Council on Foreign Relations calls for higher gas tax
A report from Council on Foreign Relations calls for the U.S. to raise gas taxes in effort to curb oil demand. Such a move would also help the country formulate a better foreign policy.
A nonpartisan group of industry and government experts put out the report that urges Washington to introduce a "substantial federal exise tax" on gasoline and tighten the CAFE standards. John Deutch, a former director of the CIA and task-force chair said, "You can't simultaneously enjoy abundant energy, low-cost energy, and energy that comes from other parts of the world."
There is no suggestion on how the gas tax should be set, but estimates say a $1 per gallon would reduce demand by 3-6 percent over the first few years. The U.S. currently claims 25 percent of the world's oil consumption even though it has only 4.6 percent of the world's population. The country imports 60 percent of its oil, which puts the U.S. in stiff competition with other growing importers such as China and India. Two-thirds of the oil used in the U.S. is for transportation, and 60 percent of that is used for personal vehicles.
If memory serves, didn't Lee Iacoca suggest a 50-cent gas tax in the '80s but Pres. Reagan rejected the idea?
[Source: Reuters]
Reader Comments (Page 1 of 1)
Paul 2:12PM (10/13/2006)
Well, Mike, there you go again throwing politics into the mix. So I'll bite. I don't know for sure, but likely Reagan likely did reject gas tax hikes. Clinton did, in fact, propose hikes. Perhaps such a hike may curb consumption, but who's really going to pay? Well, everyone, but who's going to suffer? The poor.
As with any consumption-based tax (vs. income or luxury), it is the poor who bear the brunt of penance. For the poor, the percentage of income (often not discretionary) tied up in gasoline consumption is far higher than for the middle-class and above. Middle-class folks may have to cut back on discretionary driving and perhaps buy an iTune or two less, but the poor (say a house keeper earning $50-$100 a day and spending a fair portion of that traveling from home to home to do their job) may have to cut all discretionary driving and stop eating meat. Significant tax hikes on gas consumption simply can't pass through the political process without being derailed by this (very valid) argument.
Better solutions are stricter mileage restrictions and tax incentives for high mileage vehicles. And of course, alternative fuels (and significant governmental incentives for their development and distribution)
Once again, please try and keep political quips out of these posts. Everyone on this site wants to see reduced fuel consumption for their own reasons. You have the right to opine, but expect distaste and perhaps defection to other sites if you keep this up...
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charlie 2:36PM (10/13/2006)
I agree with most of what you said Paul, but after years of thinking about the problem, I've come to the conclusion that none of the traditional solutions- higher gas taxes, subsidization of specific alternative fuels or specific technologies (such as hybrids), will ever significantly change our patterns of consumption.
If we really care about reducing consumption (and I'm not saying we necessarily do, theres plenty of fossil fuel left in the world) then what we should be doing is using government policy to encourage smarter, more urban development.
When people live in closer proximity to their jobs, where they buy things, where their kids go to school, etc, less energy is needed to move them around. Further, once you reach a certain population density, public transportation becomes an option, which significantly increases the energy efficiency with which people can move from where they live to where they need to go.
I live in the suburbs. I have to drive my kids to school, I have to drive to the downtown area of my suburb, I have to drive to the drugstore or grocery store, I have to drive to the mall or strip malls to buy things, I have to drive to work, and if I'm going to downtown chicago, 99% of the time I'll drive because I'd have to drive to get to the train station, which during off-peak hours only has a train every hour and a half anyway that takes an hour to get downtown.
The way we consume energy with our suburban way of life is always going to be significantly higher than if we changed the way the average american lived to a more urban setting.
Some policies that could encourage denser development and less sprawl might be replacing certain federal taxes (such as the income tax, capital gains taxes, and/or corporate profit taxes) with a nationwide Land Value Tax. Further, we might like into accompanying that LVT with a federal resource extraction tax (taxing people for mining resources such as coal, natural gas, copper, etc) based on the market values of those resources. So that domestic businesses aren't unfairly punished, we should set tariffs on incoming goods to reflect those taxes. As it works now, companies are essentially paid by the government to extract resources, which encourages overproduction and artificially low prices.
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