Friday, February 23, 2007

Nobody likes a gas tax.

It hits us on the item we’re most price-sensitive about. (We all have friends and family members who don’t even look at the price of their groceries or shoes, but who will drive across town to find the big sign that shows a five-cent lower price on gas.) It’s regressive. It makes us feel the terrorists, or cartels, or Europhile’s have beaten us. Heck, high gas prices are downright un-American!

And yet…

If we don’t reduce our consumption of foreign oil, we’re funding just those terrorists and cartels we profess to hate. (Despite Great Britain’s offshore oil fields, we aren’t really funding the Europeans in this way.) If we don’t stop burning so much fossil fuel, we risk dunking our coasts – where a disproportionate percentage of American people and economic activity reside – permanently under the seas. We’ll miss the relatively mild dislocations caused by Hurricane Katrina.

Consumption taxes are the most even-handed, least distortive ways for a government to influence an economy. Through the Earned Income Tax Credit, we can return some of the excess revenue to the members of our society who need it most.

Gas taxes are the worst solution to our dependence on foreign oil and our penchant to cause global warming. Except for all of the other solutions that have ever been tried.

Tuesday, February 13, 2007

Repeat after me: Gas Tax.

To paraphrase Heroes: Tax the carbon, save the world.

It needs to be at least $1 per gallon, probably closer to $2.

Will it damage the economy? Certainly, in the short run it can't help but do so. What it will also do is change a dynamic that desperately needs to be changed.

We all watched the SUV craze of the 90s. Many of us bought in. We saw the MPG disappear completely off automobile ads. We craved a Hummer. Gas was free, why not?

Gasoline needs to stay above $3/gallon (preferibly $4) so fuel efficiency begins to feel more like fiscal necessity than moral virtue. It's the only way we get from here to a sustainable future.

PS Worldwide livestock production is responsible for more climate change gasses than all the motor vehicles in the world, according to the latest U.N. studies. We'll talk about the flesh tax later...

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