Gas Tax: it's still time to increase it.
Sun May 04, 2008 at 02:11:51 PM PDT
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?
The main arguments against the gas tax are as follows:
- it's politically deadly to advocate it
- this is the US, not Europe - people simply have no alternative
- it's a highly regressive tax, which will hurt the poor horribly
I noted, back then, that prices were going to increase anyway and thus that it was better to have the money go to Washington rather than to Ryhiad, Moscow, Tehran or Caracas. People scoffed at that, but maybe that argument has gained traction in the meantime? I'll say it again: prices WILL increase, and will go to the level that is so painful that people change their behavior even though they have no practical alternative. Will you believe me now? If you accept that notion, getting gas prices to increase in a controlled and predictable fashion will be a really useful tool for the economy, and for people, to adapt over the medium term and to move durably to a lower fuel consumption level.
People are always saying there is no alternative, but consider this:
Juneau functions with less electricity
AVALANCHE AFTERMATH:Higher price has energized conservation.
Avalanches earlier this month knocked down transmission lines and cut off Juneau's source of low-cost hydroelectric power. Threatened with a fivefold increase in utility bills, Juneau quickly powered down.
Stores, though open, went partially dark. Neon signs were switched off and vending machines unplugged. At home, residents of this former Gold Rush town began living a little bit like pioneers, dusting the snow off the grill, stringing clotheslines in the backyard and flicking off their TV sets. Within a week, electrical usage across town was down as much as 30 percent.
(...)
As back-up diesel generators shouldered the load, the electric company began warning customers that life in Juneau -- already expensive -- was about to get a lot more so.
With oil prices reaching a record $120 a barrel, Alaska Electric Light and Power said customers might have to pay for an extra $25 million in diesel over the three months it would take to repair the lines. The utility warned that rates would probably leap from an average of 11 cents per kilowatt-hour to more than 50 cents, or about five times the 10.3 cents that is the national average.
With explicitly scheduled tax hikes over the coming years, people would know that prices will go up and would plan accordingly, with the time to do it in an efficient way.
Because, make no mistake, doing it if a shock happens will be hugely painful. And doing it the "slowly boiling frog" way as now does not seem to be very effective yet, as people do not seem to quite believe that gas prices will remain that expensive, let alone increase more.
And remember, the money gets to stay home, to be used to get the alternatives ready.
As to the regressive nature of the tax - again, the price hikes will happen anyway. The regressive price movements WILL happen. The difference is that in one case, the budgetary resource to do something about it is available. From the simplest - refund the amount of extra taxes to all US citizens via a "flat rebate" (everybody gets the same amount) - to more sophisticated uses including incentives for alternative energy to direct investment in public transport, there are a lot of ways for the pain to be mitigated.
The point again, is that there WILL BE PAIN. Because consumption needs to go down, which means changing the current unsustainable ways. whicvh means, again, increasing prices. We can organise it, or we can have it happen to us. At this point, less so than 3 years ago, but more thna in 3 years' time, it is still our choice.
The inevitability of that change is a notion that is really hard to accept, but that does not make it less true.
Maybe the political minds amongst you that say it is impossible to make people accept such a notion are right, and we're truly fucked. I'm still believing that (enough) people are smart and can be told the hard truth.
