Latest posts for the thread "Ray's Modest Proposal: A Graduated Gasoline Tax "

Re: Re: Re: Ray's Modest Proposal: A Graduated Gasoline Tax

GMT

The economics works like this. Many jobs that might have been economically feasible with gas a 25¢ will not be when gas is at $4.00. With the price of gas going up at a known rate will alert those who have those jobs or employ people in those jobs that something much change.

There are several possible changes. The cost of the product or service may go up or the delivery method change orit will not be delivered.

Some people will find themselves without a job. They will then find that there are new jobs opening up. With the cost of fuel higher, then the corner food market will become more desirable (economically feasible). Likewise public transit will need more employees etc. and others will end up there.

Under these conditions there are winners, loosers and whiners. You chose which you want to be.

Re: Re: Ray's Modest Proposal: A Graduated Gasoline Tax

Troubleshooter — GMT

How do I use public transportation when I work in three different towns on different days of the week, and the bus goes to each town once a day?

How do I carpool. Nobody else has the same work schedule.

You econompoops who use pocket calculators to figure general costs of different vehicles, and then make up one rule for everyone, belong in jail. You have no right to intrude into the lives of others to satisfy your groundless fears.

As long as government keeps its big fat destructive nose out of the economy, it will take care of itself. It's government meddling that makes messes. And that includes the OPEC governments.

If any senator introduces such a tax, he will be voted out by many angry citizens who resent government meddling in their lives.

We need a global reduction of government, not driving. That would eliminate the hot air rising from politicians.

Re: Ray's Modest Proposal: A Graduated Gasoline Tax

GMT

I thnk that people should use public transportation not raise the price of gas, walk to work, use a bicycle to work. I MEED MY VEHICLE FOR WORK A PICK UP TRUCK!!!!! I live on a fixed income, so raising the price of gas or taxing gas makes me poorer and poorer. What are you thinking about, yes walk, bike or use public transportation it is available in WISCONSIN MILWAUKEE buy a bus pass leave your gas guzzling vehicle at home save money.

Re: Ray's Modest Proposal: A Graduated Gasoline Tax

crazyart — GMT

How about higher taxes on oil companies that don't invest the mega-profits we give them in further exploration or alter.fuels

Re: Ray's Modest Proposal: A Graduated Gasoline Tax

drdremd — GMT

+1

Until I see at least 2 people in at least 50% of Large SUV's Gasoline is far to cheap.

Re: Ray's Modest Proposal: A Graduated Gasoline Tax

japetras — GMT

Great idea Ray. Does the tax apply to OTR rigs also? How about our great government give tax rebates for all those who purchase alternative fuel vehicles. And by tax rebates I mean serious rebates that will make these hybrids cheaper than gasoline vehicles. Supply and Demand will force the Big 4 to focus more on new technology. A solution is out there. Just remember, the oil companies are enjoying record profits (read BILLIONS) at our expense. But as they told congress, they are also paying record taxes. Let's use their taxes to help us for a change.

Re: Re: Ray's Modest Proposal: A Graduated Gasoline Tax

drdremd — GMT

What do you drive now?
I would imagine that a Smart would have a similar (or lower) TCO (excluding fuel) than MOST cars.

I'm not a Big smart fan personally, I feel that the mileage simply isnot high enough for me to justify trading the TDI In on one (Worse Mileage than my car and Smaller)

Re: Ray's Modest Proposal: A Graduated Gasoline Tax

BarryNNJ — GMT

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.

Re: Ray's Modest Proposal: A Graduated Gasoline Tax

Joseph_E_Meehan — GMT

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.

Re: Re: Ray's Modest Proposal: A Graduated Gasoline Tax

Docnick — GMT

Right; we live in a global economy and oil is a truly global product, bought and sold at world prices of now $118/barrel and heading up. Most developed countries, even ones with lots of oil, have some mechanism to reduce consumption through high user taxes, fuel economy/emission standards, and an annual road tax.

Once a year I get a Dutch car catalogue. Besides the prices and specs of each vehicel is the annual road tax to keep the plates on. This is steeply graduated against high HP, and car weight. This is on top of the $98,000 that a Jeep grand Cherokee costs there, which also has to burn the $7.50/gal. gasoline. You get the picture.

At one time in the past the US was more than self-sufficient in oil, it was a net exporter of cars, trade deficits were unknown, and Global Warming was not an issue.

We are still behaving as if those conditions still existed.

Re: Ray's Modest Proposal: A Graduated Gasoline Tax

granita3 — GMT

-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!!!!!!!

Re: Ray's Modest Proposal: A Graduated Gasoline Tax

itnenaer — GMT

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.

Re: Re: Ray's Modest Proposal: A Graduated Gasoline Tax

mconn — GMT

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.

Re: Ray's Modest Proposal: A Graduated Gasoline Tax

rratherbeflying — GMT

to quote you talking to your brother..... "are you nuts?"

1. 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.....)

2. 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?

1. everyone pays more in additional gasoline tax
2. 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!"
3. the average citizen pays more for groceries, utilities, cable TV and..... yeah.... NPR radio before its all over......
4. 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

Re: Re: Re: Ray's Modest Proposal: A Graduated Gasoline Tax

GMT

Costs to society depend on who says they are costs. Therefore, they are fictions.

Economic decisions can never be made collectively. Individuals choose what to buy and when. This is why the government can't control the economy.

Re: Re: Ray's Modest Proposal: A Graduated Gasoline Tax

Docnick — GMT

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.

Re: Ray's Modest Proposal: A Graduated Gasoline Tax

Dr. Lapin — GMT

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!

Re: Ray's Modest Proposal: A Graduated Gasoline Tax

rcbeep73 — GMT

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.

Re: Ray's Modest Proposal: A Graduated Gasoline Tax

evwacko — GMT

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

Re: Ray's Modest Proposal: A Graduated Gasoline Tax

miguel8730 — GMT

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!!!

Re: Ray's Modest Proposal: A Graduated Gasoline Tax

miguel8730 — GMT

Keep raising the gas tax! Global warming will kill my stocks$$$$$$$$$$$ Short term pain long term gain chaching!!!

Re: Ray's Modest Proposal: A Graduated Gasoline Tax

druppert — GMT

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!

Re: Ray's Modest Proposal: A Graduated Gasoline Tax

sarikarkus — GMT

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.

Re: Ray's Modest Proposal: A Graduated Gasoline Tax

autoinstructor — GMT

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

Re: Ray's Modest Proposal: A Graduated Gasoline Tax

peterrsmith — GMT

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.

Re: Re: Ray's Modest Proposal: A Graduated Gasoline Tax

itnenaer — GMT

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.

Re: Re: Re: Ray's Modest Proposal: A Graduated Gasoline Tax

GMT

But who are YOU to say what the "right" result is.

The free market always delivers the final result, no matter what government does. When government tries to do something about it, it causes the wrong intermediate result. This is because the economy is much bigger than any government's power. Individuals making buying and hiring choices, when taken collectively, undo any attempt of government to control such choices.

We will get more fuel efficiency when the market demands it, and not before. But I see the market already demanding it without government meddling.

Trying to control the economy through government regulation is like trying to scotch-tape shaving cream to a cloudburst.

And an elected government can't be any smarter than the least intelligent voter.

Stop worshiping government, and you will be better off.

Re: Re: Ray's Modest Proposal: A Graduated Gasoline Tax

Docnick — GMT

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.

Re: Ray's Modest Proposal: A Graduated Gasoline Tax

srobsrob — GMT

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

Re: Ray's Modest Proposal: A Graduated Gasoline Tax

Phineas — GMT

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?

Re: Re: Ray's Modest Proposal: A Graduated Gasoline Tax

Troubleshooter — GMT

And just what fairy supplies the money to reduce the price?

We are surrounded by econcompoops! These are people who believe that government has the power to do anything it wants and have the result come out the way government wants it. Unfortunately, the rules of real life experience show that:

- Government can't control the economy without making a big mess of it.
- Markets always try to balance, whether or not government wants them to.
- Usually, when a market is unbalanced by government action, it rebalances itself in such a way as to either undo the government action or make a worse mess than the original problem.
- When government tries to control the price of a product to be lower than what it costs to make it, nobody makes the product.
- When government tries to raise the wages of workers higher than what employers can afford to pay, nobody is hired, and the employers go out of business or move to foreign countries.
- When government raises taxes, businesses move out of the country or go bankrupt. People can't afford to live on their incomes, jobs disappear, and mortgages are foreclosed.
- When government tries to make the price of a product higher, too much of the product is made.
- When government subsidizes health care for the poor, it raises the price of health care for the rest of the people.
- The stimulus package will not cause people to spend more money. It will instead let them pay down their debts.

In short, when government does ANYTHING to the economy, the effect will not be the effect government wanted to occur.

Re: Ray's Modest Proposal: A Graduated Gasoline Tax

wacehc — GMT

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?

Re: Ray's Modest Proposal: A Graduated Gasoline Tax

drphysics — GMT

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!

Re: Ray's Modest Proposal: A Graduated Gasoline Tax

nitrile — GMT

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.

Re: Re: Ray's Modest Proposal: A Graduated Gasoline Tax

Kendahl — GMT

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.

Re: Ray's Modest Proposal: A Graduated Gasoline Tax

RogerB34 — GMT

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.

Re: Re: Ray's Modest Proposal: A Graduated Gasoline Tax

Docnick — GMT

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.

Re: Ray's Modest Proposal: A Graduated Gasoline Tax

cbarber — GMT

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!

Re: Re: Ray's Modest Proposal: A Graduated Gasoline Tax

Docnick — GMT

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.

Re: Ray's Modest Proposal: A Graduated Gasoline Tax

Mazzula — GMT

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.

Re: Ray's Modest Proposal: A Graduated Gasoline Tax

miguel8730 — GMT

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.

Re: Ray's Modest Proposal: A Graduated Gasoline Tax

Troubleshooter — GMT

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.

Re: Ray's Modest Proposal: A Graduated Gasoline Tax

Kendahl — GMT

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.

Re: Ray's Modest Proposal: A Graduated Gasoline Tax

dean456 — GMT

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.

Re: Re: Re: Re: Re: Re: Re: Ray's Modest Proposal: A Graduated Gasoline Tax

DoctorMike — GMT

Totally agreed DocNick. So let's hope some sanity prevails as we need to quickly develop alternate fuels and transportation technology for the right reasons with the right metrics. Not the phony, Hollywood hyped reasons with goals that are incorrect and unworkable that divert our attention and resources from solving the real problems.

Re: Re: Re: Re: Re: Re: Ray's Modest Proposal: A Graduated Gasoline Tax

Docnick — GMT

I would have to agree with you that is what will likely happen, whether I like it or not. Part of the cause of the original oil crisis was Richard Nixon freezing the price of natural gas at only $0.40/million BTUs (it is $7.50 now!!) This caused energy companies to stop exploration, and putting pressure on heating oil and coal. After gas prices were allowed to rise, considerable new discoveries were made, and gas became plentiful again, until the last 5 years.

Unfortunately, worldwide exploration for oil has not resulted in finding enough to replace the rising consumption. In other words, "you ain't seen nothing yet", and $150/barrel oil will be with us within 5 years, since we cannot even slow down the consumption rise in China, India and other rapidly developing countries. US oil companies are flush with cash and are buying back their own shares, for lack of places WORLDWIDE to drill and explore. At least 75% of the world's oil reserves are now in the hands of foreign state oil companies, and generally off limits to US firms. That is the REAL problem, since these state oil companies are less than brilliant in developing new reserves.

Gas, on the other hand is in much better shape. There are plenty of huge reserves worldwide, as well as on the Alaska North Slope and Northern Canada. All it takes is $40 billion in new pipelines to bring it out.

If we accept the fact that neither the Secretary of State nor the Marine Corps can get us more oil, we are faced with a decreasing supply in the nest 20 years. So it's up to Americans to find a way to best accommodate this new reality.

Re: Re: Re: Re: Re: Ray's Modest Proposal: A Graduated Gasoline Tax

DoctorMike — GMT

Much of what you say is true Docnick. The Europeans and Japanese typically live a frugal, crowded, and small car life. Many times driving is drudgery and a chore for them, and that is sad. They also crowd into tiny flats and houses and wait for hours for public transit and health care. I have to admit I do pity them for their lifestyles, but that is their choice and it's fine for them as they are used to it, just not my free choice. I do hope the government doesn't try to force it upon us.

We have been an oil importing nation for many decades and it is of course getting worse since there are so many restrictions to finding and developing (or even refining) any oil here. Thus part of the balance of payments deficit is self inflicted by environmental lobbyists and their paid political allies in Congress. Another large part of the trade deficit is of course the loss of manufacturing as firms have outsourced to cheaper wage and less environmentally regulated countries. I think that factor is much larger than oil, but a different topic. However, the oil shock of the 1970s led to gas lines and quasi-rationing due to the stubborn government officals who refused to allow prices to rise (they established price controls and regional blends) and thus sought to repeal the laws of supply and demand. That would not have happened had gas prices risen to where they should have been to suppress demand and bring it back into balance with supply. Governments are not very good at timing or understanding free markets when they are manipulating same for political agendas. But they haven't learned that and so I suspect the new raft of politicians waiting to populate DC will once again try to manipulate free markets soon. I also expect the same disastrous results as before, since politicians haven't changed.

Re: Re: Re: Re: Ray's Modest Proposal: A Graduated Gasoline Tax

Docnick — GMT

You were lucky to have spent some time in the Saudi Arabia of Europe. Believe it or not DoctorMike, I am a free trade advocate where possible. Norway has a huge balance of payments surplus which caused them not to join the European Union with all its restrictions. So even in a rich, thinly populated country with a huge trade surplus, the average car is much smaller than in the US, and CONSUMES LESS GAS.

The proposed regulations are not meant to get rid of cars, but to minimize their environmental and econonmic impact. The US traffic sytem is based on cars on roads rather than a mix of trains, busses and cars. As such, the population density will have to reach that of greater New York before public transit will significantly impact car use.

You may have travelled to other European countries and noted the small average size of cars and engines in them, the result of a complex set of regulations to: 1) conserve space on the streets, 2) minimize oil imports, 3)minimize environmental impact. To achieve this in a free market environment would mean that all the streets would be completely clogged with cars before consumers started to come to their senses and used bicycles or public transit. China's cities are currently going through this.

In a previous posted we stated that if the US had all the oil it needed, had a large balance of payment SURPLUS, and there were no environmental consequences to the use of oil, we could stick our collective heads in the sand and let laissez faire economics take its course. Saudi Arabia is one of the few countries than can actually afford to do so.

However, with an annual oil import bill of $330 billion and an overall trade deficit of $820 billion this "economic freedom" of consumers you advocate has to be questioned. Especially, since 2 traditional suppliers to the US, Mexico and Venezuela, are depleting their reserves, so additional imports would have to come from elsewhere. Most of those "elsewhere" countries and unfriendly, unstable and unprecdictable.

If you were the next person in the White House you could choose beween regulation to ease the future pain or let things take care of themselves, which would result in: the same $7-8/gallon or more gas, but with a mad scramble at the pumps, like in 1974. Ultimately you would have to step in, WW II style, and impose RATIONONG until things could be brought under control. Either way, an equilibrium would eventually be established with exactly the same frugal cars, expensive gas, new technology, and a raft of regulations to make sure everyone had access to that expensive gas.

Re: Re: Re: Re: Re: Re: Ray's Modest Proposal: A Graduated Gasoline Tax

Craig58 — GMT

That is exactly why it won't happen anytime soon, a lack of "political will" (to put it politely). We will continue to do what we are doing (basically nothing) until the reality of world economics overtakes us. At some point in the next couple of decades, the developing world's (primarily china and india) per capita demand will approach western levels and energy prices will increase anyway. Good news if you happen to be in the international energy business, not so good for the rest of us. The price will be determined by supply and demand, and those countries whose demand exceeds their supply will have very little control of the situation. Those countries (i.e., europe) that currently have high energy taxes may be in a better position to "absorb" some of the impact, but they will also be affected. At that point, the lifestyles of the folks living in the "developed" world will be affected.

Re: Re: Re: Re: Re: Ray's Modest Proposal: A Graduated Gasoline Tax

DoctorMike — GMT

I agree. If people really saw a need and also had an economic signal, demand would go down, but yes probably above $10/gal before we see much. In general people will shift money from other needs to transportation as prices rise, as they value the utility of transportation more than the other uses, simple economics and most people are able to make those trade-offs without harming their personal life style. I do wish some politicians would propose something draconian for a gas tax, like $10-$12 per gal. Those politicians would be retired very quickly, we are not Europe or Japan and people will not tolerate it, but I know of some running for Prez right now I would encourage to try the big tax, go ahead make my day.