The Public Policy
The Times’ Gas Pains
Those who drive, drive. Those who don’t, tax.
Unhappy that we’re no longer paying $80 for a fill-up, the New York Times wants to get the price back up to $4 or $5 a gallon by way of a hefty hike in federal taxes.
The problem, according to a recent Times editorial, is that “President-elect Barack Obama and the Democrats in Congress seem to have a clear vision of the auto industry they think the country needs,” i.e., car companies that produce “highly fuel-efficient, next-generation vehicles.” But the American public might not buy those government-commanded vehicles if gasoline is too cheap.
So to “help the nation cope with climate change and finite supplies of oil,” the answer at the Times isn’t to increase oil supplies by removing Times-supported restrictions on domestic drilling, or to determine if the science behind global warming is suspect, or to ascertain whether the alleged warming is even man-made or, more particularly, car-made.
Instead, the Times wants a new $2- to $3-per-gallon tax on gasoline and offers two methods. First, federal planners could “devise a variable consumption tax in such a way that a gallon of unleaded gasoline at the pump would never go below a floor of $4 or $5 (in 2008 dollars), fluctuating to accommodate changing oil prices and other costs.” Second, the Times points to Harvard economist Robert Lawrence’s proposal to put “a variable tariff on imported oil to achieve the same effect.”
Either way, the Times is proposing a huge jump in the current federal tax on gasoline of 18.4 cents a gallon. Here in Pennsylvania, home ground of many who picked up their revolutionary muskets to liberate themselves from excessive taxation, there’s an additional 31.1 cents per gallon in state gasoline taxes.
“If gas stays cheap, Americans would be less inclined to squeeze their families into a lithe fuel-efficient alternative,” warns the Times. “Americans did not buy enormous gas guzzlers just because Detroit marketed them relentlessly. They bought them because they wanted big cars — and because gas was cheap.”
What matters, in short, is not what we want but what the Times thinks we need.
To help lessen the burden of their proposed increase in gas taxes, a regressive levy that hits the poor more than the rich, the Times says that “fuel taxes could be offset with tax credits to protect vulnerable segments of the population.”
And who decides who’s “vulnerable”? The same politicians who, seeking new targets for taxation during the presidential campaign, defined “the rich” as any family earning more than $200,000, and then $150,000, and then $100,000?
In deciding in central planning who is “vulnerable” enough for a tax credit, will a $30,000-per-year carpenter who needs a truck for work get more money back than a $30,000-a-year store clerk who can get away with driving a little tin can to work? Will we have to send in our mileage and gas receipts to get reimbursed?
Will a bachelor landscaper lose his gas-tax credits if he marries a rich perfume designer? What if he marries a lottery winner and she’s a one-hit wonder?
And what if we live an hour or two from work — not like those guys at the Times who ride five blocks in a cab from their Manhattan condos to the office? Do we get extra tax credits if the driving is work-related as opposed to just driving around at night listening to Jay-Z?
What about two fatties who get fewer miles per gallon than one anorexic? Should an intelligent gas policy punish those who are doing more than their share to keep people employed at their local bakeries?
Personally, I’d like a gas policy that’s less punitive, such as drilling off Nantucket or making the grill on an electric car out of hundreds of little chrome fans so that the battery would automatically recharge while we’re driving, or using part of Obama’s proposed $1 trillion in infrastructure spending to build a bullet train that’ll get us from Pittsburgh to a bar in Greenwich Village in an hour (the new French TGV train smashed the world’s speed record last year, hitting 357.2 mph, nearly half the speed of sound).
And who’s going to figure all this out? Nancy Pelosi and Barney Frank, the same people who thought that the best way to get people into their own homes was through no-income, no-assets loans?
About the Author
Ralph R. Reiland is the B. Kenneth Simon professor of free enterprise and an associate professor of economics at Robert Morris University in Pittsburgh.
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Jason | 1.9.09 @ 6:44AM
Oh my head hurts... the bureaucrats are going to kill us with their machinations.
http://www.rightklik.net/
Deborah | 1.9.09 @ 7:25AM
What has this country wrought by electing idiots to screw up our country? I'm sure the NY Times has no hidden agenda. They're only trying to help. I guess the communist march through the institutions of the United States has been completed with the election of Obama and the current leadership of the Democrat Party. Who ultimately won the Cold War?
C. Vail| 1.9.09 @ 7:36AM
Less than two months ago Charles Krauthammer also argued for a hefty federal gas tax increase, as others have done whenever prices were so low that wasteful driving and the purchase of wasteful cars was encouraged. It seems to me the argument makes sense, if we're serious about breaking our dependence on foreign oil and developing more fuel-efficient means of transportation. So just because an opinion emanates from the Times does not necessarily make it a bum idea -- likely more often than not, yes, but not necessarily.
Deborah | 1.9.09 @ 7:51AM
Yes, I read the Krauthammer piece and decided he was out of his mind as well. Like Mr. Reiland suggests, this punishes those who don't live in the city and actually need their cars to get to their jobs. No where is it ever suggested that we might actually drill in this country and help ourselves that way. The first reaction is to always raise taxes. This just complicates what is already an outrageously complicated tax system and will put more power in more corrupt politicians' hands. First, do no harm! Let's do what's right -- find our own resources while we do the necessary research to continue to do what's right -- find more fuel-efficient means of transportation. The problem always is we "do" before we "know" the best way to proceed.
JP| 1.9.09 @ 8:08AM
Oil is bought and sold on the world market. Even if the US adds another 2-4 million of barrels a day to the supply chain, the drillers must sell thier oil (normally to commodity brokers/speculators). Whether the buyer is American or foreign makes no difference to the producer. The Federal Goverment could impose regulations that force producers to sell to American only consumers, but then you would be hard pressed to find anyone willing to drill or explore US oil. Who in thier right mind would invest in a market where 90% of the consumers are off limits? If there were no limitation, then nations like China could just buy up all excess oil futures, and again the US would be importing its oil from Canada, Mexico, and Saudi Arabia.
The question then comes around to alternatives, and nuclear power is on the only viable one. About 55% of our oil consumption is used to generate electricity. We import 65% of our oil capacity. Additional nuclear power plants could reduce our oil imports back to 1993 levels (45%). The start up costs would be high, but it is easily doable. All over alternatives are pie-in-the-sky pipe dreams. Wind power could require over 100,000 new wind mills. But even at the number, our oil consumption would not be reduced by more than 5%. Solar and geothermal are also pipe dreams. Coal and nuclear power are the only 2 alternatives we have now. They are also 2 alternatives the liberals do not want to investigate.
C. S. P. Schofield| 1.9.09 @ 9:08AM
The core of the proposal is the peculiar idea that adding a layer of taxation and bureaucratic nattering to a problem constitutes help. Of course, even if such a proposal starts out ideally designed to suit existing circumstances (a BIG if), it cannot possible be adjusted to changing conditions fast enough to keep up with the real world.
The Times makes the all too common mistake of thinking of the Government as a tool chest of infinite size, filled with the right tools for every possible occasion. History seems to indicate that, to the contrary, the Government is much more like a large spiked mace; useful for dealing with outbreaks of fascism in Europe or the Middle East, but no good at anything that requires subtlety.
Anthony| 1.9.09 @ 11:31AM
This relentless socialist march must be stopped by us. This insanity is reaching a tipping point that America will never recover from, or, will take generations, assuming we survive as a nation. The insidious desire by the Left to control all aspects of our lives, through their social architecture, has reached critical mass. When conservative intellectuals, like Krauthammer, who seems to have strayed once again, buy into this trap, we are indeed in a fight for our very survival as a constitutional republic.
Jeff| 1.9.09 @ 12:26PM
Raising the price of fuel only affects your driving habits, correct? Wrong! Everything is driven by the price of fuel/energy. Fuel prices affect farmers growing, harvesting and transporting crops. Do you think the grocery stores won't increase their prices. While they're at it they should dramatically raise the price of coal through carbon taxes and drive all the remaining heavy industry, such as steel mills, overseas too.
Marc Jeric| 1.9.09 @ 12:34PM
The animosity by government beuraucrats and university professors toward private enterprise and free markets is easily explained - they are by large majority rejects of private enterprise. You see, those people do not like risks on one hand, and on the other they like to exercise command over us. The socialists of our Main Stream Media of course support them.
dgdc| 1.9.09 @ 2:46PM
For a more reasoned view refer to the January issue of the weekly standard. I'm afraid the spectator's journalistic standards are falling
http://www.weeklystandard.com/Content/Public/Articles/000/000/015/949rsrgi.asp
DSammis| 1.9.09 @ 4:49PM
Most people harping about solving our dependence on oil, or foreign oil through "alteratives" seem to not know much about what's in a barrel of oil, Crude , that is. First gasoline, second diesel, third jet Fuel, fourth, distillates, lubricating oil, feedstock for chemicals, kerosene, and on and on and on down to tar from which we make roads. To eliminate our use of crude oil will have enourmous impact on literally hundreds of other industries and uses.
Jeremiah| 1.10.09 @ 1:26PM
Low oil prices in the nineties prevented us from doing the difficult work of becoming energy independent.
Gas taxes in effect keep money in the United States that is otherwise sent to Iran, Saudi Arabia, and Russia when oil prices spike.
Gas taxes also create a "floor" that spurs investment in other energy technologies and keeps prices stable to encourage investors.
Ever wonder why gas prices are now what they were when Bush took office 8 years ago, or why they were more than twice what they are now last summer?
Does it occur to you that maybe more than just market forces are at work?
No... it couldn't be!
Gas taxes are patriotic.
And by the way. Urban people who rarely drive bear enormous tax burdens on behalf of those who do. Per capita urban people pay much higher tax bills than rural, white, "red state" America. That money is used for all kinds of spending that benefits those who drive to work. (Not to mention the 2 trillion dollars that Iraq has cost us.)
Deborah | 1.11.09 @ 7:21AM
Hey Jeremiah -- Could you please enlighten me? Which taxes are you referring to?
"Urban people who rarely drive bear enormous tax burdens on behalf of those who do."
Jeremiah| 1.11.09 @ 8:10AM
Deborah --
People who live in NYC or Boston never dreaming of owning an automobile (because public transit is more convenient) still pay enormous amounts in taxes that are then spent on highways, bridges and subsidizing the oil industry.
The point is that gas taxes and tolls don't come close to paying for what automobiles actually cost; that requires a large share of other forms of taxation.
Another point worth remembering is that the more urban "blue states" pay a higher share of the tax burden than the "red", while the "red" receive a disproportionate amount of government spending (and then tell us all how much they hate taxes). Real America indeed.
Deborah | 1.11.09 @ 1:13PM
Okay, Jeremiah, I don't know whether your statement is true or not about taxes for highways, bridges etc., but those in your state who drive cars also subsidize your public tansit (and I'm sure federal taxes help subsidize it as well). I know we taxpayers subsidize Amtrak. So, I guess we can have a spitting contest here, but since I don't have the facts at my fingertips I can't rebut your claim.
However, if you could show me where the red states receive a disproportiate amount of government spending, I'd be interested in seeing which ones etc. Thank you.
Marc Jeric| 1.11.09 @ 2:37PM
When the global cooling panic of the 1970's was shown to be a scam, our revolutionary marxists invented global warming hoax of the 1990's. What with the 11 years and counting of substantial cooling, we now have a climate change flimflam. In the meantime Russian scientists foresee a new 120,000 year-long ice age. Ah, all those government-paid "scientists", most of them rejects of private enterprise - what shall they do without all those government grants? And if the new ice age is coming - should we go back to huge gas guzzlers?
Nick | 1.15.09 @ 2:22PM
I am completely in favor of alternative energy and believe that one day the government will need to replace the gasoline tax as vehicles are becoming more efficient and tax revenue intended to fix roadways and bridges is lowering in comparison to the amount of miles traveled per gallon sold.
I think taxing vehicles that do not use gasoline or putting extra taxes on vehicles would be counterproductive in moving us away from dependence on foreign oil.
Rather than taxing miles driven, I believe it would be better for the government to raise the tax on gasoline. States should look at a percentage gasoline tax, especially while the price of gasoline is "low". Then as the economy strengthens and gas prices increase, so will state revenue from gasoline taxes. This will reward efficiency and create a tax that will not hurt economic recovery. www.regular87.comtext
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