Raise That Gas Tax!

The Washington Post thinks you’re not paying enough for gas*:

In a perfect world, we’d like to see a gas tax that was the equivalent of oil at $100 per barrel. This would send a loud-and-clear signal to drivers to continue eschewing gas guzzlers for fuel sippers and mass transit. Automakers would get the message to speed up production of motor vehicles that meet or exceed the 35 miles per gallon by 2020 mandated by Congress last year. Instead of the money going to countries that have U.S. interests at heart in the same way a dealer cares about a junkie, the revenue would stay here — and it could all be returned to the American people in the form of tax rebates.

(via Greg Mankiw)

* $2.25 a gallon average in New Mexico today, down 3 cents from yesterday. Source: AAA


  1. I’ve thought for a long time that we should have raised the gas tax in the 80’s when gas prices fell, so that the price of gas kept up with inflation, and we didn’t lose 20+ years of research and development into alternative energies and fuel efficiency. But the possibility of a depression makes me more hesitant at the moment. I wonder whether this current collapse was partly triggered by high energy prices? (Was the increased price of transportation, and everything that goes along with it, the expense that pushed some new homeowners into foreclosure? Exurban developments became much more expensive very suddenly this summer.)

  2. With all due respect Eric Fairfield does a pretty good imitation of George W. Bush there. You know, Bush has run a totally incompetent administration that Republicans will be pointing to for years as proving that government can’t do anything right.

    How about

    0.40 in lower payroll taxes
    0.40 in infrastructure
    0.20 in R&D

    or some such. Never put someone in charge of something they believe can’t work.

  3. Eli,
    You had fun with the ad hominem attack.

    My point, apparently not well presented, is that tax dollars routinely vanish into new and larger government. They do not come back, as you suggest, directly to companies before the government takes a large cut. Thus a dollar in taxes is worth $0.10 in direct investment. How do you get your dollar back in investment once you give it to the government? To me, you have broken down the $0.10 in rebates not the original $1.00 in taxes.

    As to comparing me to W., you might consider learning who I am before you say such things.

  4. I understand Eric pessimism and Eli’s optimism, but i think a 100% rebate (per CAPITA over 18) is possible. Everyone knows how to divide $lots/people to get THEIR share and a check that comes out short would NOT be popular.

    That said, the gov’t shouda put a tax in that rises as crude prices fall. Too late now, but not for the future.

  5. Sorry Eric, that was not an attack on you, but on the incredibly corrosive “government bad” troph which has caused huge damage. It is simply unreasonable to think that anyone who holds to it will ever make government work, and New Orleans is a real example of where government has to work.

    One of the worst things has been that those in favor of drowning the government in a bathtub have not been challenged in recent years. I hope that they will be challenged more frequently. If they don’t like it, well, that is their problem

    OTOH, yes, there probably will be some friction in the system as Dave points out, but now is a good time to start with oil prices so low because of how unregulated free enterprise has ruined the economy.

  6. Two things for Dave and Eli.

    Friends and i have been trying to track back and assign blame for the current financial and housing mess.

    Democrats and Republicans all have a share of the blame.

    For instance, the mess at Freddie Mac and Fannie Mae goes back a long time, mostly with the support of House republicans who appear to have thought “Housing owning good.” without having the second thought “What if they can’t pay the mortgage?”

    As to Wall Street, the people who set up the rules so that the greedy on Wall Street could profit handsomely appear, again, to be congress. Even Obama had major contributions from the financial industry and tort lawyers.

    On renewable energy, I have a simple plan. I have a small company. We are making good new products. These products will provide electricity more cheaply and with a smaller carbon footprint than existing products do.

    I figure that if we make good products and sell them at a good value, without the need for government subsidies, then we will do fine. We should make a lot of money. We plan to use this money to do other good things.

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