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Americans grow up
CBS-Times poll: We reject gas tax holiday
Charles Komanoff, Gristmill
The margin was narrow — 4 percentage points. And 14% of those polled didn’t choose sides. But a CBS News – NY Times Poll released Sunday just might signal the moment when Americans began to grasp the intertwined realities of climate, energy and national security.
[Reuters in] Monday’s Times is reporting:
The [CBS-NYT] poll also found that Americans were divided over one of the hottest issue in the campaign, a gasoline tax suspension. Forty-nine percent think lifting the tax is a bad idea, while 45 percent approve of the plan.
If memory serves, this is the first time in at least a generation that the American public expressed a willingness to be taxed more rather than less for energy.
(4 May 2008)
Clinton dismisses “elite” economists on gas tax plan
Andy Sullivan, Reuters
Democratic presidential candidate Hillary Clinton on Sunday dismissed the “elite opinion” of economists who criticized her gas tax proposal, using a term that has dogged rival Barack Obama in recent weeks.
…I’m not going to put my lot in with economists,” Clinton said when asked to name an economist who backed her proposal.
“We’ve got to get out of this mind-set where somehow elite opinion is always on the side of doing things that really disadvantage the vast majority of Americans,” said Clinton, a former first lady who would be the first woman president.
(4 May 2008)
Why a gas tax ‘holiday’ is a bad economic idea
John W. Schoen, MSNBC
…Q: If the feds can help with cutting interest rates why can’t they do something that really affects everything? Like high prices of gas. How can a billion-dollar industry still be allowed to make so much and affect so many people?
– Lori H., Dodge City, Kan.
There are measures the government could take to ease the pain at the pump, but it’s hard to see how the U.S. government could directly control the price of a global commodity like gasoline – any more than it could limit what you can charge for that big-screen TV you’re trying to unload on eBay. Gasoline prices – like all market prices – are set by a willing buyer and a willing seller. (You may not be a “happy” buyer right now, but your purchases are still voluntary.)
The last time the federal government tried wage and price controls in the 1970s they didn’t work. Refiners chose not to make and sell gasoline at a loss, so there wasn’t enough to go around, and we all had to wait on gas lines.
Today, two of the three presidential candidates – John McCain and Hillary Clinton – have proposed a “holiday” on gasoline taxes. It sounds great, but it’s a terrible idea.
Eliminating the federal tax, about 18 cents a gallon, would encourage more driving, putting added pressure on supplies, and driving the underlying price of gasoline higher. Since gasoline taxes go to pay for rebuilding crumbling roads and bridges, this is probably not a good time to do away with them.
(4 May 2008)
MSNBC producer John W. Schoen has written previously on peak oil. -BA
UPDATE (May 6) Contributor Carl Etnier writes:
I’ve read a lot about the gas tax holiday proposal from an economics perspective, and I never understood it until I drew some supply and demand curves. Text-only explanations just don’t convey how economists think very well.
I haven’t seen anyone else post these curves to explain different interpretations of the effect of a gas tax holiday on oil price.
I wrote a blog post about them at Vermont Commons that might be of interest: Oil prices and leadership deficits
Gas Tax: it’s still time to increase it.
Jerome a Paris, Daily Kos
I argued on this website for an increase in the gas tax 3 years ago. I tried again 2 years ago. Following vigorous opposition by a number of kossacks, the concept was dropped from Energize America as being politically deadly.
I note now that the gas tax holiday is being properly blasted on this site as the insane idea it is. In that context, could we go one step further and actually suggest that increasing the gas tax makes a lot of sense?
(4 May 2008)
The era of cheap energy is over
Lester B. Lave, PhD, Pittsburgh Post-Gazette
We must take bold steps to conserve or we’ll drive prices even higher and send more money to those who would do us harm, says CMU professor
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… How can we cut energy use, increase energy security, reduce pollution and greenhouse gas emissions, and send less money to people who fund terrorists and hate-America campaigns?
Here are three suggestions:
• Raise standards. Congress recently required that within 12 years the average new vehicle attain 35 mpg. The Department of Energy requires that major appliances meet efficiency benchmarks. These and other standards could be stricter.
• Inform consumers. Refrigerators, air conditioners and other major appliances are labeled so that consumers can purchase the most energy-efficient models. They should be more ardently encouraged to do so.
• Impose taxes to raise energy prices. Raising taxes is never popular, but the first two approaches have proven insufficient.
Energy prices are going to rise no matter what we do. We can either use taxes to promote conservation or end up paying more anyway by driving up demand for energy to appease our ever-growing appetite. One way we keep money inside the United States; the other way we send more money to those who would do us harm.
How high should such taxes be? On gasoline, how about $4 per gallon?
Radical? Yes.
A $4 gas tax that sent pump prices to about $7.50 per gallon would cause widespread apoplexy. And of course, our politicians are going in the opposite direction, with John McCain and Hillary Clinton seeking votes by proposing to eliminate the federal gasoline tax for the summer. Apparently, they think Americans should use more gasoline and import more oil, thereby pushing up oil prices and sending more money to OPEC.
Keep in mind, Europeans tax gasoline heavily and pay about $8.50 per gallon — which has encouraged them to buy fuel-efficient vehicles, drive fewer miles and use mass transit — but their standard of living is high and their economies healthy.
There are ways to handle the downsides of a $4 gas tax — which includes the burden it would impose on lower-income Americans. For instance, we could use some of the $600 billion in annual revenue a $4 gas tax would raise to exempt the first $20,000 of income from the Social Security tax.
Americans would hate any increase in gas taxes, but the path we are on will lead to higher oil prices anyway, more pollution, a drain on our economy and more conflict in the Middle East.
The era of cheap energy is over. If we don’t face up to that now, get ready to beg Iran, Venezuela and Saudi Arabia to have pity on us.
(4 May 2008)
Recommended by contributor Dan Bednarz.
