Why you should care about a gas tax
With Detroit’s Big Three in Washington this week essentially pleading for their lives, economists are abuzz with ways to revive the auto industry. One of the most interesting proposals, though not new, was recently outlined in The New York Times in an op-ed that proposed a radical change in the gas tax. As per the proposal, the government would institute a $3.50 per gallon price floor, taxing gas if it dips below that price.
It is one of those issues that everybody except politicians loves to talk about. Some say the gas tax is a surefire way to decrease our nation’s oil dependency, but nobody wants to be seen advocating an increase in taxes. But as Barack Obama preaches change in government while also pushing for a new green agenda, the gas tax might emerge as a radical new possibility in government.
The gas tax dates back to a one-cent-per-gallon rate in 1932. Thanks to inflation and various increases, the federal government currently has an 18.4 cent tax on a gallon of gas, in addition to each state’s own tax on gas. The average state tax is 28.6 cents to the gallon. That money is often used for transportation projects, like road reconstruction or alternative energy initiatives. But the real benefit of raising the tax would be in simply driving up the price.
For such a politically toxic issue, it is also simple common sense –- raising the tax would drive up the price of gas, discouraging people from using it. Economists have even come up with different rebate schemes to help dampen the blow of the increased tax. Under most proposals, part of the revenue from the tax would go back to drivers (especially low-income drivers), and the rest would go to researching alternative energy and transportation reforms. That way, the net cost wouldn’t be so dramatic and the political fallout might not be fatal. Others are proposing that the tax revenue go to the auto industry to design fuel-efficient cars, so that eventually the hike in gas prices wouldn’t be noticed because it would take less gas to drive.
But the real idea is eliminating dependence on oil. With prices going up, consumption will drop. People would be opposed to driving, looking to other forms of transportation. A similar idea has been suggested for reducing youth smoking, by raising the price of cigarettes.
Of course, as the elder George Bush can attest, raising taxes is an easy way to guarantee an early retirement in politics. So no sane person will advocate raising the gas tax, especially now that gas prices are lower (but don’t get too used to that) and drivers are actually happy. But as the green movement grows and oil increasingly becomes a dirty word, we might be looking for radical measures to reduce our dependency on fossil fuels.
If Obama is serious about changing the face of politics, it would be appropriate to consider a gas tax hike with a rebate. By putting the idea in the political sphere, he could at least raise the debate and get people talking about it. The energy crisis isn’t going to go away and fuel prices won’t stay low forever, so a gas tax hike might be in our future. But at least this time we’ll know exactly who to blame.
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If gas prices go up, you'll probably need help coming up with cheap gift ideas. Or you can return home.
The best way toward alternative energies would be for the government to stop meddling in all energy related markets. Stop manipulating the price of oil and gas. Stop subsidizing ethanol production. Stop everything, and let the markets function.
Nixon was the first to talk about “energy independence” in 1973. Ever wonder why, after 35 years, America is not “energy independent?” The government. Pure and simple.
Dan
November 25, 2008 at 12:57 am
First of all, in our current economic position I personally can’t see any way someone can be advocating less government oversight and more trust in free markets. Moreover, America is like a horse when it comes to oil–you fill the feedbag and it will eat ’til either the bag is completely empty or it’s stomach explodes. With gas prices up people finally had to change their lifestyles (for the better in my opinion) and with gas going down the first thing people do is go fill their tanks. As someone whose financial means are directly hurt by a decrease in driving, engine sales, and ethanol production I know that is isn’t an easy idea to accept. However, someone has to be looking at the bigger picture and steer the county before the real crunch times come. The right choice isn’t always the easiest, but sitting on their hands and crossing their fingers hoping consumers make the right choices and demands to reshape our system is not the answer by far.
Marshall
November 25, 2008 at 2:14 pm
@ Marshall –
Take a second and ask yourself why we are in the current economic position before running to your nanny (state) crying for fixes. History will show you that an economy cannot be held aloft by man-made measures forever. There are rules to the markets -patterns and recurring cycles. The movement of markets and economies is as natural as that of the seasons or tides. They cannot be controlled or manipulated for long periods, let alone by a bunch of generalist politicians.
The contributing factors to our current financial crisis – Fannie Mae and Freddy Mac establishing a monopoly position in the mortgage market, the Fed’s loose monetary policy – were both facilitated by the government. The Fed lowered interest rates to below what the market rate would normally be, and suddenly it becomes much cheaper to borrow money, thus resulting in malinvestment and economic downturn. It is usually more profitable to sail with the trade winds than to row galley-style in the direction you think you have to go.
But people refuse to take the time to educate themselves on such things as the basic structure of markets and their characteristics. They prefer instead to lazily leave their trust in the hands of politicians and other policy makers.
Dan's right
November 25, 2008 at 3:03 pm
…that’s a terrible, terrible idea. For just so many reasons. I mean, o you realize that the reason gas prices are DOWN right now is because no one could afford it when it was more expensive? Your solution for or economic and gas crisis is to make it impossible for people who have to use a car to get around to do so? I mean, seriously, what alternatives do most people have right now? If the alternative forms of energy were in place and viable, I’d be opposed to the gas tax – I’m generally opposed to the government meddling with the free market in this way and trying to tell people who they can and can’t spend their money and what is and isn’t good for them, because the current administration is not my MOTHER – but it would be understandable. The wealthy people who waste gas as it is with gas-guzzling vehicles will still be able to afford gas, and they’ll still use to much. You’re punishing the people who can barely afford gas as it is, but sure as hell can’t afford to buy a hybrid or start renting an apartment/buying a new home closer to their job. Take my cousins, for example – they live in a small town in Arkansas, they life on a ranch, and they have to drive into the city to do their shopping, go to work, etc. They need gas for their farm equipment. If gas taxes go up, they CAN’T use less gas, they’re just going to have to pay more. They’re getting completely screwed over.
Besides, this sort of government meddling with supply and demand is not sustainable, and it will get us in trouble. There’s a hole in the bucket where the money should go when the government starts fuckign with such a massive industry, and you may have a problem with lesser gas companies going belly up when they’re not making as much money with the new gas tax and decreased demand, which could drive prices up for those who can afford to stay in business because they don’t have as much competition. Of course that’s all wild conjecture due to me being worked up, but yeah. This is just such a terrible, terrible, terrible idea.
I typically feel that the answer to your problems is never pour money into the government and hope they use it for what you want them to. I mean, Dailey likes to use money that’s supposed to go the CTA on pianos that end up in warehouses while the CTA gets fucked up and prices go up and it still gets derailed while I’m on it, but that’s besides the point. Or they do exciting things like spend it all on a war that never ends, or public education and healthcare systems that, despite spending more per person than any in Europe, are vastly inferior in all measurable ways.
SO yeah, long story short, I don’t think we should tax it.
A. K. S.
November 25, 2008 at 3:48 pm
I think a gas tax is exactly what’s needed, the difference is (and the reason people are so opposed), is that it needs to be imposed SLOWLY. In other words, you have it start the tax out small, and raise it VERY slowly, over a course of say 50 years. That way it only barely impacts workings families for say the first 10 years or so, and in the mean time, the money from the taxes is gradually piling up and goes into two places only: Public transportation and grants for US-based energy research. It will take DECADES to build up the technology and infrastructure we need to wean ourselves off crude…
But the thing the “free market” zealots don’t realize is that markets have absolutely no ability to do “long term” thinking. Markets only know what consumers will consider fashionable in the next 6-10 months…. Markets don’t know that oil is going to run out.
Did you know that? It’s kind of like knowing you’re going to die — you understand abstractly, but you prefer not to think about it.
So let me repeat myself.
OIL IS GOING TO RUN OUT.
Some predictions say it will happen in the next 50-100 years, but it is going to start affecting the economy in as few as 20 years.
And when oil starts to get truly scarce, the price is not going to go up nice and gradually, giving us plenty of time to build infrastructure and technology.
It is going to go up like a rocket, creating an economic disaster world-wide. Places like Europe and Asia that have decent public transportation, more fuel efficient cars, and so may be able to weather such a change. The US is going to absolutely screwed in a way that makes the current recession look like child’s play.
You think I’m being silly — all doom and gloom? You think it’s not going to happen? I’m sorry, but this is simple math. Our thirst for oil increases ever year, and it is a limited resource. If you don’t believe me, look here: http://www.lifeaftertheoilcrash.net/
Now I absolutely hate government meddling, which is why I don’t want Obama to bail out the auto industry, or subsidize hybrid cars, or any of that crap. Let the markets decide which businesses will succeed and fail, which technologies are best… That is what they are good at.
But the markets are only a reflection of short-term consumer demand and medium-term profit. They won’t save us from the crash when it comes. That is EXACTLY what government is for.
-Jesse
Jesse Watson
December 5, 2008 at 6:58 pm
Tax the gas
Take the tax for public transport
Increases demand for more fuel efficient cars
Life is good.
Also, with a higher gas tax, new more efficient cars will be on the market as well as better farm equipment. Look at Europe for many case studies of this. You have Google, look it up. The government should also offer incentives to get people to trade in their older cars for newer ones. In the long term, gas costs will remain the same as you fill up far less often and the total amount will be preserved. Less gas used because fewer fill-ups, lalala, life is good.
And AKS or whatever, clearly you have never been to Europe little less lived there. The quality of care in Switzerland, for example, and Austria is top-notch as is the medical training. The research may not be as prolific as it is here, but the care is on par, if not better. It is ludicrous to make such an assumption. You can find just as bad standards of care here as you can there. Besides, what’s good care if those who can’t afford it and need it can’t get it? Chew on that fat.
Ginger Brew
December 5, 2008 at 8:13 pm
Mommy
I am only 8 inches long
but I have all my organs.
I love the sound of your voice.
Every time I hear it
I wave my arms and legs.
The sound of your heart beat
is my favorite lullaby.
Month Two
Mommy
today I learned how to suck my thumb.
If you could see me
you could definitely tell that I am a baby.
I’m not big enough to survive outside my home though.
It is so nice and warm in here.
Month Three
You know what Mommy
I’m a boy!!
I hope that makes you happy.
I always want you to be happy.
I don’t like it when you cry.
You sound so sad.
It makes me sad too
and I cry with you even though
you can’t hear me.
Month Four
Mommy
my hair is starting to grow.
It is very short and fine
but I will have a lot of it.
I spend a lot of my time exercising.
I can turn my head and curl my fingers and toes
and stretch my arms and legs.
I am becoming quite good at it too.
Month Five
You went to the doctor today.
Mommy, he lied to you.
He said that I’m not a baby.
I am a baby Mommy, your baby.
I think and feel.
Mommy, what’s abortion?
Month Six
I can hear that doctor again.
I don’t like him.
He seems cold and heartless.
Something is intruding my home.
The doctor called it a needle.
Mommy what is it? It burns!
Please make him stop!
I can’t get away from it!
Mommy! HELP me!
Month Seven
Mommy
I am okay.
I am in Jesus’s arms.
He is holding me.
He told me about abortion.
Why didn’t you want me Mommy?
Every Abortion Is Just . . .
One more heart that was stopped.
Two more eyes that will never see.
Two more hands that will never touch.
Two more legs that will never run.
One more mouth that will never speak.
Katie
December 30, 2008 at 10:56 pm