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This diary was originally posted February 16, 2009, more than a year ago. Given the BP Oil Disaster and the suspension of off shore drilling, I felt it appropriate to repost this diary.

There is so much that could be done to address our ecological shortcomings. Hopefully this diary sheds some light on our potential courses of action.

In short:

a) Raise the gasoline tax and heavily incentivize activities such as car pooling and purchasing fuel efficient vehicles (50mpg+) to alter driving behavior

b) Eliminate the payroll tax ceiling and cut the rate in half for all those making less than the current ceiling of $107,000.

c) Divert the raised revenue to cover our infrastructure shortfalls and invest heavily in the green economy nationally. Details below

The Following Was Originally Posted February 16th, 2009:
Nearly 3 months ago when I wrote the original Raise the Gasoline Tax diary, the average price of gasoline stood at $1.929.

After bottoming out at 1.616 per gallon in December however, gasoline prices have risen 20% to $1.965 and are threatening to pass $2 a gallon again.

The decline in the price of gasoline from $4.17 to the current $1.965 amounted to a defacto tax cut worth hundreds of billions to American drivers across the nation. Those hundreds of billions were previously being sent overseas to nations like Saudi Arabia, Venezuela, and Russia. Those countries do not have our best interests at heart and were asserting themselves against us in bolder and bolder ways until the recent decline.

It's long past time to use this opportunity to strengthen ourselves; this calls for shared sacrifice from all of us.

A report in 2005 stated that $1.6 trillion over 5 years was required to bring our infrastructure up to code.

Today? The cost has risen to $2.2 trillion due to the neglect of the Bush Administration.

In short, we cannot wait until the economy is stronger before implementing a gasoline tax to stem rising prices and demand. Americans unfortunately have an all too short memory when it comes to cars and gasoline usage: Truck and SUV sales rising as gas prices drop

And yet, we cannot put even greater burden on the least of us who have lost their jobs, seen their mortgage payments rise, their credit card interest significantly increase, or the cost of their healthcare continue going through the roof.

So what alternative do we have?

Last year my husband (/rant/ not legally since gay couples aren't allowed to get married, but we've been together for almost 9 years, living together almost 8 years. he's my husband dammit /end rant) and I made more than $210k. We save and invest more than $4k a month between our retirement accounts and liquid savings and bought our first home almost a year ago.

In short, we can afford an increase in our taxes. So can every other family who is in the top 5% of all income earners in the nation.

Ask yourself why is it that Social Security ceases taxation at $106,800?

The current rate of taxation is 6.2% up to $106,800 for average Americans. If that rate were reduced to 3%, the real tax cut for the median American household making $50k would amount to $1600. For those making up to the current limit of $106,800 the tax reduction would be $3400.

That kind of savings would make a significant difference in the lives of Americans ($150-$280 month) and would go a long way to alleviating the pain so many are going through.

Conversely, instituting the Social Security Payroll tax at 6.2% for ALL individual income above $106,800 would cover the shortfall created by lowering taxes on the rest of the American public as well as create a surplus of $100 billion annually.

In effect, the payroll tax deduction would offset the increase in the gasoline tax for the 90% of working Americans subject to it.

It would also have the effect of reversing the perverse wealth redistribution taking place over the past several decades.

Why do this, some will argue? Won't the offset in payroll taxes do nothing to change individual's driving behavior?

It certainly will. If you're someone who is suffering through hard times and you receive a couple hundred dollars per month in tax relief, are you now going to buy a Hummer if you see the price of gasoline increased to $3-4 a gallon?

No?

By implementing this tax, we not only reverse the wealth redistribution, we also change behavior. And that is the crux of this tax.

Change behavior of American drivers, reduce our dependence on oil (foreign and domestic), and beef up our national infrastructure.

That said, the following is the diary I wrote several months ago detailing what could be done with this windfall. But before posting that, please use the following links as clues to what others are saying on this crucial subject.

It's Time to Raise the Gas Tax

OPEC Loses Its Muscle

Black Gold: It's Time to Raise the Gas Tax

Plunging Gas Prices Fuel Sharp Rise in Truck, SUV Sales

Win, Win, Win, Win, Win..

Phoenix finally hops on the train

This oil man favors a gas tax hike

The problem with cheap oil

Oil Supply Crunch in 2010?

The Following Was Originally Posted November 23rd, 2008:
First a little history.

As you can see, the price of gasoline has fluctuated greatly over the past 30 years. By and large, however, the price of gasoline has remained dependent on world economic output and fuel efficiency.

In the 1970s, OPEC held the world hostage with two enormous increases in the price of oil. In response, western nations such as Germany, France, and the United States implemented higher fuel efficiency standards as well as increased funding for public transportation.

As evidenced in the graph above, there have only been two large and sustained dips in world oil consumption. The first occurred in the mid-to-late 1970s during the shocks of 1973 and 1979. The second sustained dip occurred during the 1980s.

The first dip, small as it was, coincided with economic recession due to artificially high oil prices. The second, larger, and more sustained dip, however, was due to the widespread adoption of higher fuel efficiency standards.

In other words, the political will existed at that time to enact stringent laws to reduce our dependence on foreign oil.

In the United States, the introduction of CAFE, or Corporate Average Fuel Economy, more than doubled our fuel efficiency almost overnight.

So what happened? Car companies, weak willed politicians in Washington and in State legislatures, and the American public were lulled into a sense of low-priced energy as a permanent state of being. Rather than use the opportunity of low prices to set even higher fuel efficiency standards and raise fuel taxes to keep consumption low and pay for public transportation, we instead saw the boom of Suburban sprawl, also known as the "Exurbs". Powered by cheap gasoline, Americans clamored for SUVs, Mini-vans, and other light-truck vehicles rather than the smaller and more fuel efficient cars sold in Europe and Japan.

And finally when the demand for oil outstripped the fuel efficiency standards put in place in the 1970s, the price of a gallon of gasoline began its long and steady climb upward again. When adding in the exploding economies of India and China, a combined 2 billion people modernizing at an astonishing rate, and the demand for oil has skyrocketed.

But what have we seen in terms of oil supply?

While demand has increased significantly, the world's oil production has stayed relatively the same or fallen. That can only mean higher prices under any circumstances.

So while you have the republicans such as Sarah Palin saying we have to drill our way out of this mess, the truth of the matter is that we can only provide 2-5% of world oil production. And that's if we destroyed every pristine environment in the nation in order to get at the oil.

And wouldn't you know it, that's just what the Bush Administration has been trying to do with opening up Offshore Drilling, trying to drill in ANWR, and now most recently going after the oil shale held in the rockies.

http://edocket.access.gpo.gov/...

All of this misses the fundamental problem facing us. Dwindling supplies and exploding demand.

That said, the reason why oil prices have fallen so precipitously is because oil speculators believe the world economy will fall into recession, lessening demand significantly.

In light of this historical information, we need to take the steps now, while we have the attention of the american people, to raise the gasoline tax and put a floor on gasoline prices and consumption.

As stated before, currently the national gas tax is $0.48. Of that, roughly $0.18 goes to the federal government. With that tax, the federal government is able to raise roughly $25-$30 Billion annually, give or take a few billion.

With national gasoline prices at $1.929, an increase of the federal portion of the gas tax from $0.18 to $1.25 would increase the average price at the pump to $3 a gallon, a price still 27% lower than it was when prices hit $4.11 on average earlier this summer.

That would effectively increase tax revenues to the federal government up to $208 Billion. This would have multiple effects:

  1. When the base price of gasoline rises again to $3, national demand would reflect prices similar to that experienced this past year when miles driven fell at the steepest rate ever in March and May.

In other words, driving patterns did not change until national prices hit $4 per gallon this year. Until that point, people continued to drive, and in fact increased their driving.

  1. In 2001, the GAO estimated that building a high-speed railway system in the highly-trafficked Northeast Corridor, rivaling the TGV in France and the Bullet Trains in Japan, would cost upwards of $70 billion over 20 years.

20 years folks. That's $3.5 billion per year, which is a drop in the bucket compared to the increase in tax revenues.

Now you may ask, "What about the other states?"

The key here is to service the areas of the country that have the highest population density first, and then expand out. And as you can see, the highest population density of the nation is the Northeast corridor by far, and east of the Mississippi by far.

In that vein, John Kerry has proposed the High Speed Rail For America Act which would have the following effect if successful:

But even this is a drop in the bucket compared to what could be spent on a national system as it would allocate only $24 billion over 6 years, or $4 billion per year.

That's nothing compared to the investment France makes in the TGV, per capita.

Building a high speed rail system east of the Mississippi and along the western coastline of the United States, rivaling France and Japan, would  cost $80 billion annually over the next 10 years.

http://campusprogress.org/...

The main reason other countries are so far ahead in HSR is simply because they are investing more. France spends 20 times as much per capita as the United States on rail. This breaks down to $67.66 per person in France versus $3.28 per person here. As this legislation works its way through Congress and as transportation issues become increasingly important over the next few years, here are the facts about high-speed rail.

Of course, we would have the advantage in being able to use the latest technologies to build an all new network without having to worry about legacy costs as the French do. We could also begin to take advantage of technologies such as MagLev to get a step beyond current high speed rail.

  1. We could fund significant investments in Solar, Wind, Geothermal, and other renewables.

In particular, look at technology advances we've seen for Wind.

http://www.technologyreview.com/...

ExRo's new design replaces a mechanical transmission with what amounts to an electronic one. That increases the range of wind speeds at which it can operate efficiently and makes it more responsive to sudden gusts and lulls. While at the highest wind speeds the blades will still need to be pitched to shed wind, the generator will allow the turbine to capture more of the energy in high-speed winds and gusts. As a result, the turbine could produce 50 percent more power on average over the course of a year, says Jonathan Ritchey, ExRo's chief technology officer. Indeed, in some locations, the power output could double, says Ed Nowicki, a professor of electrical engineering at the University of Calgary, who has consulted to ExRo.

Currently the strongest wind patterns in the United States are found in the corridor running from Montana/North Dakota down through Oklahoma and Texas. Add in the Great Lake states such as Ohio, Indiana, Wisconsin, Illinois, Michigan, and Minnesota, which also see strong winds, and this country could significantly increase its Wind power output.

State: South Dakota
Current Wind Power Generation: 186.76 MWatts
Potential Wind Power Generation: 117,200 MWatts

State: Ohio
Current Wind Power Generation: 7.42 MWatts
Potential Wind Power Generation: 416 MWatts

State: Oklahoma
Current Wind Power Generation: 689 MWatts
Potential Wind Power Generation: 82,700 MWatts

State: Montana
Current Wind Power Generation: 165.03 MWatts
Potential Wind Power Generation: 116,000 MWatts

State: Nebraska
Current Wind Power Generation: 73.38 MWatts
Potential Wind Power Generation: 99,100 MWatts

State: Texas
Current Wind Power Generation: 6297.35 MWatts
Potential Wind Power Generation: 136,100 MWatts

All information found at http://www.awea.org/...

Now with the current infrastructure in place, Wind supplies roughly 1.5% of our energy needs today. How much has been invested in Wind to date? $28 billion. From the 1980s to today, only $28 billion.

Imagine what could be done with an annual investment of $28 billion for the next 10 years?

But it doesn't end there.

Losses from our antiquated power grid have estimates at $80 billion a year. This is primarily due to losses incurred by power outages, data corruption, etc.

Costs by Sector The study estimates the total cost to the U.S. of power interruptions at about $80 billion per year. Of this, $57 billion (73 percent) is from losses in the commercial sector and $20 billion (25 percent) in the industrial sector. "The reason for the commercial sector’s high share of these cost is the large number of commercial sector customers, which includes small as well as large businesses, and the high cost per outage per customer," notes Hamachi-LaCommare. The industrial sector’s cost per outage per customer is significantly higher than those of the commercial customers, but there are only 1.6 million industrial customers, compared to 14.9 million commercial customers.

The authors estimate residential losses at $1.5 billion, or only about 2 percent of the total.

$80 billion annually. Let that sink in for a moment.

How much would it cost to modernize our national grid so that we could take our existing power generation capabilities, add the new power generation to it, as well as allow more efficient sales between states as well as individuals who generate excess power (think solar panels installed on your roof)?

$75 billion

High-voltage wires mounted on towers erected on narrow (200-foot) rights of way can quite easily move huge amounts of power, over thousands of miles, with very modest losses. Direct-current systems operating at about 600,000 volts are optimal for certain applications; alternating-current systems operating at close to a million volts are more suitable for many others. A single line operating at 765 kV AC can transmit almost 1 percent (4 GW) of the total average power generation of the entire United States, or 0.5 percent of the power that Americans collectively consume during the most power-hungry minute of the year.

According to one recent analysis, windmills located principally in the heartland could meet over 25 percent of current U.S. electricity requirements (or 20 percent of projected demand in 2030) if linked to population centers across the country by 19,000 miles of high-voltage grid.[13] Such a grid would cost an estimated $60 billion to build. A somewhat larger, 21,000-mile grid designed to network all major sources of electricity, including wind, might look something like the one shown in the accompanying conceptual map, and would cost about $75 billion. That would add roughly 0.3 cents to the current 9-cent average retail price of electricity.

Here is the study:

http://www.aep.com/...

And look how much goes wasted every year because we cannot shuttle energy efficiently to the areas of the country that need it.

But here's the kicker:

Electricity—not oil—is the heart of the U.S. energy economy. Power plants consume as much raw energy as oil delivers to all our cars, trucks, planes, homes, factories, offices, and chemical plants. Because big power plants operate very efficiently, they also deliver much more useful power than car engines and small furnaces. On their own, our passenger cars consume less than half as much raw energy as our power plants, and turn it into useful power at the wheels about half as efficiently. If we could plug our cars directly into the electric grid, and choose the best time and place to plug them, idle capacity in existing plants could power almost all the miles we drive. With a 10 percent boost in production, the grid could also take care of all the heating supplied by oil-fired home furnaces.

Electricity is also comparatively cheap. If we could deliver electricity straight to electric motors connected to our wheels, it would deliver miles at a price that most current car engines could match only on gasoline priced under a dollar a gallon. Delivered to our homes at off-peak prices, electrical heat would cost homeowners a lot less than $4-a-gallon heating oil. Electricity is cheap because the gigantic furnaces and boilers that spin million-horsepower turbines and generators run almost entirely on fuels that cost much less than oil. As a result, we spend roughly half as much on electricity—about $350 billion a year—as we’re currently spending on $100-a-barrel oil, and electrically powered systems do more, faster and better, than oil-fired alternatives.

So let's see what we've learned:

  1. Increase the federal gasoline tax from $0.18 to $1.25. Raise up to $208 billion in additional revenue.
  1. Subtract $80 billion annually for the next 10 years developing national high speed rail that would rival the French and Japanese.
  1. Subtract $15 billion annually for the next 10 years building a 21st century power grid (figure you'll have cost overruns).
  1. Subtract $45 billion annually (5x the amount invested in 2007) for the next 10 years building out our Wind power generation capabilities.

That still leaves $68 billion annually to develop and deploy Solar in the perpetually sunny states of California, Nevada, New Mexico, Utah, Arizona, Texas, Louisiana, Georgia, Mississippi, Alabama, and Florida. Not to mention aiding in the development of bio-diesel (not corn ethanol, please by god), fully plug-in electric cars, and fixing our bridges, tunnels, and roads.

This is a future that we can realize folks. What is the alternative? Leave the gas tax the way it is today, the world economy recovers, and gas prices rise back to where they were. Instead of raising $200 billion annually to spend here at home, we'll be sending that potential tax revenue overseas.

I hope to god that the Obama administration sees this and implements the increase in the gas tax soon. While the national mood is ready for it and while people still have memories of $4 gasoline in their minds, it must be done. Because I can tell you that once people have adjusted to cheaper gasoline, it'll be too late.

We don't have much time to act. Thanks for reading.

Originally posted to Yalin on Sun May 02, 2010 at 02:50 PM PDT.

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Comment Preferences

  •  Extremely Skeptical. (2+ / 0-)
    Recommended by:
    luckylizard, tnproud2b

    Explain to me how the politics of increasing the gas tax that much would work.  How would it not be rejected out of hand by congressional moderates and Republicans?  

    And even if somehow we got it implemented, how would it not lead to an even more savage loss this fall?  Most people understand that Obama's supposed ok'ing of increased offshore drilling was in fact just a political ploy to head off the impact of increased gas prices on our party in the election next fall.  Because people can't afford these kind of prices, or afford the sudden shift to better vehicles.

    The last time gas went up that high, for no reason connected to any specific gov't action at all, people only slightly cut their consumption.  Most of them ate that cost, cutting into all their other spending, and helping to pop our last massive bubble.  Why wouldn't that happen again?

    Moreover, during that time of increased gas prices, the public support for offshore drilling increased markedly, to the level where even our side was talking about increasing domestic oil exploration.  Why wouldn't that happen again too?

    •  You believe an increase in the gas tax with a (5+ / 0-)

      simultaneous decrease in the payroll tax for the 85-90% of americans who are subject to the payroll tax would be a political nonstarter?

      The difference in the argument you're making is that I'm suggesting offsetting the increase in the gasoline tax with the decrease in the payroll tax whereas previous gasoline price increases where met without any kind of help from the government for lower and middle income families.

      Your scenario is a canard in light of that.

      People imo want bold leadership, and moving beyond incremental "tried and true" steps like drop in the bucket investments in high speed rail that will net you a small line between California and Nevada is the way to go.

      If not now when the nation's attention is on environmentalism and ecological disasters, when?

      •  Yes. (2+ / 0-)
        Recommended by:
        luckylizard, tnproud2b

        First of all, it's insanely regressive.  Gas prices, and gas taxes, represent a far greater burden on the poor and working class than on the rich.  Gas may represent 10% or even 20% of a poor person's budget at certain times of the year, whereas it makes up far far smaller percent of an affluent person's budget.  

        Additionally, increased gas prices have a huge impact on the price of commodities like food, which again, make up a far larger share of the poor and working class budget than those who are affluent.

        Moreover, an increased gas tax would impact rural states to a much greater degree than urban areas.  Rural people not only drive far greater distances on average, they have no option of switching to mass transit or to car pooling.  And they're far less likely to be able to switch to more efficient vehicles for both cost and practical reasons.  Given the over-representation these states have in congress, that's absolutely a nonstarter politically.  

        •  Again, you're missing the point about the offset (1+ / 0-)
          Recommended by:
          highacidity

          of the payroll tax deduction.

          If you actually read the diary rather than knee-jerk state "gas taxes. it's regressive!!", you'd see I addressed those issues.

          •  You're Missing My Point. (1+ / 0-)
            Recommended by:
            tnproud2b

            I guess I missed a couple words in my first sentence.  So let me try again:  Gas prices, and gas taxes, represent a far greater burden than payroll taxes do on the poor and working class than each does on the rich.

            Get it now?  How are you going to justify a change in taxes that leaves the working poor paying marginally more moneythan they do now, and the rich receiving massive breaks in their payroll taxes?  

            You're talking about someone like yourself saving several thousand dollars in reduced payroll taxes and having their gas costs go up a few hundred bucks a year, while some poor working stiff making $20k a year ends up having their payroll taxes go down a few hundred bucks, and their gas prices increasing by virtually the same amount.

            And of course, you can afford to switch to a more efficient vehicle.  That working stiff can't, and is far more likely to have and to require a less efficient vehicle to start with.

            And I can't help but notice that you dodged the rural/urban issue.  Politically, there is no way to get this done.  None.  

            •  How would "the rich" receive massive breaks (2+ / 0-)
              Recommended by:
              highacidity, NoMoreLies

              in their payroll taxes?

              Let's take someone in the top 5% of income earners in this country, i.e., ~$200k/yr

              Today's payroll burden: ~$6,600 (6.2% on income up to $107k. nothing above that)
              Proposed payroll burden: ~$9,300 (3.1% on income up to $107k. 6.2% above that)

              How about someone on wall street making $500k a year?

              Today's payroll tax burden: ~$6,600
              Proposed payroll tax burden: ~$28,000

              Massive breaks in payroll taxes? Quite the opposite. In fact it's the big reason why I said in the title "Time to Raise My Taxes (Yes, You read that correctly)". In your case, however, I guess you didn't read correctly.

              You want to revisit that claim?

              As for the efficient vehicle bit, you haven't heard of subsidies? You know they're currently in effect and quite paltry. The increased revenue for this particular change in the tax could easily go to that, as I noted the breakdown in the increased revenue.

              As for the rural/urban issue, I didn't dodge it at all. That was the point of my statement regarding leadership from President Obama.

              Care to try again?

          •  One big problem I see is that not everyone is (1+ / 0-)
            Recommended by:
            luckylizard

            paying payroll taxes. What about the retired folks, who live on a fixed income? What about the disabled, or people who were just laid off from work and who need to hunt for jobs?

            These people tend to be poor and would be paying higher percentages than the rich.

            The tax would end up being regressive.

            "As we must account for every idle word, so must we account for every idle silence." Benjamin Franklin

            by FLRealist on Sun May 02, 2010 at 06:55:00 PM PDT

            [ Parent ]

            •  that's what subsidies are for. it was done (0+ / 0-)

              in healthcare debate and clearly there is more than enough revenue raised by this small change to cover those scenarios.

              Quite frankly payroll taxes are extremely regressive as it is, even more so than a gas tax would be since payroll taxes stop impacting you once you get over $107k. Gas taxes impact everyone who drives.

        •  In addition, gasoline prices are going up whether (2+ / 0-)
          Recommended by:
          highacidity, Egalitare

          you, me, or anyone else likes it or not.

          Better to prepare for that inevitability by redirecting that behavior toward building our own infrastructure than wait, see prices increase anyway, and have that money go overseas.

          You're arguing myopic short term policy when we need something bigger than that.

          •  In just a few years, $4/gal gas will be... (3+ / 0-)
            Recommended by:
            highacidity, NoMoreLies, Yalin

            ...looked upon as "the days when gas was affordable." Whether we allow the Oil Barons to enjoy all of the additional revenue and profit or tack on a tax to capture some of that money to invest in life after no-longer-cheap Oil is the fork in the road at which we've arrived.

            I know which direction I choose.

            "Power concedes nothing without a demand. It never did and it never will." -- Frederick Douglass

            by Egalitare on Sun May 02, 2010 at 03:54:20 PM PDT

            [ Parent ]

            •  $4 a gallon (0+ / 0-)

              is when people start changing their driving behavior, and they should. But the politics of this are very difficult. Gas prices can only go up by regulation when unemployment rate goes below 5% and that ain't happening any time soon. One catastrophe at a time, please. Easier anyway to keep pushing up car mileage standards rather than forcing people to drive less.  This should not be a problem fixed through taxes.

              •  Sorry: it won't be "one catastrophe at a time" (2+ / 0-)
                Recommended by:
                highacidity, Yalin

                We've put off relatively easy, gradual transition back when we ignored the Oil Shocks of the 70s, which coincided with Domestic Peak Oil. The next Oil Price Shock we won't be able to "buy" or fight our way out of.

                Some other major wildcard (a knockdown, drag out between India and Pakistan, an Iranian Counter-Revolution, etc.) will happen at pretty much the same time.

                Count on it.

                "Power concedes nothing without a demand. It never did and it never will." -- Frederick Douglass

                by Egalitare on Sun May 02, 2010 at 05:14:19 PM PDT

                [ Parent ]

      •  You have to work on the tax aspects of softening (0+ / 0-)

        the effects of a dramatic increase in the gasoline tax.

        Increasing the gas tax to bring the retail price of a gallon to $5 or $8 is going to effect more than just  people/families who are poor or near poor. A gasoline tax of that magnitude would roar through the economy (our economy and the world economy) like a tsunami. It would increase food prices, housing prices and so forth.

        You also have to consider our infrastructure problems. Our mass transportation systems are old and anemic and serve too few people. You cannot upgrade and build new systems in a few years. You have to talk in terms of decades if not a century.

        If you are older than 55, never take a sleeping pill and a laxative at the same time!

        by fredlonsdale on Sun May 02, 2010 at 03:46:05 PM PDT

        [ Parent ]

        •  Actually, I only argue for an increase in the (2+ / 0-)
          Recommended by:
          NoMoreLies, Egalitare

          gasoline tax from $0.18 to $1.25, or $1.03 over the current price of ~$2.84. It would increase the price to $3.87.

          I wouldn't suggest an increase of $2-$5 in the gasoline tax, let alone have that increase hit all at once.

          All of the math I've done reflects a modest increase in the gasoline tax with the payroll tax offsets, and what could be done with that increased revenue.

          We're not talking a significant increase in the price of a gallon of gasoline relative to the benefits.

          That said, the interstate highway system was constructed in a decade. Hell we put a man on the moon in less time than that. I think we could upgrade the current systems as necessary and build new systems like high speed rail in that time.

          Particularly with the levels of unemployment we see today and those people who are in dire need of a job.

          •  One Dollar A Gallon... (1+ / 0-)
            Recommended by:
            tnproud2b

            Your average American uses 500 gallons of gas a year.  So you're talking about roughly $500 in increased gas costs.  That may represent a couple days work for an affluent couple.  For the working poor, it may represent a week or two worth of work.  

            Oh, except you're driving a hybrid getting 50 miles a gallon, and the poor dude is driving a 14 year old beater that gets a third of that, downhill, with a stiff breeze at his back.  And his chances of buying a new, more efficient vehicle is roughly zero.

            •  And the payroll tax offset reduces their tax (2+ / 0-)
              Recommended by:
              highacidity, NoMoreLies

              burden by $1600-$3200 per year.

              From the diary:

              The current rate of taxation is 6.2% up to $106,800 for average Americans. If that rate were reduced to 3%, the real tax cut for the median American household making $50k would amount to $1600. For those making up to the current limit of $106,800 the tax reduction would be $3400.

              That kind of savings would make a significant difference in the lives of Americans ($150-$280 month) and would go a long way to alleviating the pain so many are going through.

              As I stated. You didn't read it before starting in with your knee jerk "gas taxes are regressive!!" statements.

              I addressed that problem already.

              •  You Seem Confused. (1+ / 0-)
                Recommended by:
                tnproud2b

                Someone making $50k isn't the working poor.  I can understand how someone making four times that might get confused though.

                Try your numbers again for someone making $20k, and driving a piece of shit car.  Do it for someone making $20k a year, driving a POS, and doing so in a rural state like Montana or North Dakota.

                Explain to me how you get those Senators to go along with this without resorting to various magic words like leadership.  

                •  Uhm, someone making $20k pays (2+ / 0-)
                  Recommended by:
                  highacidity, NoMoreLies

                  payroll taxes of $1240 a year. Cutting their payroll taxes in half saves them $620 a year.

                  Still netting them $120 above the $500 increase in gasoline prices you used for your example.

                  Yea, you're not helping your cause.

                  •  Bullshit. (0+ / 0-)

                    Because you're ignoring vehicle efficiency.  And as I mentioned at the outset, food.

                    And once again, you're also ignoring the rural/urban congressional representation issue.  

                    The regressive taxation issue is largely a moral one for those of us who are progressives.  But the rural state issue is what really makes this politically untenable.  

                    Again, tell me how you get a senator like Tester, Dorgan, Baucus, or Udall to go along with this, when they know that much of his state is driving pickups, doing so over huge distances, and is making far less money than the national average.

                    •  I mentioned vehicle efficiency in the diary. (1+ / 0-)
                      Recommended by:
                      highacidity

                      Food prices wouldn't skyrocket anymore than they did when gasoline was $4 a gallon. And they're going back to that price point whether you, me, or anyone else likes it or not.

                      A point that YOU did continue to ginore.

                      As for regressive taxation, I fail to see how a massive increase in the payroll tax for more affluent people such as myself while reducing the hit through the payroll tax is regressive.

                      I mean, seriously. You're kvetching just to kvetch.

                      •  They'll Go Back To $4? (1+ / 0-)
                        Recommended by:
                        tnproud2b

                        No, they'll go back to $5, because this tax would be added on top.  That increase in gas prices, food prices helped trigger a massive financial explosion last year, why are you dismissing it?  It's not kvetching.  People cannot afford that.  And when gas gets that high, disposable income evaporates, and it starts to eat into mortgage and rent payments.  

                        As for the regressive taxation issue, you seem confused as to what the term actually means.  This tax absolutely will hit the working poor far harder than the affluent.  Simultaneously decreasing some other tax else does nothing to change the fact that this is a regressive tax

                        And once again, you're ignoring the rural issue and the politics of this.

                        •  Ok, first and foremost the increase in gasoline (1+ / 0-)
                          Recommended by:
                          highacidity

                          prices occurred in 2008, not 2009. Second, the gasoline prices are going to go back up because of increased demand from our economy as it recovers as well as the economies of china, india, europe, etc.

                          Yes, gasoline prices are going to go back up whether you want them to or no, and all of that revenue is going to go overseas.

                          Additionally, there will be no framework to reduce the burden on the poor and middle income families because there will be no reduction in payroll taxes for them as part of the larger energy plan.

                          And once again, I haven't ignored the rural issue and politics. I've addressed that time and time again by stating the economics of the situation, the reality of the increasing cost of gasoline regardless of anything we do, and the leadership necessary from the White House to make it happen.

                          But hey, make up stuff as you see fit.

                          If you want to spend some time reading through the arguments properly and educating yourself so you can make proper rebuttals, then we can continue the conversation.

                          If you continue to choose not to, however, we really have nothing more to discuss. I don't do well trying to lead the willfully ignorant by the hand.

                          •  Leadership... (1+ / 0-)
                            Recommended by:
                            tnproud2b

                            Is a bullshit, magical word people pull out when confronted with the political reality that what they want is impossible to get.  

                            We have nearly a dozen Democratic senators from extremely rural western and plains states.  Their constituents drive big cars/trucks, drive long distances, and make little money.  They'll be impacted heavily by a gas tax, and receive minimal compensation in the form of reduced payroll taxes.  

                            Coincidently, many of those states are also major oil producers.

                            Those senators will not vote for what you're proposing.  Ever.  'Leadership' from Obama, or not.

                          •  Your claims of "minimal compensation" are not (0+ / 0-)

                            backed up by any fact of math.

                    •  Btw, I keep noticing you parroting the whole (1+ / 0-)
                      Recommended by:
                      highacidity

                      "regressive" bit while choosing to not respond to the post where I directly addressed your claims.

                      http://www.dailykos.com/...

                  •  An individual making $20k pays little or no (0+ / 0-)

                    Federal Income Tax. S/he does pay FICA. Are you suggesting direct subsidy payments like a negative income tax?

                    A family of four with household Income of $50k has a similar tax situation except they may already be eligible for an earned income credit among other things.

                    If you are older than 55, never take a sleeping pill and a laxative at the same time!

                    by fredlonsdale on Sun May 02, 2010 at 05:50:16 PM PDT

                    [ Parent ]

          •  I don't see where you address the impact of the (0+ / 0-)

            tax on food and other products. Producers would pass the higher taxes onto the consumer, and it would impact laid off workers, fixed income people and people working low wage jobs greater than those of middle or higher classes.

            "As we must account for every idle word, so must we account for every idle silence." Benjamin Franklin

            by FLRealist on Sun May 02, 2010 at 07:00:26 PM PDT

            [ Parent ]

            •  I addressed it earlier in the comment thread. (0+ / 0-)

              The price increases are not going to be any higher than they were when gas was at $4.15 a gallon a couple of summers ago. Difference then was that there was no legal vehicle in place to help the poor and working class families through the form of payroll tax deductions.

              If instead of a 3% payroll tax you make it 2.5% on those making less than $107k, you still end up revenue neutral if you subsidize the cost of food and other purchasable items.

              Or if you graduate the scale so that instead of 3% flat for all of those making less than $107k you leave it at 6.2% and reduce the amount every $10k or so, and redirect the increased revenue to the poorer in our society.

              There are simple ways to address the problem once you open this restructuring concept.

  •  Yikes! (0+ / 0-)

    So basically, you want to (a) hobble the government's financing mechanism (the treasury market) while (b)  removing the incentives for high earners (often the best educated) to earn high incomes.

    Super!

    In brief:

    global support for the dollar will go away.  So will foreign direct investment.  As a result, so will healthcare, medicare, social security, federal and state pensions, and so on.   You'd effectively knock down suburbia so we could either become farmers or move to one-bedrooms in the city.

    Please, act locally!!  

      •  Sort of (0+ / 0-)

        Sort of.

        It's mostly frustration at algebra answers to calculus problems.

        •  Ok, let's take it one by one then. (2+ / 0-)
          Recommended by:
          highacidity, NoMoreLies

          Even with an increase in the payroll tax, you believe someone making $200k a year is going to want to make $100k a year because they'll save $3k in payroll taxes?

          You think someone making $500k a year will want to make $100k a year instead because they'll save $22k in payroll taxes?

          Seriously?

          That said, how would foreign investment dry up if we were investing in our infrastructure to make our economy grow that much faster in the future? Not to mention aiding in paying down our long term structural deficits and debts by improving the productivity of our transportation system?

          Quite the opposite would happen, as is proven by history.

          Of course, this is if your answers were not snark.

          •  Hi (0+ / 0-)

            I live this world; I'm a high income guy.  Here's what you do when the taxman cometh:

            You reclassify income, you dont  exercise options, you keep gains offshore awaiting more favorable tax changes.  You sell stock on January 3rd, delaying for yet another year tax payments.   You set up corporations and "hire" family members, instead of just supporting them directly.  Ordinary after tax expenses become deductions and the actual dollars collected doesn't necessarily go up.

            What does go up is the amount of money diverted to tax avoidance, accountants, lawyers etc, instead of deployment into productive enterprises.  Raising taxes will happen, but it won't matter.  Tax receipts follow an s-curve, meaning they level off, whereas debt service grows exponentially.  This is math; there's no point to raising taxes beyond a certain level, and even confiscatory rates (90% stuff) wouldn't meet debt service costs over time.  

            I like math.  Politicans screw with the truth but not with numbers.      

            "investing in infrastructure" is a catchphrase that means nothing.  We actually can't reduce our dependence on oil until we find a new way to fund the government that includes less borrowing.  So that's a non-starter.

            The infrastructure is built; the command "build suburbia" describes the economy from 1945 to now.  Ok, it's done.  And our auto industry had it's moment in the sun.  And our government used the oil producers' surplus to fund our deficits.  

            We need a system-wide reset, not tinkering.  I welcome your ideas but as long as the government is a debt-financed leviathan, we're stuck.

            Examples of system wide resets:

            1 - default on treasuries.  Selectively if you prefer.  Stiff the creditors.
            2 - 1914 to 1945.  Out with monarchies, in with
            American superpower.
            3 - debt jubilee

            but paying down the debt...yeah, no.  (a) it's not possible unless we just print money and (b) contractions in the money supply would be bad for the economy.

            Re: foreign investment. Investors love our court system and property rights.  But increased taxation and regulation always pushes away institutional money.  It decreases returns.

            I'm not being snarky.  I'm just tired of the same old failed ideas, and tired of the bullshit rep/dem dichotomy.  Both parties take care of elites and if any crumbs fall, then, hey enjoy 'em.

            •  Ok (0+ / 0-)
              1. How does anyone avoid payroll taxes when they're taken out before you receive your paycheck? I really don't get the whole spiel about diverting income overseas on options and whatnot given that reality.
              1. I agree that we need to reduce our borrowing. However, if you look at our annual expenditures, the amount we borrow to finance our oil buys is a significant chunk of our annual expenditures. If we could invest in the technologies and infrastructure we need to invest in, it would help our economy run more efficiently as well as create jobs in a significant number while preparing us for the future.
              1. The problem you talk about with regarding to "investing in infrastructure" and "build suburbia" is that in large part those have been "tinker around the edge" initiatives once the interstate highway system was constructed. However, I'm proposing anything but a tinker around the edges solution.
              1. Foreign investors flocked to the US when taxes went up in the 90s and fled, relatively speaking, when taxes went down during the 00s. Just saying.
  •  You've Got to Differentiate for Rural People. (0+ / 0-)

    At some level of gas taxation. I don't know about $1 / gallon tax, but at some point house and business properties in rural areas begin to collapse as people start streaming into affordable-transit areas.

    Why not assign the Military-Industrial Complex the missions of climate change and alternative energy?

    We have to fund them, we have to keep increasing the amount we fund them because they're too powerful to cut, and yet they haven't had a credible enemy for a generation. Meanwhile humanity has a very credible enemy we need the MIC's salemanship ability to convince us of.

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Sun May 02, 2010 at 05:07:03 PM PDT

    •  Ahh, that's why the payroll tax deduction is so (1+ / 0-)
      Recommended by:
      highacidity

      important. You began to see the stream away from the rural communities two years ago during the $4+ gallon per gasoline price level.

      However, there were no offsets for the poor and working class in rural areas, so they were hard hit even more so.

      The payroll tax deduction would help significantly offset that pain.

      That said, I only wanted to address a relatively small change in one portion of the government.

      If we brought our military expenditures down to the level of other nations in the world, that'd take care of the problem all by itself as well. I agree.

  •  Agreed. (1+ / 0-)
    Recommended by:
    Yalin

    Europeans pay far more per liter than we ever imagine paying per gallon.  Of course, they also have a fairly intricate infrastructure of public transportation.

    Here is a test to find whether your mission on earth is finished: If you're alive, it isn't.

    by EdgedInBlue on Sun May 02, 2010 at 05:16:03 PM PDT

  •  Thanks for reposting this (1+ / 0-)
    Recommended by:
    Yalin

    hopefully one day we won't have to worry about taxing gasoline, because nobody will be using it. I added the eKos tag and will add it to the database.

    "Interesting. No, wait, the other thing: tedious." -Bender

    by patrickz on Mon May 03, 2010 at 05:06:23 AM PDT

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