund, I hope a train system on par with the third world since we do not even have that right now.
Frau Puckrik, correct as always.
It’s about numbers isn’t it? I thought the other guest was amusing when she said that there were at least 100 million cars. Well, she’s right, except it’s about 290 million cars. So she really hadn’t done her homework.
Second, if current vehicle sales in the US rebound to a level that is somewhere between “in the recession dumps” and “over-the-top salad days” numbers, then were looking at MAYBE 13.5 million vehicles per year in two years.
13.5 million out of 290 million.
Nope, that won’t affect oil consumption much.
And by the way, if high gasoline prices had caused the recession, then last autumn’s record low prices (when adjusted for inflation) would have pulled us out. But they didn’t. Fluctuating prices for gasoline are only a symptom of the recession, and not the cause.
So as much as I sometimes enjoy listening to “The Takeaway,” I wish they’d have picked a guest who was at least half as informed as Mr. Farago, but the fact is, it’s a complex issue and one that can’t be discussed in six minutes.
The ultimate question was, “Did last summer’s high prices for gasoline permanently change consumers’ future gasoline spending patterns?” If one looks at the history of gasoline prices adjusted for inflation, one would discover the answer is “Obvioiusly not in the past, so why would it in the future?”
as a loyal democrat, this has to be one of obama’s dumbest moves ever.
Obama would do well to remember that there are no bailouts for those who burn through political capital at an unsustainable rate.
I agree with Robert’s argument. Higher fuel prices will force us to use less gas, just like it did last summer. Unfortunately, Obama’s new fuel efficiency standards may simply be a chess move to eventually corral us into econo-boxes AND raise the gas tax.
And why would anyone ever follow California’s lead on anything? I thought Obama is supposed to be a pragmatist. California is destitute. They have no money. It’s a smoldering example of a liberal political disaster. Why unleash this regulatory (and fiscal) silliness on the rest of us?
*Sigh*
snabster: No CAFE (i.e. fleet consumption) regulation in Germany. Without going into too much detail, Germany taxes displacement, and will give credit for low carbon dioxide. The REAL road tax is charged at the pump.
Who wants to drive one of them little shoe boxes?
I saw the politicians going down the Autobahn. They were in big V8 Mercedes. Different rules for the peasants.
A substantially higher gas tax would be palatable if there were offsets in other areas to account for this… vehicle licensing, toll road elimination, gas tax dollars earmarked for road improvement/repair, etc.
I’d bet it would just be another big tax increase on those that can least afford it, further pushing purchasing power down.
I enjoyed listening.
Three important and related points which were hinted at in the interview, but didn’t get full exploration there. I urge that next time you interview on this subject you try to get them clear:
1. Short term vs. long term effects of a gas-price hike: The short-run elasticity of gas demand is usually fairly weak — people still have to drive to work, and most are stuck in their current cars for periods of months or years until trade-in time comes. So what we saw last year in demand destruction (dramatic enough as it was) was only a fraction of what is possible in an environment of high prices. A sustained price hike will change the structure of the fleet over time, towards a more economical mix, which suggests that over the medium and long term the responsiveness of gas demand to price should be greater. Related to this: If the spike is temporary, the memory will likely fade over time and people will revert to their old ways. If the rise is more long-lasting, so will the effects be. Europe, with its long-standing high-gas-tax policy really is the example of these dynamics. Next time on NPR play up the Europe angle — it appeals to the bi-coastal intellectuals who tend to be the biggest listening demographic.
2. High gas prices inducing recession: There is likely something to this. But it more closely linked to the fact that while a price spike is a de-facto tax hike, the real corrosive part last summer was that those “taxes” did not, in large part, stay in the country to circulate in our economy, but went abroad to foreign producers. A domestic gas tax, though, gives money to the government, which turns around and spends almost all of it domestically. This keeps the economy moving at a much better clip. A reasonably well managed gas tax hike (preferably coupled with a broad-based tax cut elsewhere — a guy can dream) should have little broader macroeconomic effect. It’s not the high prices alone — it’s the high prices coupled with the siphoning-off of spending power away from the domestic economy which is the problem.
3. Customers are stupid and can’t choose the “right” car: The other interview subject started to make this argument right at the end of the segment, it seemed, but couldn’t get it all out. The libertarian streak in me (and the libertarians on this site) would howl all over that line of reasoning in a heartbeat. The fact is, it is probably not nearly as true as she makes it out to be. After all, once fuel prices got alarming last year, the Honda Civic really did pull ahead of the pickup trucks in sales.
But let us concede that she may be right to some extent. People can be and often are stupid in large groups. The response then becomes this question: Is anything like the present CAFE standard a good way to address that problem? Answer: Probably not. Instead, start with the nudge. Print window stickers showing a grid of estimated yearly operating costs given various total mileages driven and gas price levels (which, in this universe, are made higher by a tax). If you think that isn’t working well, and that customers systematically underestimate costs or fuel price volatility over the expected life of the car, proceed to the transparent shove. That is, a clear and graduated gas-guzzler tax. Graph the EPA figures for each model and type of car, and impose a special sales tax on cars on the right hand side of the bell curve. Continue taxing over several years until that segment is sufficiently beat down. Chances are, though, with a good-size gas tax and some fairly transparent consumer information, you’ll actually see results without resorting to shoving.
Finally, I have a point about style or rhetoric, which is honestly based on just my personal views of what makes for compelling delivery. When the interviewer asks an obviously loaded question, like “So, Robert, you are basically advocating for no regulation at all?” I would try to start by honestly answering yes or no — it is a yes or no question, after all. I’d say: “Yes. If, by ‘regulation’ you mean a complicated and ineffectual set of prescriptions like the CAFE standards. The only fuel-economy regulation I think we need fits in a single short sentence: Tax gas more. Once the consequences of that filter out — and government may have a role in publishing information to make it easier for people to understand the costs and impacts of high prices — car makers and car buyers will sort out the rest well enough.” A related point is that it for many people it may be better to drive fewer miles than drive the old distance in a more efficient car. A gas tax makes the choice between those reasonable alternatives easy and transparent.
I’m with autojunkie, if we had an efficient and cheap to use public transport system financed by the high gas taxes, I would be for it.
The biggest problem with the adoption of a gasoline tax that I see is the liklihood that other taxes/fees will be dropped is close to nil. Probably the same with CAFE, that will stay too and we’ll simply end up with one more new tax and no offset. That I cannot support!
Remember who you are dealing with here, Obama, Pelosi, Reid, et al.
CAFE is a sales tax. CO2 permits are a tax and a gas tax is a tax. You want national health, you are going to get them all.
And we will still have Trillion dollar deficits as far as the eye can see.
Abandon hope, all ye who enter.
For once our politicos are ahead of the curve, because they are troubled that smaller/hybrid gas burners and the still pie-in-the-sky electrics will lead to reduced taxes from the masses.
Everybody likes using the word fair, so why not? A fair US tax to fund roads would have three components. The first would be a common good component. I don’t care if you are a granola munching, non-car owning person who gets around by Birkenstocks, you still get the necessities of life by road. That’s a general revenue tax.
The second component is an access fee. Sort of. You want to use roads with roadway/bridge and roadside maintenance, rest areas, emergency services and the like? Keep the gas tax for this and in recognition that government doesn’t have the discipline to function without a significant pay as you go revenue stream.
The third component is a damage repair tax. Repeal the stupid CAFE regulations and institute a tax (quarterly,semianually?) based on odometer readings scaled by a vehicle weight factor. I don’t care about engine displacement or vehicle footprint – those are both as imprecise as a gas sales tax. (Incidentally, here’s where you catch the Priuii, etc for some payments).
Road damage is highly nonlinear with axle weight so right away you pay a serious weight penalty – a 6000 lb SUV would pay at 3 times the rate of a 4000 lb sedan if you adhered to the incremental damage estimates. Weathering damage should be handled by the gas tax. The big debate would be over heavy trucks.
I’d say remove the subsidy we all pay for heavy truck damage, let them pass on the taxes in increased costs. That urban dwelling granola muncher ought to pay his fair share for the damage caused by transporting his arugula.
Most NPR programs do have thoughtful and informed hosts. Not “The Takeaway” though – I typically find it to be unlistenable. Thank you though, RF – you handled it well and I agree. Last summer proved your point.
chuckR>
What is the difference in damage between a 380 pound motorcycle and a 4000 pound sedan ?
Robstar –
Roads fail by weathering and by damage from use. Every region would have a different proportion of what causes roads to wear out. I’ve seen axle weight damage expressed as either a third or fourth power relation.
The answer to your question re: difference between a 380 lb cycle and a 4000 lb sedan is its the same difference proportionally as the difference between a 4000 lb sedan and a 42000 lb truck. But in absolute terms, the trucks are so damaging that the rest of us would pay very little per year and the trucks would pay the lions share of a use tax.
From political considerations, you’d never see a truly proportionate use tax, but there ought to be a better recognition of who should be paying for the wear and tear than what we have now. If I were road tax czar? – your 380 lb cycle? – pffft, no use tax due.
When our provincial government introduced a carbon tax last year that added less than 3 cents to a litre of gas, you’d think the sky was falling with all the bitching and moaning. It didn’t help that gas prices were at record highs at the time, of course, but even now gas taxes are politically unpalatable. And this tax is far less than what would really be required to see substantial modification of behaviours.
Cutting our oil consumption is a US security and economic necessity, and I absolutely agree that a gas tax is the way to go. Sadly, it may well be political suicide to propose it. Can you imagine the endless FOX news headlines attacking Obama if he were to propose a gas tax? in a recession? more market manipulation? more taxes? He must be a femi-nazi-commi-eco-fascist-liberal!
CAFE is an awful vehicle for this process, but I fear it may be the only one available.
One problem with CAFE -vs- Gas Tax debates is the false comparison of how high the tax would have to be to achieve the MPG figures mandated by the CAFE. This is a false comparison, and something usually missed by the Gas Tax haters. The critical aspect of a gas tax is that it allows consumers to choose from a multitude of ways of conserving fuel while CAFE demands only a MPG benchmark. For a Gas Tax to gain public support, the debate must be between how much fuel it will save, not how high the MPG figures might be. Our man Farago tried to steer the topic this way, but the commentator and other guest kept going back the other way.
SunnyvaleCA,
I just listened again, and boy are you right. I used to respect Andrea Bernstein, but what an ass! She wasn’t even listening to RF, and the CAFE defender she was propping up really knew nothing. I guess you know where they fall on the govt. regulation vs. power of the free market debate.
Robert,
You were the only rational voice in this discussion!
cardeveloper :
May 19th, 2009 at 6:53 am
has anybody considered the safety social impact of forced small car via fuel economy standards? Small cars in general do not survive as well in crashes as larger cars. To make a small car safer, you end up adding weight and additional safety controls, further reducing the fuel economy. I absolutely agree, fuel tax needs to increase. The other side to increasing fuel economy standards, lower taxes collected to support our roads, etc.
All cars are small compared to big rigs and buses. Even a medium-sized car (usually highest rated in terms of crash survivability) or an Expedition-class SUV is nothing more than a soda can compared to an 18-wheeler.
Thus… we should all drive five ton SUVs?
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That said… I don’t think consumers are as dumb as people say they are. People used to buy trucks because: a.) they get a free pass on the guzzler tax, b.) they have lots of space and c.) they could afford the gas.
Remove the guzzler tax entirely, make people pay straight out on gas tax, and their tastes would likely shift to lighter-bodied crossovers (which are, mind you, safer than the older ladder-frame competition) or even minivans, as gas prices would force them to change their way of thinking… or way of life.
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Yeah, MPG is another red herring. MPG doesn’t tell you what that gasoline was spent doing… if you sleep in your Prius all day with the AC on, you’re polluting more and using more gasoline for less economically useful purposes than someone who’s using their Suburban to take a dozen kids to soccer practice.
Taxing the gas leaves you the freedom to do what you want… but at least you pay for what you do… it’s not like man has a god-given right to drive endlessly on roads that other men have paid for with their taxes… but if that man pays more for the extra usage of those roads, it’s entirely fair.