Wednesday, November 19, 2008

The conservative case for a gas tax 

If you believe that anthropogenic global warming will lead to global disaster or you believe that shipping billions of dollars to the disgusting countries of the world is economically and geopolitically idiotic, then you should suppport a significant tax on gasoline (perhaps structured as an "accordian" that establishes a lowest possible price). If you do not trust the federal government to spend that money wisely (and I certainly don't), then we should return the money to the citizenry by cutting some other federal tax. Recognizing that elections have consequences and the Donks will not just return it to the few Americans who pay personal income tax, I can think of several ways to make that compensating tax cut progressive (since commutation to work is the largest "fixed" burden of gasoline for most people, we could, for example, give the money back by exempting the first few thousand dollars in wages from the payroll tax).

FP Passport explains why this will never happen, even though the Democrats will have the White House and probably a dominating majority in the Congress.

So, instead of the one tool that we know for a fact spurs innovation and encourages people to change their oil-consumption habits -- higher prices -- we're probably going to get massive, complicated subsidies and tax credits for powerful, well-connected constituencies (e.g. the corn lobby). The U.S. government, rather than the market, is going to decide which technologies to support.

Somehow, I don't think the House of Saud is too worried about that pledge to wean the United States off of oil from the Middle East in 10 years. (bold emphasis added)

It seems to me that if you are a lefty green or a national security conservative, you at least ought to agree that we should reduce our reliance on gasoline to power our automobiles. We can do that by tweaking market signals via a tax on gasoline or by a massive governmental "industrial policy" approach that will be expensive, wasteful, and quite possibly a failure. The bolded language is, I think, the best conservative argument in favor of a meaningful federal tax on gasoline.


By Blogger Mrs. Davis, at Wed Nov 19, 08:24:00 AM:

Gasoline is not the problem, imported oil is, whether it is used for gas or grocery bags. We should implement a variable oil import excise that keeps the fully taxed price of imported oil above $100 per barrel indexed for inflation. Then investments can be made in whatever form of domestic alternative energy the market chooses with reasonable assurance of a return on capital invested. As a sop to liberals, I would even agree that the tax, because it will bring widely varying amounts of revenue depending on the world market price for oil, should be returned to the taxpayers per capita, thus assuring its revenue neutrality.  

By Anonymous Anonymous, at Wed Nov 19, 09:10:00 AM:

Mrs. Davis is on the money - the tax needs to be on oil, not gas, and structured so that the government doesn't get to keep the money, unless you can think of another way to eliminate the incentive (to the govt) to import oil. I don't know about her $100 number specifically, but the variable import tax needs to be sufficiently high to make domestic energy development profitable.  

By Anonymous Anonymous, at Wed Nov 19, 09:43:00 AM:

You bet. High gas tax. Let's really stick it to rural people like me that have to drive 25 miles on way for groceries and 40 miles one way to check cattle. And the greenie weenie car isn't going to go through the pasture to check cattle very well either. Rural incomes are generally far lower than urban incomes as well. yeah. Let's really screw the country folks.  

By Blogger Viking Kaj, at Wed Nov 19, 11:39:00 AM:

Given my libertarian leanings I am usually not in favor of any new taxes, since I don't trust the government to know how to better spend money in my interest than I do. We must, however, recognize that the tax system is the most powerful weapon the government has for structuring economic activity (even more powerful than fiscal stimulus).

In this case I have no doubts that the United States would be more secure if we were not as involved in the Middle East with its inherently unstable politics and irrational decision makers. The reason why we are in the Middle East is oil. Therefore, I believe that national security goal number one should be energy independence. We do need a gas tax that encourages conservation. And we should take the proceeds and use it as seed money for alternate energy technology development. This would allow us to develop new industries and employment.

Until now, this has run head long into the oil and energy companies, and the utilities, who have a vested interest in keeping the old system alive. We probably need to check what kinds of contributions these players are making to the dems, but I will bet that they are not insignficant. They certainly had the ear of the Bush administration.

With regards to the comments about rural folks, Europe has much higher energy taxes than we do and still has a significant agricultural sector. People there just buy more fuel effecient vehicles to get around. Replace the Ford F-150 v-8 with a turbo diesel Renault and you can still get around at 40 m.p.g. Do people really need all that torque that goes unused most of the time?

If you want to sell this to the dems in the present environment I think the job creation angle would have a certain appeal. Of course all of this would take true leadership convincing Americans that we need to sacrifice to win a war and make our country more secure. Not likely to happen these days, which is sad because this is a golden opportunity.  

By Blogger Viking Kaj, at Wed Nov 19, 11:48:00 AM:

Forgot to add that I agree with the earlier posters on the need to tax oil rather than gas, but perhaps not what we do with the proceeds.

Also, we should have tax rebates like Germany for individual homeowners who invest in solar, wind and geothermal technologies. If you are a true conservative then you should support any scheme that helps you to reduce taxes and "go off the grid." ;-)  

By Blogger Dawnfire82, at Wed Nov 19, 01:04:00 PM:

"With regards to the comments about rural folks, Europe has much higher energy taxes than we do and still has a significant agricultural sector. People there just buy more fuel effecient vehicles to get around. Replace the Ford F-150 v-8 with a turbo diesel Renault and you can still get around at 40 m.p.g. Do people really need all that torque that goes unused most of the time?"

I see several things wrong with this assessment/solution...

First is a problem with Renault. You're offering Renault diesel powered trucks as an alternative to a Ford F-150. For one thing Renault doesn't seem to make pickup trucks; only heavy transport (military and otherwise). For another, diesel is more expensive than regular gasoline. Offering it as a cheaper replacement is... silly. Last, show me a vehicle, any vehicle, that gets 40 mpg in pastures while hauling trailers, livestock, produce, or tools.

Secondly, the gist of your idea is 'Gasoline is too much? Buy a new car!'

If I made enough money to be able to just go and buy a new car whenever I felt like it, chances are that the cost of gasoline wouldn't really bother me.

And Europe's "significant agricultural sector" is heavily subsidized by their socialistic tax programs and are not (and have not been for a long time) truly competitive or especially efficient. One of the biggest impediments to greater Brit participation in the EU is their unwillingness to pay for continental agricultural subsidies.

Finally, any argument whose basic gist is 'we should do things like the Europeans' is immediately suspect.  

By Anonymous Anonymous, at Wed Nov 19, 02:42:00 PM:

If we were to tax imported oil so that it wan less than say $100 per barrel, won't the OPEC nations either 1) have an excuse to manipulate supply to make sure it's no less than $100, and/or 2) collaborate in cheating to avoid the tax. Dind't Carter create two-tier pricing for oil?


By Blogger JPMcT, at Wed Nov 19, 04:24:00 PM:

The energy companies need to be allowed to utilize oil based US coastal and oil-shale resources AND develop (for their own sake) alternative methods of energy in a 30 year plan.

Taxing oil imports to push the price up and influence behavior is silly tinkering, as silly as restricting coastal drilling.

Ramp DOWN imports as we ramp UP our own production...that will keep the price market driven.

Once you place a tax on ANYTHING in the US, it becomes like a toll and continues long beyond the time the original purpose called for.  

By Blogger TigerHawk, at Wed Nov 19, 05:52:00 PM:

Fine, tax oil. I actually agree with that, but it is picking a nit. Nobody has actually responding to the dominant point of the post, which is that a gas or oil tax may be the least bad alternative even for conservatives.  

By Blogger Mrs. Davis, at Wed Nov 19, 06:15:00 PM:

An oil import fee is the best alternative, especially if the proceeds are returned to the taxpayers directly. This is so clear that I thought that was why we had headed into discussion of implementation issues.  

By Blogger BR, at Thu Nov 20, 04:42:00 AM:

Not to selectively/politically pick on any industry, frame it in national strategic interest terms. Tax any imported fuels on an equivalent energy basis- we don't import coal, but leave the tax on the books anyway. Keep imports priced at $90-$100/bbl., minimum. Leave domestic production untaxed- it would be boosted. If it can lower fuel costs below the import cost, great, no more imports. More likely, a steady base price for fuel would make long term planning (like what size car to produce) a lot more predictable. Some specialized cases, like nuclear fuel, could be excepted on a national interest basis. There may be other categories that make more sense to import, but taxing only imports improves long term national defense.  

By Anonymous Anonymous, at Thu Nov 20, 09:54:00 AM:

How about a gas tax in only large metro areas... leave the country side alone?

This would reduce polution and encourage mass transportation along the way.  

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