Why I support a tax on fossil fuels

Via Sadly, No, I came across this post at TheRant.us which is an evil conservative blog.

Lee Ellis, who runs TheRant.us, apparently supports unfettered use of fossil fuels.

Fossil fuels pollute our environment and make us dependent on the geopolitically unstable Middle East. It leaves our economy vulnerable to supply shocks. Enough said.

So what can done about reducing our fuel consumption? There is one single best way to do it. By heavily taxing it. I may be a liberal, but that doesn’t mean I don’t understand economics. One of the most basic principles of economics is that if the price of something goes up, then consumption will go down. It is my observation that demand for fossil fuels, especially gasoline, is price inelastic, which means the price has to go up a lot in order for consumption to be reduced.

The $1 per gallon tax mentioned in Lee Ellis' post is too little. Gasoline will have to cost over $5 per gallon in order for people to seriously change their behavior, and there has to be a correspondingly high increase in the cost of other petroleum distillates and natural gas.

When the cost of fuel rises, people will change their behaviors to avoid using it. They will drive more fuel efficient cars. The will drive less. They will choose to live in smaller houses that require less fuel oil or natural gas to heat. They will choose to live closer to their workplace, or near public transportation.

High fuel prices might make it profitable for industry to manufacture alternative fuel vehicles—I remain agnostic on this point, and would like to remind everyone that we can achieve extremely significant fuel savings if large numbers of people give up their gas guzzling SUVs in favor of less expensive smaller cars with conventional gasoline engines. I think many environmentalists make a big mistake by touting pie-in-the-sky technologies when fuel consumption can be reduced so much through simple conservation.

What Lee Ellis says about taxes is a typical knee-jerk conservative reaction:

When will the Left ever learn the simple rules of economy: Higher taxes create prosperity for bureaucrats; lower taxes create prosperity for all workers!

The government can’t operate without taxes. It’s funny how the conservatives are all gung-ho about occupying Iraq, but then you suggest a way to help pay for the hundreds of billions of dollars that the operation is costing us, and they throw a big hissy fit.

A tax on fossil fuels will, in fact, make our economy more prosperous, because overuse of fossil fuels imposes significant costs on society. A tax prevents the people driving those gas guzzling SUVs from getting a free ride. A tax will help prevent our great-grandchildren from paying for the occupation of Iraq.

Comments

[Sigmund Carl and Alfred]

Actually, I agree with you on the need for new tax revenue streams. The fact that you somehow managed to stumble onto a good idea is amazing.

That said, more fuel taxes will increase the price of tomatos and all food (I thought an illustration for you would be helpful), for example.

Since the price of gas us already mostly tax, that idea may not be such a hot one.

[nat]

"When the cost of fuel rises, people will change their behaviors to avoid using it."
I'm sure you don't remember the energy crisis of the 70's do you? Although auto makers downsized the cars in response to that, prices of consumer goods rose. Why? Well, goods tend to be delivered by things like trucks and trains. What do they use for fuel? How do people travel when they go on vacations to far-away places? UH HUH. Planes. Planes also use lots of fuel. Gas guzzling SUVs are a problem, but they are far from being the only cause of our problem. People did not really change their behaviors, other than having to wait to get gas on odd or even days, depending on when it was their turn. People still need to get from point A to point B, so how is that behavior going to change, HUH?

You should stop blowing it out your *^%.

[MaxedOutMama]

At $5.00 for a gallon of gas, more than half of the families in my area would go bankrupt. They already drive small, fuel efficient cars, unless they are driving that old boat they got free from Grandma. The largest cause of families being on welfare in this state is lack of transport to get to a job. They can't possibly afford to buy a Prius.

You might want to rethink this idea. Putting it into practice would make a lot of people homeless, it would make a lot of kids leave school to work, it would destroy the economy in entire areas, and it would kill a lot of people. I can also assure you that quite a few people in this area would be chopping down trees to burn to heat their houses in the winter, thus releasing an awful lot of carbon into the air.

It would work to make those upper-echelon people who can afford the gas-guzzling SUVs think about their purchases. However thirty percent of the workforce in this country is living with little or no margin. The type of taxation you are suggesting is the most regressive possible.

I am awed by your lack of compassion for those who are not at least in the middle of the middle class bracket.

BTW, I already drive a small fuel-efficient car. This isn't personal, okay? Keep thinking.

[Square1]

I have to agree with many of the commenters. I am in a one income family of five, with one solitary 4 cylinder vehicle, and gas is already difficult to afford. Why are we one income, you may be asking. Well... because we have only one vehicle, and in order for hubby, who has a stable income to have the fuel to get from point a to point b we conserve. Also there are childcare issues but those not withstanding... My point is we work very hard to stay off of welfare... even though we would probably qualify we much prefer to leave it for those who can't scrape by without it as we so far are able to manage. Driving up the cost of the means we need for hubby to continue to get to his job would perhaps be the gentle push that would have us in the DHS office filling out an application.

Perhaps if you are conerned about people who drive gas guzzling vehicles (and I can relate, I live in red neckville where if you don't drive a large pick-up or SUV then you just don't fit in) perhaps a wiser proposition would be a tax on vehicles over a certain weight or that don't meet a certain requirement for gas mileage.

Your ideas for alternate sources of energy are decent ones... the problem is, the oil industry drives much of our economy. Eliminating it altogehter would have near the same effect that 9/11 had when many of the airlines lost their buisiness and almost went bankrupt without the government stepping in to help. Secondly the politicians don't want to see alternate forms of energy because they make money off of the oil industry... republican and democrat alike. Until something more profitable comes along, development of alternate energy resources is not heavily funded.

[Nina]

I was going to comment, but the others ahead of me said all that I wanted to say. One more thing, I'm a single mom, you tax gas more, and I go on welfare. I drive a small old car, my child depends on me. So go ahead, try your idea out, and when I can't get welfare because all of the other people who also can't afford to drive to work are on it, I'll come stay with you and you can take care or my bills and my child kay? Think before you speak, and get your facts straight!!!!

[gilda]

Young lady, what's all this I hear about tacks on fossil fuels? How will this help our economy? Is there something special in the tacks? Are they made of some special metals? Who is making these? Aren't most tacks made in China or Mexico or Honduras? How is this going to save gas? Oh. You support taxes on fossil fuels? In that case, that's crazy. I'm an old lady and I can't afford any more tax. Bitch.

[gilda]

And where is the magic garden? I don't see any flowers, or even vegetables for that matter. Or is this all a figment of your hallucinations? Don't worry, dear, you'll come down sooner or later.

[Kender]

You are dead wrong dear. We don't need even more taxes on oil. What we need is exactly the opposite.

We need to use all of the oil as fast as we can. Think about it. Once we are rid of oil we will be forced to find other energy sources, and you can go on to post about things you are much better suited to discuss, such as hair care.

I think that it should be mandatory for everyone to have an SUV, the bigger and less fuel efficient the better, and that gas should be subsidized and laws made that force people to drive everywhere, even to the mailbox at the end of their driveway. Public transportation should only be for people too stupid to successfully get a drivers license, so even with everyone owning a huge gas guzzling SUV there would still be plenty of people on the bus.

Besides, if this plan is ever adopted the welfare rolls would drop significantly, as those people on welfare because they "don't have a car to get to a good job in" would no longer have an excuse to not work.

Keep thinking dear.

[Brad R.]

Again, I don't think you address the inherent regressivity of high gas taxes. If you increase taxes on gasoline without providing people with viable alternatives (i.e., efficient public transportation), it will be a major cost of living increase.

Again, I'd prefer a direct sales tax on cars that negatively correlates with gas mileage (the lower the gas mileage, the higher the sales tax). This way, people have greater incentive to buy more fuel-efficient cars without a regressive hike in prices.

I agree with your general ideals, but not how you want to implement them.

Oh, and Kender, I see you've posted Michael Schiavo's phone number on your blog so that your readers can harass him. Very Christian of you (and no, I don't think saying "I am not saying call this number" excuses you- it's like putting a bag of heroin in front of a bunch of junkies and saying, "I am not telling you to inject this into your veins.").

[Kender]

Brad? Where did you get the idea that I am christian?

And I also said I may call. And if I get bored I might.....but if I do you can bet that it will be from a payphone in LA and it will be 2 AM in FL.

As other bloggers have noted...I am a mean bastard, but I realize it.

[joe]

First off, thanks for the post on my blog, now to return the favor:

What many of those before me seem to ignore is that Europe already has high taxes on gasoline, and their economies haven't grinded to a halt. Of course, Europe is a lot different than the US. It would be very difficult for many people to pay $5/gal for gas, especially in the west. But that is only because the idiots who designed these cities didn't consider the notion that maybe it wasn't the best idea to have people driving 30 miles to work every day.

I think it would be a very good idea to have the kind of economic incentive for public transportation that they have in Europe. So what if people can't afford to pay $5/gal. That's the point. Although we can't place 100% of the blame for America's gigantic energy consumption at the feet of drivers, it does have a lot to do with it. And ignoring the environmental impact, what about the political costs? Not that I would say that the Iraq war was primarily about oil, I don't see how anybody could argue that we would have any interest in the region if it weren't for what lay underneath it.

It would be really nice if people curtailed the size of their vehicles as a simple means to lower energy consumption. But as another contrast to Europeans, Americans seem to enjoy wasting money simply to show how much money they have to waste. If oil prices reach a certain level, look out for rap songs gloating about "my 8 mile/gallon H2."

Anyway, like others I am waiting for the day when we no longer have a carbon-based energy industry. But the fact remains that although some companies may be testing the alternative-fuel market, most are firmly invested in the status-quo. And the status-quo means oil. And as long as technological advances continue in the recovery of oil, Exxon and its buddies will keep us in cheap and plenty supply for at least a century.

[Kender]

Joe..what do you mean the europeans economies havent ground to a halt. They are close. They have minimal growth and huge unemployment. Taxes are onerous (averaging 25% when it is all figured in) and work ethic is nonexistant, But then, that is a socialist "paradise" for you.

[TJ]

Abigail - as someone who drive 60m every day for work I could not afford to pay more for gas, nor can I currently afford a new, more efficient, vehicle. Nor can I afford to live closer to work. AND I make a very good living, enough so to permit my wife to stay home and raise our child. (Maybe if my gas prices were less per month I could save up for a new vehicle.)

"What many of those before me seem to ignore is that Europe already has high taxes on gasoline, and their economies haven't grinded (sic) to a halt."
1) Excuse me, but have you actually looked at France's or Germany's economies lately? They are in shambles.
2) You are correct in that the US != EU ... our spaciousness is a double-edged sword, cutting in both ways on this topic. Again, I can't afford to live any closer to work (real estate in this area has exploded upwards, and in fact I couldn't afford to buy my house if I were buying now)

The correct answer is for other alternatives to be developed and priced competitively, and allowing the market to drive the price / consumers.

Also - mass transit is not a silver bullet; that energy comes from some where ... I personally think nuclear would be great, but I am suspecting you would disagree? (and if so - what would you propose? ... Solar Power is getting more efficient, but is still not at a feasible cost-benefit yet ... )

/TJ
NIF