Friday, February 25, 2011

$1/gallon gasoline tax


I know that this opinion would be fiercely opposed by the general U.S. public (and possibly by my distinguished blog colleagues), but I whole-heartedly agree that a $1/gallon gasoline tax as discussed by Thomas Friedman should be implemented (gradual increases of 5 cents per month beginning in 2012). Not only would this money go towards paying off the deficit, but it would also force Americans to rethink their gasoline consumption, thus leading to more use of public transportation, fewer cars on the road, lower CO2 emissions, and a decreased dependency on foreign oil (which is finite and the root of many US problems). This gradual weening off of oil dependency will do the population much better than the sudden increases in price and decrease in availablity we will see in our future if we don't change our consumption practices now. Friedman is on point when he says:


"With one little gasoline tax, we can make ourselves more economically and
strategically secure, help sell more Chevy Volts and free ourselves to
openly push for democratic values in the Middle East without worrying
anymore that it will harm our oil interests."


Our dependency on foreign oil is, well, disgusting. We are sitting back and turning a blind eye to the human rights violations take place every single day: women aren't being treated equally, corruption is everywhere, no one is being properly educated, and dictators are taking advantage of their citizens just because we want these countries to keep providing us with the oil we need to drive our cars to McDonalds drive thrus every day. Let's raise gas prices to levels they ought to be -- it will help reduce the deficit, lower CO2 emissions (with fewer cars on the road), and will reduce our dependency on foreign oil --reduce our need to suck up to countries that are violating basic human rights to their citizens.

I know I'm a tree-hugging liberal hippie so I'm ready to be attacked...

9 comments:

PBM said...

I agree that this is a good idea but have concerns about how it would effect our economy. Don't mean to sound like a Republican but gas is essential to everybody's lives whether we like it or not. Increased gas prices would make food, transportation and many other goods and services more expensive. It would also leave people with less money to spend on other things (and less money to stimulate our economy with). This would be especially dangerous when our economy is already struggling to recover. I think in the long-term this would be great but it would require a lot of pain in the short-term. Luckily for you and Thomas Friedman though, gas prices are rising dramatically right now, and if they stay high, the effect would be the same as a this proposed tax.

TJE said...

I suggested such an idea in an earlier discussion. I might phase it in a bit more gradually. Other taxes could be adjusted to lighten load on lower income Americans. I might borrow an idea from the Gipper: Turn over all proceeds from gas tax to the states. In return, federal government would recede from a variety of policies to begin the process of sorting out the functions of federalism

TJE said...

Comparison of US gas taxes with those of other nations:

http://conservationreport.com/2010/07/17/taxes-raise-the-gas-tax/

PBM said...

Obama proposed $500+ billion for transportation and infrastructure but has yet to identify how he will fund that. AFL-CIO and Chamber of Commerce appear to be open to gas tax, but will Obama get behind it? Looking at his past interaction with controversial proposals, it is highly doubtful. In the words of Sarah Palin, I think Obama needs to "Man Up!"

Roxanne said...

Gas is essential to daily life but the (gradually) heightened gas prices would encourage people to seek other forms of transportation -- carpools and rideshares might become more popular, people would think twice about making unecessary trips back and forth. I'm not sure public transportation would become more expensive -- these services would have more customers, thus increased revenue and the customers themselves would be actually saving a lot of money taking the bus instead of driving their cars which as gas prices/car maintenence/etc stand now is pretty expensive. Demand for more bus/train services would increase and public opinion would hopefully force Obama to "man up" and do something about our transportation system.

Roxanne said...

P.S. Professor - I do realize that I am on the blog a lot today despite my email yesterday afternoon ! Slow day at work today, guess I felt a little overwhelmed when I saw the 500,000 new posts yesterday

Ian Thresher said...

I am not necessarily against this idea, but I do not think it is the cure all you are making it out to be. For one thing, as Peter pointed out, increased gas money means less grocery money. More importantly though the automobile industry employs millions of Americans and a gas tax could have a very negative effect on their jobs. I realize I am saying that Americans should continue to consume, consume, consume with this argument, but nonetheless I do not think it should be overlooked. Additionally, relatively little oil comes to the United States from the Middle East. I do think America has pursued foreign policy objectives that attempt to preserve a steady stream of oil but that should not be construed to mean that Middle East Dictators can somehow hold America hostage. I think the reason we have not come out in full support for Democracy movements in the Middle East is because the Obama administration is too scared to take a firm stance. This fear, however, does not come from oil prices so much as it does from alienating allies in the war on terror and looking foolish on the world stage.

kstill said...

I know this is a little off topic, but i think a more effective way of reaching the same goals would be taxing cars that do not meet certain epa or efficiency guidelines. That way the tax does not hurt the people who are already relying on public transportation and carpools. Then again, this idea would definitely not raise as much money as a 1 dollar tax increase on gas, but it is some kind of medium between a 1 dollar tax and none at all.

Maggie said...

While I like the idea of a gasoline tax, I am also concerned about its potential damaging effect to our economy. Since gasoline is a relatively inelastic good, raising its price to a level great enough to significantly reduce demand would have an damaging effect on the economy of a much greater magnitude . Such a policy would create huge tax revenues, but would also make many other goods and services much more expensive.

But the volatility of gas prices points to another possible solution: a price floor. When gasoline prices are high, no tax will be imposed. However, some economists have suggested that the government set a minimum price for gasoline so that when the price drops below the set minimum, government may "catch" the difference, thus raising tax revenue without damaging the economy as much.

For better or worse, the idea of a gasoline tax (or any tax, for that matter) is still widely unpopular. Thus, as Katherine pointed out, the idea of raising efficiency standards on automobiles seems to be the most likely solution. The current CAFE fuel economy standards are outdated and must be replaced with more stringent ones. The California Air Resources Board has taken the first steps toward this goal by regulating greenhouse gas emissions from automobiles but faced great opposition from the automobile industry, oil companies, and the Bush administration (big surprise there). One major question is whether states have the right to impose stricter efficiency standards than the EPA's federal standard.