In 1993 the Tax Foundation introduced the concept of "Tax Freedom Day." Tax Freedom Day is meant to represent the day that Americans begin to earn money for themselves; before that date, all earned income goes toward paying taxes. This year, tax freedom day fell on April 17th.
The goal of Tax Freedom Day is obviously meant to undermine support for money for public services, ones that average citizens expect and respect such as education, Medicare, and infrastructure. Tax Freedom Day gets a lot of media coverage, even though the basis for its calculation has been
questioned (i.e., median incomes would be more representative than average ones; the actual burden on a median income wage earner is much smaller than the calculation based on the average value predicts).
Given the notion of a Tax Freedom Day, I thought I would introduce "Gas Freedom Day." This date will represent how many days out of a year an average worker must labor to buy fuel, including natural gas, electricity (which is often derived from natural gas), and gasoline for their automobiles.
more after the break
I decided to do this calculation for 2006 for someone earning a median income in the Twin Cities, Minnesota, my home. This figure, according to
Metro Council, is $38,000. Although our salaries are, on average, higher than the national average (as is our minimum wage), we also drive our cars more. According to
Star Tribune, the average amount of mileage per household in the Twin Cities is 23,477. Minneapolis-St Paul ranks 10th in major metropolitan areas. According to the same source, Nashville and Jacksonville are first and second with 30, 260 and 29,102 miles, respectively. If one assumes a gas price of $3.00 per gallon and that an
average car gets 20 mile per gallon, the cost to fill the car for one year is $3,521 in the Twin Cities.
This winter, the Predicted cost of natural gas, the primary fuel used for home heating in the Twin Cities, is expected to increase by 30% or more. Xcel energy estimates that the average winter bill for residential customers will be $1200.
Electricity costs in the Twin Cities average $936 per year (based on last year's figures). Added to the home-heating bill, the cost of home energy is $2136.
Combined, the cost of home energy and gas for the car are $5657 for one year. This amounts to 15 percent of the median salary. Accordingly, The Gas Freedom Day is February 23rd.
None of my calculations include many hidden costs to consumers that will make the actual burden much larger. My calculation does not include household items that contain an almost endless list of petroleum based products such as clothing, plastics, food packaging, furniture, and building materials, including roofing materials and floor coverings. Nor does it consider the added cost to transport food and other goods to market nor increased airfares. Indirectly, car payments, car maintenance, and auto insurance can be included in these costs. If they were, you come to realize quickly that a person earning the national minimum wage ($5.15 per hour or $10,712 per year) could not be a participant in this market or even the one prior to the dramatic fuel price increases (thus, the large number of persons who could not evacuate New Orleans prior to Katrina). With the added burden of increased gasoline prices, no one should be surprised that a record number of people were late in their credit card payments last month.
President Bush and his administration have opposed conservation efforts (but don't they both claim to be conservatives?). Speaking for the president at a press conference on May 7, 2001, Ari Fletcher claimed that the US's large consumption of energy per capita is an "American way of life." During the same year, Vice president Dick Cheney said in a speech in Toronto that "conservation may be a sign of personal virtue, but it is not a sufficient basis for a sound, comprehensive energy policy."
The president's meager tax cuts for middle-income families have been offset by increases in state and local taxes to make up for lost federal revenues. Now, the increases in fuel prices have further eroded American's incomes. The president is starting to talk about energy conservation (he urged people to drive less), but, as is usually the case when his poll numbers decrease, his approach is one of public relations rather than policy.
The president can claim that he thought the Iraqis would greet us as liberators and that he didn't expect turmoil in the world's oil markets as a result of his optional war. He claims he had our national security in mind when he invaded Iraq. But if we examine the profits of oil companies during his presidency we see that they are at record high levels. It's clear that the president and his administration protected one group he was elected to support. Meanwhile, the Gas Freedom Day for average citizens will be expected to increase significantly without major policy changes. Keeping track of the Gas Freedom Day on a yearly basis will provide a benchmark for the achievements of energy policy.