Thinking the unthinkable: Raise the federal gas tax
Consumers are enjoying the lowest retail gasoline prices in years, a welcome ray of light in an ever-darkening economic picture.
That’s good news for financially strapped American families and for the domestic auto industry, which has struggled to produce the high-mileage vehicles consumers wanted when gas prices spiked at more than $4 a gallon over the summer.
But in the long run — as difficult as this is to accept — low gasoline prices hurt America more than they help. They encourage continued reliance on gas-powered vehicles and harm efforts to curtail carbon emissions that contribute to global warming. They discourage research into new, nonpolluting transportation energy sources — the single greatest technological challenge of the 21st century.
Consider what happened during the early 1980s, when gas prices soared to the then-unheard-of price of $1.38 a gallon. It triggered a surge of research into alternative energy sources such as solar power and electric vehicles. But as soon as prices began to drop, as they did in 1982, so did the rush of investment and research into alternative energy.
Adjusted for inflation, that previous average high gas price of $1.38 was the equivalent of $3.14 a gallon. We didn’t see average retail prices that high again until this year.
But when gas prices and investment in alternative energy fell in this country in the 1980s, they didn’t drop everywhere. In Europe and in Japan, high gasoline taxes kept fuel prices relatively high. That encouraged conservation and provided investors with greater confidence that the money they pumped into developing new technologies would earn an acceptable return.
The result was that Japanese car companies were the first to market new hybrid cars, and European companies led the way in producing new, cleaner diesel vehicles. American car companies, meanwhile, kept churning out large, gas-guzzling SUVs.
After years of failed attempts to increase mileage requirements for new cars — efforts steadfastly opposed by American auto manufacturers and their unions, Congress finally succeeded last year. As a result, U.S. cars must average 35 miles per gallon by 2020. European cars, in contrast, averaged 38 miles per gallon in 2006.
If increasing mileage standards has been difficult, hiking gas taxes has been unthinkable. Although the idea is floated occasionally (most incongruously by then-Rep. Dick Cheney in the 1980s, who supported a plan to tax imported oil), it never has received a serious airing. It should.
The nonpartisan Congressional Budget Office reported in 2004 that increasing the federal gasoline tax — which has been 18.4 cents a gallon since 1993 — would reduce consumption faster and at less cost than increasing mileage standards.
Obviously, it would not be painless. Consumers would be paying significantly higher prices, and the federal Energy Information Administration predicts that as the global recession abates, gasoline prices will resume their upward climb.
But the impact of higher gas prices could be offset somewhat by reducing other taxes or through a federal income tax rebate. In the meantime, it would reduce gas consumption significantly.
That would help undercut the financial strength of such countries as Iran and Russia that, armed with a surplus of petrodollars, have been unfriendly to American interests. And combined with other tax incentives, it would encourage U.S. investment in energy alternatives.
The nation that succeeds in developing and deploying new, green technologies will have a major economic advantage in the decades to come. It’s crucial that the United States be that nation.
Congress should raise the federal gas tax and push America toward innovation and energy independence.
I can only pray that the Obamanation raises taxes a lot on gasoline. By the way, could you tell me again what Al Gore did for the “green” movement which started in 1972 while he was VP from 1992 - 2000?
Stoooooooooooopid. How can these idiots on this editorial board complain about greedy oil execs on one hand, then propose that the greedy government take from your pockets instead? I think they need to raise the tuition for journalism school to encourage better knowledge consumption.
This time the board is right on. Many of our citizens don’t care too much about the air we breathe. But when gasoline costs us around $4 per gallon, we need to “stop our dependence on foreign oil.” It’s too bad that when gas is really expensive (in dollars), most of the citizenry agree with the environmentalists that we should investigate other souces of propulsion.
So, it’s in our best interest to pay more for gasoline? America has to be pushed toward innovation? Give me a break, stop being so condescending.
Here’s an idea, take the money you are currently saving with the low gas prices and instead of offering it to the government, put it toward your retiree’s pensions (your coverage on that story isn’t exactly costing you much in ink now is it?)
Printed newspapers are costly, inefficient, bad for the environment, and technologically obsolete. Better alternatives already exist, including web distribution, and portable electronic devices like the Amazon Kindle. Some of our nation’s leading papers, such as the New York Times, Washington Post, Wall Street Journal, Chicago Tribune, and LA Times can be obtained through a Kindle subscription.
The problem is, too many people are wedded to the old “dead tree” model of newspapers. The toll on our forests and landfills is significant, not to mention the contribution to global warming made by manufacturing and distributing printed newspapers. I suggest imposing a 50 cent per copy federal tax on printed newspapers. We could use the revenue generated to provide subsidized internet access for poor people so they could read the paper online.
Typical government worship by the PD editorial board. Have the government manipulate the once free market even more. Then, blame the former free market for economic woes and hold bigger government up as the solution to all our problems.
Well the government educated public has fallen for the propaganda for generations. So, bring it on. Some day folks will do the math and figure out that big government and social engineering are destroying our economy. When the tax payers have been bled dry who will bail out the bankrupt government? Do the math.
A few other suggestions I forgot about:
1. The feds should set a target for what percentage of readers are online or other paperless methods.
2. Newspapers which fail to meet this target should pay a penalty.
3. The EPA should commission a study to determine the total environmental impact of printed newspapers, and the benefit of changing all readers over to non-printed delivery. Newspapers should be forced to print a summary of this study on the cover of each paper.
4. Television and radio stations could run PSAs … “Get the paper out of your newspaper.” Of course, you couldn’t blame the television stations if they suggested you watch their news program instead of reading the paper.
If the goal is to encourage alternative use of transportation technology, a gas tax is the most efficient way to do it. The editorial doesn’t have enough space to do the idea justice. For one, using fossil fuels like gasoline clearly has costs that aren’t accounted for in the cost of production–pollution, scarcity, and payments to foreign governments that hate us are among them. The only cost we try to account for with the current fuel tax is the cost of building roads to drive on. A Pigovian tax helps reflect the cost of these additional externalities in a much more efficient manner than ridiculous, half-wit ideas like the CAFE fuel economy rules.
Secondly, the government is not well set up to manage something like developing green energy. It’s not a nimble body–it is not currently set up in a way to react quickly to technological developments. Combine that with Congress’ love of wasteful spending, and our current green research tends to emphasize boondoggles like ethanol that clearly are just tax subsidies and not solutions. Raising the cost of fossil fuel based energy makes it much more cost-efficient for private enterprise to implement alternative energy strategies, such as using clean technology or improving the energy efficiency of its operations.
A gas tax should only be a component of the US energy policy, though. Gasoline is just a piece of the problem–it’s naive to believe that natural gas is a real long-term replacement for gasoline. Instead, we should implement a carbon tax. This tax would force our economy to recognize the true cost of using fossil fuel energy.
A#–this is the position of most major economists–Democrat or Republican. The whole point of government regulation is to counter the downsides of an uncontrolled market, such as the development of monopolies or the inability of a market to include the cost of externalities in the price of a good or service. The current price of gas does not reflect its true cost to our economy.
Paul, you need a bit of learning. Increasing the gas tax is only accomplishing three things — it is putting more of a burden on the general population (dumb to do that in a recession); it is putting more of a burden on corporations who will pass that cost to the general population (dumb to do that in a recession); it is getting the greedy government more money to waste.
A carbon tax is an even more stupid idea. That will hit companies hard (like the auto makers) who will either go out of business, or pass the cost to consumers. Add to this the fact that you do not even know if carbon is really a bad thing for the environment. You are just spewing out the speculation of those who do not really have proof.
So how is the best way to achieve your goals? The free market, and a grass roots effort. The high gas prices this past couple years got a lot of Americans thinking. Some are no longer thinking about conservation, but many have seen the light and will make changes. I am one of those people. People need to use less. They need to look for more efficient ways to go about their lives. Keep drumming that message and you will get more converts.
What can the government do that will not be harmful? Continue the “green” tax credits. Reward people/companies for conserving rather than punishing them. People get greener, get money back, and the government is less involved.
Spoken like a true Liberal editor. Never saw a tax you didn’t like. The economy is in the dumper and you want to increase the tax on gas!! You’re not very bright are you?