Ex-Tesla VP Siry calls for either taxing up gas prices or dropping CAFE
Darryl Siry has never been shy about expressing his opinions. Since departing from his post as chief talking head and salesman at Tesla Motors, Siry has been freed up to share his thoughts even more vociferously and with greater frequency on his personal blog and his latest post is sure to anger many people. With gas prices down to $1.86 in Siry's San Francisco neighborhood (and even lower here in Michigan where I saw one station today at $1.49) he tackles two of the most controversial topics among consumers and environmentalists. When Congress was debating a bridge loan deal for GM and Chrysler recently, many were pushing for even more stringent fuel economy standards or even requiring the companies to build all hybrids within a few years. Many of these same politicians were also those pushing for action to lower gas prices when they were at their peak earlier this summer. Siry dares to suggest Congress should either bite the bullet and tax fuel prices up to the $5-6 per gallon or else abandon CAFE altogether. Much to the chagrin of many of the readers here, I've suggested the same thing in the past and still believe this course of action to be the right one. As earnest as many ABG readers may be about getting off fossil fuels and reducing emissions, we must face the fact that the vast majority of Americans vote with their wallets. When gas prices are cheap, they simply do not pay attention to efficiency. If fuel prices don't rise, the extra cost of meeting CAFE will do nothing more than destroy the industry without actually accomplishing the stated goals of reducing fuel consumption.
[Source: Darryl Siry's Blog]
Reader Comments (Page 1 of 2)
jharlan 9:07AM (12/25/2008)
Taxing up fuel prices in a weak economy is insane unless you want an extended depression. This Siry is obviously not an economist. You mess with supply and demand like that and you always end up with an unbalance. Taxing up the prices of fuel might tend to inovate technology, but the unintended consequences might very well be an extended recession in which no one could afford anything! This would drive fuel prices down even further. Not very well thought out, Siry!
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Darryl 2:02PM (12/25/2008)
Actually, I have BA in Economics from Brown University. The logic of "do no harm" because we are in a recession is the type of thing that will worsen the recession. The fundamental reason we are in the situation we are in (massive overleverage) is something that will be painful to correct. It is this "pain avoidance" mentality that is exactly the reason politicians rarely have the courage to do what is right (economically) to resolve problems quickly.
harlanx6 12:16AM (12/26/2008)
I can;t argue with that, Darryl, but the time has past when raising fuel taxes would have been expedient. Our representitive government is supposed to do what the people want, and I am dam sure they don't want to have their fuel taxes raised, but you would raise these taxes against our will "for our own good" huh. A politician can do no good if he is run out of town on a rail.
John D 5:47AM (12/26/2008)
Give me a break, idiot. You've clearly don't understand the concept of a negative externality. The cost you pay for gas does not reflect it's actual cost to our nation (and world) as a whole. True social price of oil addiction = what you see at the pump (private cost) + increased health care costs (due to pollution) + middle eastern "stability" fees (over a trillion U$D last decade) + the countless billions we'll probably have to spend mitigating the effects climate change. Increasing the price of gasoline to reflect the true price of gas, instead of subsidizing it like we currently do, is the most necessary step in making alternatives cost competitive and attractive to consumers.
harlanx6 10:49AM (12/26/2008)
John D. that's liberal elitest crap, and thank God we still have a democracy to protect us from you who feel you know what's best for everyone whether they want it or not. That may sell in the halls of some ivy league university, but out here we have to deal with reality.
John D 3:44PM (12/27/2008)
Sometimes the job of the government, harlanx6, is to save the public from their own stupidity (of which you apparently have quite a bit). You clearly didn't understand a word I wrote, or you would have responded with a logical argument. The sad truth is that the American people are too short-sided to buy more efficient or alternative vehicles just because they burn less gas and pollute less. THIS IS FACT: When gas was about $3/gal consumers stopped buying wasteful SUVs. Now that gas is back down below $2/gal, SUV sales are spiking again. The only calculation they care about when picking between comparable vehicles is "which choice costs less." A gas tax is inevitable and requisite so people start making smart choices, recession or not
harlanx6 10:48AM (12/28/2008)
The first thing you did was call me an idiot, John D, which is what you liberal elitests always do when you are losing an argument, so let me take your points one by one without actually having to call you the pompous ass that you obviously are.
1. Saving the public from themselves. Now there is the absolute height of pomposity. I can guarantee any politician who advocates raising fuel taxes will be turned on and taken out with venomous hatred by the electorate, which is their right, and in fact their duty. Raising taxes reduces taxable income, which reduces government revenue. Who in their right mind is going to step up and sacrifice themselves? You? Besides, it just doesn't work.
2." People are too short sighted to buy alternative fuel vehicles". The fact is, people want to get away from petroleum powered vehicles as soon as they become economically viable, and that time is coming soon, but those vehicles are just not available yet, or the ones available are not attractive enough for various reasons. The government needs to subsidize development of alternative energy sources, not raise the taxes of poor people trying to get to work with older cars, which is exactly what you are advocating. Most of us are not ever going to buy another gas guzzler, and we are putting off the purchase of a car until the manufacturers offer us something clean and economical. Right now all I see coming is more of the same, with very small incremental improvements in economy. The minute you elitests get the economy moving again fuel demand will get the prices over 3 bucks in a heartbeat. These low oil prices are extremely temporary. We are going to shift from a petroleum economy, and that is certain, but not because it is the right thing to do. We will do it because it will be the economical thing to do. Alternative technologies are advancing on all fronts, and petroleum will continue to get more expensive to produce. There will be a crossover point, but maybe not soon enough to satisfy you.
I think you will find your friend Siry has a personal axe to grind here. He is involved some way in the development of alternative energy vehicles, so his own fortune would be enhances by the government forcing people into them. Maybe he is writing a book he is trying to sell (like Al Gore).
By the way, I don't think you will find people not interested in alternative energy sources reading AutoblogGreen.
Tom P 10:41PM (12/31/2008)
There is something called easticity of demand. Adding a user tax at these lower prices makes a great deal of sense. Fiscal policy could easily correct for any negative impact on business policy or lower income individuals.
jharlan 11:46PM (12/31/2008)
You know, fuel demand was supposed to be inelastic way back when I took economics, but I think that has been discredited. You guys with all the answers should turn your attention to getting the economy going again, because that would cause demand to force the fuel prices up to where you would like them to be without heavy handed and might I say extremely unpopular heavy handed government action. You may be economically secure, but the vast majority of the people (who by the way have voting rights) are struggling to achieve that same economic security and if you raise fuel taxes, we the poor stupid voting people will be livid with you! You just don't get it, do you. There are things you can't do without unintended consequences, and raising fuel taxes is one of those things. You probably work with and talk with people who believe the same as you, but it might do you well to get a broader perspective.
Throwback 9:17AM (12/25/2008)
Another example of someone who is far removed from the real world. Suggesting $5.00 a gallon gas because HE can afford to pay it, is the definition of arrogant. No need to think about all of the people struggling to make ends meet. No need to think about what it will do to the price of everything transported by trucks. All that matters is global warming is the new religon and all must bow down to resolving that. No matter what it does to our economy nor our citizens.
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Sam Abuelsamid 10:55AM (12/25/2008)
Actually a gas tax needs to accompanied by other changes as well. Those most affected by a fuel tax would be lower to middle income people. These same segments are already adversely affected by payroll taxes and pay a disproportionate amount relative to higher income people. Raising the cap on income subject to payroll taxes and then exempting the first $10-15,000 of income would offset the effect of higher fuel prices. It would also help address the coming shortfalls in the social security and medicare systems.
Mike Z. 12:17PM (12/25/2008)
Sam:
Payroll taxes are meant to fund government retirement programs (Social Security and Medicare) and the benefits out (in Social Security anyway) are about what that a person paid in.
When you lower the rate for low income individuals pay to these programs they fundamentally change from a retirement plan that pays out approximately what is paid in, to a retirement system where the poor return on the backs of the more well to do.
Surely, this is not the intent of the program.
quixote 9:21AM (12/25/2008)
You're aware of being in good company, right? Tom and Ray Magliozzi of CarTalk suggested taxing gas up to $6/gal ages ago. (I yr? 2 years? 3??) They weren't trying to be funny, either.
It's still a good idea and the right thing to do. Although I agree with jharlan that we ought to give a nod to the economy and start by taxing it up to $4 or so.
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Mike 9:54AM (12/25/2008)
Lets be honest, we cant just keep printing money for our current problems. If we start taxing gas and not diesel the impact on goods transported by trucks would be small. We do not have to tax the price up 4-5 gal now, Add a dollar year untill we get to the number wanted, earmark the earnings to pay off some of the national dept. As a matter of fact demand the only thing this money would be used for is paying off the national dept. We are currently paying billions PER DAY in interest alone. That money could go along way to create permanent jobs.
Mike!!ekiM 10:50AM (12/26/2008)
Tom and Ray, just proposed last week, a 50 cent tax on gas. And funding to go to an intra-city high speed rail system.
You know, it sounds good to me. With the airlines running their business like a bus company it's time they got some competition.
Throwback 10:08AM (12/25/2008)
I'm sure the Government would only use this tax money for paying off the debt, it's not like they add earmarks to bills now. Why should drivers of gas powered cars be singled out as the official debt payers?
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mike!!ekiM 11:06AM (12/25/2008)
To make some real progress to stop global warming?
Or, we could just shut down at least the biggest most polluting coal power plant and replace that power with solar, wind and geo-thermal.
Two Trillion Tons of snow have been lost at the north pole. Soon, Santa won't have a home.
ziv 10:51AM (12/25/2008)
Adding a hefty gas tax now is not a good idea, but enacting a law that says starting in 2010 there will be an additional 10 cent tax on every gallon of gasoline sold if it retails for less than $2.00 a gallon, and then raising the tax by another 10 cents in 2012 if it is below $2.10 and again in 2014 if it falls below $2.20, now that might work. And when gasoline goes up above $2.20 a gallon the tax goes away, but the realization that cheap gas will never come back would spur the purchase of more fuel efficient cars, which would reduce demand which would, slightly, reduce the cost of gasoline. We probably have another year of cheap gas, maybe less, tho, so the point is probably moot, but it would be helpful to convince people that cheap gas is definitely not coming back.
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Pete J 11:05AM (12/25/2008)
I agree that the present time is delicate for the economy and all of our limited incomes -I worked for the big 3 and now will live on less than 1/3 of my former income.
But the best way to cut energy usage would be an energy policy! Limit the amount of fuel used with a group of sticks and carrots that account for number of drivers, miles driven and fuel economy. I advocate a pump tax that is rebated up to a certain number of gallons per driver that is targeted by the national fuel usage target. A person could decide to drive a Hummer if she drove only 3,000 miles a year for example, but would need to get a Cobalt if he drove over 30,000 per year.
Here's how to do it: If the number of drivers on road today in the USA could meet our targets by getting an average of 25 MPG and not driving over 10,000 miles, we allow them 400 gallons(10,000/25). We put say a $2 gallon tax at the pump and rebate them the first $800 ($2X400gal).
This way only people who used more energy would pax tax surcharges but everybody would be reminded of energy usage at the pump.
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Scott 11:12AM (12/25/2008)
Why is it that the solution to all problems is always raise taxes? Aren't we paying enough? At this point in time we may want more efficient vehicles and we were on the verge of getting them. We will get them, but when people want them for very selfish reasons: to save money. Putting more money in the hands of the bums in Washington is not a good long term solution.
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