A large portion of the current tax burden should be shifted to energy and other resource use. This has been advocated by Paul Hawken in his book "Natural Capitalism" and by others. Nothing has yet happened however.
I agree with Sparhawk that this could be part of a Democratic platform, and we need a political strategy to go along with this.
Laundry list under the fold.
(1) The first priority should be to shift revenues for social security and medicare to general revenues, getting rid of the highly regressive payroll tax altogether. This would also eliminate the penalties paid by employers in creating jobs.
(2) Put back the tax cuts made by Bush for the top 2%.
(3) Put on for the next 10 years or so a 2% annual accumulated wealth tax on amounts over $2 millon accumulated value, exclusive of primary home and business assets. Purpose is to retire the bulk of the national debt. Eleventh year and beyond, reduce rate to 1%.
(4) Starting immediately upon first round of tax shift, raise taxes on oil by $10 per barrel by end of 2006, and $10.00 per barrel every year until $2010.
(5) Take significant amount "off the top" to restore electric transportation infrastructure, e.g., convert all transit and school buses to hybrid-electric propulsion, build and expand urban rail transit lines where potential patronage justifies, electrify the mainline freight and passenger railroads, including 4,000-5,000 miles of new high speed 220+ mph lines connecting key cities in East, Midwest, with Texas, Arizona and California, with branches to places like Houston and Las Vegas.
(6) Take steps to encourage people to replace gasoline powered autos with so-called "pluggable hybrids" that can go 30-60 miles on 10% electric power, and longer distances on gasoline (Peter Huber is right about that technology). This could very quickly reduce urban fuel consumption by 80%. Price increase in fuel is needed to prevent increase in gasoline consumption as experienced 1970's-1990's.
(7) Experiment with new forms of auto ownership and pricing, e.g., price by mile rather than monthly payment system. Under this system, if you only need to drive 200 miles per month, you'd save tremendously over monthly car payments and insurance. Current "car sharing" experiments show the way, but will only work with good alternative transit available and in areas where walking/biking is feasible.
(8) As gasoline usage drops, new ways of collecting road taxes to maintain what already exists will be needed to replace gasoline taxes currently dedicated to streets and roads.
Also see www.apolloalliance.org.
Sorry for double post in comments. DSL problems.