Against a Gas Tax
As of Monday, the average price of gasoline in the U.S. was down to $2.22 a gallon, brushing up against $1.50 in some places. The price of oil was under $60/bbl.
When gas and oil prices fall, there are always two reactions: first, great lamentations that alternative and renewable energy investments no longer make economic sense, and second, wishes (upon a star) that America had the political chutzpah to impose a new gas tax.
Despite its appeal in some quarters, the gas tax is not a good idea. It costs enormous political capital and pays insufficient returns. If one had to be done and someone were willing to sail through the political sh*tstorm to do it, it ought to be like Troy Schneider suggests here -- revenue neutral, paid for with a reduction in payroll taxes. It would be a tidy, self-contained program, sheltering the revenue from pork-hungry hands; it would produce more of what we want (work) and less of what we don't (pollution). It's a good tweak.
What it will not do is significantly reduce the greenhouse gas emissions of the transportation sector. No reasonable price signal, on carbon generally or gasoline specifically, will do that. The solution is not more virtuous behavior or slightly more fuel economy, but new infrastructure.
To achieve the atmospheric carbon targets scientists urge upon us with increasing dread, emissions from transportation need to drop exponentially, not logarithmically.
Since the turn of the century we've seen the price of a barrel of oil rocket from $20 to well over $100 and now back down to $60. U.S. average gas prices have gone from under a buck per gallon to north of $4, only to plunge now to just over $2. In the midst of this kind of volatility and unpredictability, no gas or carbon tax with a chance of passing will send a price signal big enough to be decisive. As Joe Romm points out, it would take a carbon price of $400 per metric ton -- wildly higher than anything contemplated in developed world carbon markets -- to increase the price of gasoline by $1 a gallon.
Prices will push consumers to conserve, but that's almost beside the point. Cars and trucks aren't going to change in degree of fuel economy, via tweaks to wind resistance and fuel injection systems and commuting habits. They're going to change in kind. We'll soon find ourselves seeking the most rapid possible turnover of the fleet from gasoline vehicles to non-gasoline vehicles. Whether plug-in hybrids, biofuel vehicles, or hydrogen vehicles win out in the end (hint: it will be plug-ins), it will require new fueling infrastructure, either an enhanced electrical grid, biofuel stations, or hydrogen stations. We also need large-scale shifts to public transit and rail, more bike and pedestrian paths, and transit-oriented development.
In short, the changes we need in transportation are not something car companies or consumers can do on their own. What's needed is beyond new habits and new vehicles -- it's new infrastructure.
We need a transportation infrastructure for the 21st century. You don't get highways by raising the price of horses or bridges by raising the price of ferry boats. You don't get an electrical grid by raising the price of lamp oil. And you don't get a 21st century transportation infrastructure -- rail, transit, bike and pedestrian paths, grid, and PHVs -- by raising the price of gasoline. That's fiddling on the margins.
It's time to start thinking at the scale of the problem.
Follow David Roberts on Twitter: www.twitter.com/david_h_roberts
Loading comments…
Want to reply to a comment? Hint: Click "Reply" at the bottom of the comment; after being approved your comment will appear directly underneath the comment you replied to
I assume Huffington Post and David Roberts are just being cheeky with this post. But I do agree that in the present circumstances there might be a challenge in implementing a tax now, so it should be revenue neutral. I would add that it should initially also be modest, to avoid too much opposition. America is stuck with an unviable auto industry because the sector build huge inefficient vehicles predicated on cheap oil. That is no longer tenable and nothing sends this message more clearly than price.
You are mistaking political reality for what makes sense. Having a gas tax makes sense. Not being able to impose one is political reality. A gas tax that puts the price of gas at $8/gallon is quite effective. And nobody ever said that it should be less. More, in this case, is better. So you are really just wrestling with your own straw man here.
A politician defers to the political reality; a leader changes the political reality.
Are you listening, Barack?
He will not change this on a substantial level and I wouldn't expect him to. As a politician you know hot to pick your fights. This is not one even a Barack Obama could win.
The oil tax is a necessity as a matter of national security. We need to lessen the amount of money leaving this country. What the author seems not to understand that an electrical infrastructure needs to be paid for as well. A tax on oil is the stick which makes the country eat the carrot. Do you really think people who have rushed out to buy SUVs would have done so if there were even a 50 cent per gallon gas tax? Do you know how much money would be raised? Have you even compared how other countries are doing when gas goes up by so much when they have these taxes in place? I lived in Denmark and when prices went up, they were relatively unfazed. The gas tax is not politically impossible, especially if they are implemented when prices are low. People understand about global warming. Your whole article does nothing more than make statements that seem like common sense without any further investigation.
Good post. I think a couple cents per gallon increase in the gas tax is very politically feasible considering gas prices have just been halved in a matter of a few months. If the govt says they'll use the money for infrastructure spending and for creating jobs it may actually become politically popular. Global warming is not even in the equation here. That's just a radical left wing political slogan.
"Global warming is not even in the equation here. That's just a radical left wing political slogan."
Tell that to the polar bears.
A carbon dioxide emissions fee(a carbon tax) of about $100 per ton of carbon dioxide emitted would be even more effective. It would tax carbon dioxide emissions from oil, coal and natural gas. It is estimated the $100 per ton of fee on carbon dioxide emissions would bring in about $600 billion dollars per year. It would only raise gas prices by about $1 per gallon.
The www.carbon
OK, we need to focus on implementing new green infrastructure. How, exactly should this be funded? A carbon tax on fossil fuels could accomplish that, while encouraging the transition by making the fossil fuels more expensive.
A "gasoline tax" may be politically difficult, but a carbon tax targeting global warming issues could be made acceptable.
The recent spike in gas prices did more to advance the cause of renewable energy than decades of talk in Washington. If gasoline taxes do not keep gas prices relatively high then what possible incentive will people have to invest large amounts of money buying new fuel efficient or alternative fuel vehicles? Are you going to mandate that people buy new cars? If your alternative is tax incentives for fuel efficient cars how are you going to pay for the incentives? In case you haven't noticed our government is already short of cash and people are starting to question the us govt bond rating which was unthinkable in the past.
We shouldn't have any taxes on the consumption or production (effectively same thing) of any good or service, regardless of what we think of them. We shouldn't be taxing income or imports (effectively a productivity tax as well). The only tax basis that doesn't impede the prosperity of responsible individuals and businesses is a debt tax -- aka interest.
In the wake of the dramatic failure of private finance, we're rapidly moving in the direction of government becoming the predominant source of credit for the economy. The public is backstopping the risk of financing the private sector, and therefore the interest on this credit should be employed in the public interest: infrastructure, healthcare, education, job training, etc.
It's become clear that debt, although essential to the health of any economy, is a perilous risk to the public interest. By taking on debt, borrowers owe the government for the implicit risk of their indebtedness to the prosperity of the nation. The more aggressively the private sector pursues growth, the more it must pay as a hedge against the boom becoming a bust and as revenue for the stimulus to get the ball rolling again.
Yes, this would make credit more expensive, but as we've seen, in the long-run, cheap credit can end up costing our economy vastly more than expensive credit. Sort of like gasoline.
How are you going to pay for your infrastructure projects? Many people have said, usually with Thomas Friedman leading the way, that a high gas tax would generate revenue to pay for the infrastructure projects that you listed. It cannot be revenue neutral, as the tax would go directly to improving the infrastructure. It isn't a tax to fund education or the military, so it can not replace any other tax. As for political cost, I'm not sure. All I know is that I'm tired of people complaining about taxes and still expecting their food to be safe, the roads to be in good shape, schools funded, and about a hundred other things government does everyday for people.
No tax is desirable when you are on receiving end of it. But our country badly needs major infrastructure investments. A gas tax that increases by some predictable amount each year would be good for our country. The revenue raised could be targeted and used for advancement of greener energy technologies. It could help build a new electrical grid that would help connect major areas with renewable energy potential with the rest of the country. A high speed rail network could also fall into the same category. If someone has a better alternative for how we are going to pay for such national investments I'd like to hear them.
We need to save the auto companies but not to produce those giant behemoths that burn so much gas and take up so much of the road.
First thing that needs to be done is to raise the tax on gas so that it stays above $4.00 a gallon to force the auto companies and their idiot customers to buy economical small cars. If we do this and Detroit retools to build smaller cars we can also make freeway lanes narrower and make new lanes without making new freeways. There would be more room for parking, so on and so forth.
The money raised with gas tax could be used to build high speed trains on dedicated tracks going coast to coast along highways 10, 20, 40, 80, and north and south along side 5, 95 and through the middle of the country. This would provide jobs and ultimately stop our need to import oil.
If we only use our heads we can make an entire sane and prosperous nation.
If we let greed and self indulgents take over again it is back down tnto the sewer.
I have been through this before in the 70's and just as soon as the shortage disappeared so did the concern over conservation of resources.
1) I'm not sure trucking shouldn't bear some of the costs. It was their lobbyists, after all, who helped kill the RRs in the 50s and 60s (via government rate controls). But, as any "punishment" would land most heavily on the truckers, as opposed to the trucking owners, I'd let it slide.
2) We not only need a new infrastructure, but we need new ideas.... traditional rail won't work in a lot of places. We need to farm the idea out to Disney (or some comparable group accustomed to moving large numbers of people in a number of different ways.
By building smaller footprint alternatives (like really light rail: maybe the size of a roller coaster car) that can be dispatched as needed and may be light enough to share space with roads and sidewalks, we might even save money on construction.
I also disagree. There should be a gas tax and it should be fairly high. But this tax should not be on diesel or jet fuel. Those industries are already flooded with taxes and could not survive the increase. I am refering to the trucking industry and airlines.
It should also be a graduated tax based on the size of your vehicle and the estimated fuel usage of that vehicle. This way everyone who drives a vehicle pays a share of the tax. It doesn't matter how much you make or your social status, but on the vehicle you drive. Half of the monies collected should go towards road and bridge repairs and the other half towards New Energy solutions, whether that be solar, wind or electrical.
I remember the 70's extremely well. When you could only get your gasoline on even or odd days and the speed limit was 55mph. We apparently didn't learn our lesson from that time and if we don't step up and do something now we are going to be right back where we were, spending outrageous amounts of money on foreign fuel.
David,
You are wrong. We need to implement an emissions tax of a $100 per ton of carbon dioxide, which is about $1 per gallon, to demonstrate that we do have the political will. Now is the time to do it!
1) It would send a clear signal that we have the political will to become energy independent
2) It would eliminate the need for a ridiculously complex(easy to game) cap and trade system.
3) It would generate about $600 billion per year, which would eliminate the deficit and leave about $100 billion and year to finance the development of the new energy efficient infrastructure.
Rather than revenue neutral, it should be a source of revenue and a demonstration of national will. It is way past time to stop sending $700 billion dollars a year, for oil, out of this country . We need to retain it here to invest in our infrastructure.
This is exactly the time to impose a gas tax. Think of all the money we sent out of the US over the last 12 months with soaring gas prices. The high price of gas did change habits ( like using public transportation, and driving less).
People are now desensitized to paying $3-4 per gallon.
The revenue generated could be put to good economic use rebuilding infrastructure, expanding/improving public transportation and green technologies.
All gas tax revenue would have to be mandated to be spent in the US, creating jobs and helping us out of the mess we are in.
I'm not 100% sure I agree with this.
Your primary argument against a gas tax seems to be that it won't be enough to stop climate change -- and I agree. We will still need other alternatives, wind, solar, etc. We'll still need to work on plugin hybrids and plugin electric vehicles.
But as you note, most of these transit alternatives require not just a new type of engine, but a new infrastructure. In other words, they're a BIG DEAL, and unlikely to take off overnight.
So why make the perfect the enemy of the good? Yes, ultimately we need to switch to a different method of transit. But in the meantime, where's the problem with using government's taxation power to nudge people in the direction of doing the right thing? We could improve -- not eliminate, but improve -- the environmental impact of all the car's we've built, and we could use the tax money for further future-thinking environmen
Yes, it would require a lot of political capital to pas a gas tax, especially in today's economy -- you'd need to balance it out elsewhere; make it less convenient to drive, but more convenient to take public transportation.
You must be logged in to comment. Log in or connect with
