Did I hear right?
Gasoline tax proposed
Earlier this month, John B. Hess of Hess Corp. said the U.S. should consider imposing a $1-a-gallon gasoline tax and boosting the average auto fuel economy standard to 50 miles a gallon to help avert a global energy crisis.
One unavoidable warning message: if John Hess says gasoline prices are headed up, they probably are.
“As demand grows in the next decade, we will not have the oil-production capacity we will need to meet demand. . . The $140-per-barrel oil price of three years ago was not an aberration — it was a warning.”
But maybe Hess is signaling something positive too. Could this be the tipping point for Congress to do something about a coming energy shortage? If Hess, along with the Pentagon and other serious planners, say we won’t have enough oil, can policymakers be far behind?
Well yes, when it comes to scientific and economic projections, legislative policy in Washington can be up to 4,300 years behind.
But Hess’ proposal may be the politically acceptable first step towards lowering energy demand and encouraging alternatives more broadly. Cap-and-trade may be dead, but there are other ways to raise the cost of energy – artificially and gradually – giving the country advance incentives to change our technology, habits, and expectations. (Don’t hold your breath. Hess also said he thought that the country should not debate energy taxes “until the economy’s growing and people are put back to work.”)
My bottom line: a gas company CEO is telling us that the price of gas is going up and, if we continue to use the same amount, it’s probably not coming down again. When the science and economics on important issues like this is in dispute, I keep looking for unprejudiced sources, and I think Hess is one. I can’t see how a company trying to reduce the price of its product hurts me. What am I missing here?
Whatever happens in Washington, it’s a good thing we’re working on all those ways to reduce our dependence on energy at home!
I’m not opposed to a big $1 per gallon gas tax. And I also support as a conservation and moral measure the immediate withdrawal of US military forces and cessation of all military exercises and “intervention” from all of the illegally, immorally and unconstitutionally invaded, bombed and/or occupied countries (Iraq, Afghanistan, Libya to name a few). The US military, in 2004, used 395,000 barrels of oil per day, or 2% of the United States petroleum use of 19,650,000 barrels per day.
David,
There is a fundamental problem that everyone recognizes the price of petroleum is way too low but so called “leaders” are also afraid that raising the price in any meaningful way is politically impossible.
Two basic reasons for the timidity and complete lack of leadership:
1) Nobody is really addressing either the moral and practical cost of our prolifigate waste of oil. We are stealing from our grandchildren. We have burned through more than half the world’s known reserves of petroleum in less than 150 years with the pace of consumption increasing continuously. Those resources took hundreds of millions of years to form. So the fundamental economics on this consumption are off by a factor of a million or so if we want to put anything like a real cost on the replacement value of what we are consuming. We price the stuff basically at the cost of extracting it from the ground profitably. We put no real value on the incredible resource of petroleum itself, or on the damage that wasteful burning of petroleum involves.
2) The other issue is suggesting yet another tax is a non-starter because nobody trusts the government to do anything but waste whatever money they are given. So the natural reaction is not give them more. So the discussion has to be reframed. Let’s not add taxes, lets shift taxation away from discouraging productive activities like work and investment, and instead use the tax system to discourage waste. (Yes taxation does discourage whatever is taxed)
It ends up we could completely replace every other current source of funding for the federal government with a petroleum tax for just a little more than Europeans pay for gas today. And they have crazy high taxes on top of their higher energy costs. We could make America more competitive. But in order to sell the deal, it has to be a clear trade: End the stupid taxes we have now and replace them with sensible tax policy. But anyone asking to just add more taxes is not going to win.
More on all of this stuff here: http://emergingconsensus.wordpress.com/2011/03/19/a-new-tax-policy-for-the-21st-century