For several years my buddy and I have been arguing gas tax proposals. Sort of a Euro method.

He believes keep gas cheap-no additional tax. Better for the economy.

I believe gas is already and still cheap and when it was cheaper (a couple years ago) an additional tax would have served a multi purpose. We have become waay too dependent on cheapo energy.

Follow along- Real gas price at 1.20/ gal additional tax to say 2.00 =/gal. Now people tend to use less, more incentive for efficiency. Money raised is used for R&D into alternatives.

Cheap gas helped to cause a demand problem.- too many hulks on the road sucking it up. No need to conserve! Its cheap!

If Higher prices (even as a tax) had been the norm- more fuel savers would be out there and we would not have such high demand today. We would be further along on R&D towards a solution.

Now the high fuel price is going to hit the fan and we have nothing to show for it except a further dependent populace that thinks it's their god given right to drive these massive piles of ****.

What do you think?

People that are for a larger gas tax forget that it's the commercial vehicles that use a large proportion of gas in this country and are directly impacted if the tax raises significantly. This increases the prices of goods and services to offset the tax. I'm not saying raising the tax is a bad idea altogether--for me it depends on what the additional tax would be used for. Alternative energy research, incentives would be a possible good use in my mind. So basically it's not just the people that are pissing you off by driving an SUV while you cram yourself into your Prius that would be impacted.

The flaw in your argument is the fact that the United States is now competing for gas with larger and growing markets. China used to ride bikes now everyone has an engine. We will see a continuation of rising costs as the global market in places such as China set demand at higher levels no matter what the U.S. can do on the short term.

The U.S. needs a comprehensive energy policy that addresses both the supply crunch we feel now, coupled with a goal of getting out of petroleum all together. There is broad consensus that hydrogen and fuel cells are the best long-term solution ... the issue is when and how we get there. The forces that favor a rapid move to hydrogen see scenarios that would get us there in a decade. Those who think it's a pipe dream say its closer to 30-plus years away. In either case, the only thing that will address the CO2 issue is to move out of petroluem based fuels. thatsmybush makes a very correct statement...China and other developing countries are going to have the biggest impact on oil availablity and market stability going forward, the current issues with energy security impacting the markets notwithstanding. The taxation plans used in Europe absolutely have shaped that market much differently from the U.S. in terms of what people buy and drive. However, the high cost of transportation and energy have severly hampered those economies. Cheap energy is the core of our economy, that's why energy prices provided such a huge drag on growth.

The odd thing about Corporate Average Fuel Economy regulations -- the other much talked about method of reducing consumption along with taxation -- is that it actually increases the use of Middle East Oil. How is that? It's simple economics. As the demand is constrained, the highest cost producers go off line first. This is exactly what happened to the U.S. oil production industry in the period around 1986-88 when gas hit its lowest historic price levels. This was also the highest point for average fleet fuel economy. As prices dropped, 2/3 of the refining capacity in the U.S. was taken off line and mothballed. Wonder why we get these huge price spikes in gasoline in the summer? That has more to do with it than the price of a barrel of oil. As CAFE was frozen under the Clinton administration (funny how the environmentalists were all but silent on this during the 8-year freeze until Bush hiked the CAFE for trucks last year), the vehicle mix migrated to SUVs and other light duty trucks. And why not? Gas was so cheap, and the affordability of vehicles was never greater, people simply took their auto buying dollars and purchased more vehicle. That trend has continued to today where the average of the fleet fuel economy has come down significanltly.

So either way you look at it, the policy we have is a lose-lose. The cycle will repeat itself as long as the U.S. policy is for cheap and abundant petroleum. The only answer long term is to get to hydrogen.

I think gas is really cheap in America, but I believe that europeans drive smaller cars because of tight parking spaces, rather than the price of gas. Otherwise, they wouldn't drive 140+km/h on the highways. As much as I would love people to drive smaller cars and live closer to where they work, I very much doubt that even $5/gallon prices will make much difference, except possibly for the poor and lower middle class.

That's a very flawed argument, and others have pointed out key flaws. I'll point out another: it assumes that people can replace their "gas guzzlers" with with "fuel savers." That's an idealized solution, but it's not really practical. People aren't just going to give them away. So who is going to buy all the guzzlers? If they are expensive to operate, their value diminishes. Plus, as everyone tries to dump them, their already lowered market value will drop significantly, making them much harder to sell. A negative equity situation makes purchasing a new "fuel saver" difficult for a lot of people, especially since their value now increases due to the fact that everyone wants one. Then it all comes full circle. Eventually, the guzzlers will become cheap enough and the savers expensive enough that it makes sense to buy (or keep) a guzzler, burn the gas, and pay the extra tax. Problem solved? Hardly.

First, I think the feds have too much money already, so I'm against any more taxes in any form; that is, unless an increased gas tax would be offset by lower other taxes.

Second, with increased oil prices, if American companies are profiting from it, there should be increased income tax revenues anyway.

Third, if the increase in gas taxes would be directly and solely invested in fast mass transportation, like high speed rail, I'd be for it. That rarely happens, though. The government gets their hands on more money, and rarely do they apply it as it was originally intended (like lottery funds for education).

The debate question was boiled down for simplicity. I really like the multi directional viewpoints taken.

RE: The tax in question. I'm pretty sure it could be implemented is such a way as to reduce commercial use impact.

RE: The Chinese, Indian and other competition. Yes- we (in US) are three percent of the world population consiming 40% of it's resources and 25% of it's fuel energy. They want what we want and are coming on line now. We promote consumtive behavior around the world with our Mickey D's and Gaps placed globally. This is no surprise and a whole topic in itself..

RE: CAFE and price points of production. That is a good argument and economically valid. Have to give that one further thought.

RE: Euro parking more a factor than fuel prices. Also a good point. Their cities are certainly better off with smaller cars...why not ours?

RE: What to do with the current guzzlers? This is what may have been avoided with the raised tax/higher fuel costs. There would currently be less of them on the road if gas had Not been at $1.00/ gal or so for so long. It became entrenched, the ways of waste- and now the chickens may come home to roost. What would happen if gas were next month at 3.00/ gal? I am guessing more of them for sale and a lot less driving of them. It would hurt alot of folks. Tha'ts a shame. I don't know how else to address it.

RE: Govt use of the money raised and the appropriatness (sp) of the spending. Yes of course it would need to be used properly. High speed mass transit etc is a great idea.

If Kerry (upon his election ;-) implements higher fuel taxes he will be seen as a hoodlum if not worse. This presents the problem of how best to deal with our dependency. Just let market forces shake it out? If price increase and supply demand force gas to 3.50 or 4.00/ gallon we could be in some serious hurt eh? Too bad Clinton didn't force the issue HuH? He's the bad guy I suppose....

What kinds of cars do poor people drive, and how much do they drive? The point is how much would the tax hurt them.

If poor people are driving 20 year old Buicks or pickups (lots of those, actually) with badly maintained 8 cylinder engines, they might well be using more fuel than the new SUVs of "rich people" (and polluting far more, too). If they must live 30 (or more) miles from their jobs, because housing is too expensive close by, then even if they are using more fuel efficient, cheaper cars, they could be burning more, and paying more, than those driving 5 miles to work. Add several dollars a day of taxes, and you could be breaking them. For many of us, it really won't matter much in the big scheme of things.

Plus, more exensive gas could force more people into econoboxes that are not nearly as safe, motorcycles, or using money for gas taxes that could have been used for maintenance, decent tires, insurance, etc. Some of the gain in less fuel usage could be offset by other real, but indirect, costs.

Well, I suppose that keeping America dependent on a finite and increasingly costly resource with faith that God(?) will drop an alternative in our laps despite soft-pedaling development in those areas is an innovation in self-deception and sloth.

Well, I suppose that keeping America dependent on a finite and increasingly costly resource with faith that God(?) will drop an alternative in our laps despite soft-pedaling development in those areas is an innovation in self-deception and sloth.

Ignoring economics is no way to go through life.

That's a very flawed argument, and others have pointed out key flaws. I'll point out another: it assumes that people can replace their "gas guzzlers" with with "fuel savers." That's an idealized solution, but it's not really practical. People aren't just going to give them away. So who is going to buy all the guzzlers? If they are expensive to operate, their value diminishes. Plus, as everyone tries to dump them, their already lowered market value will drop significantly, making them much harder to sell. A negative equity situation makes purchasing a new "fuel saver" difficult for a lot of people, especially since their value now increases due to the fact that everyone wants one. Then it all comes full circle. Eventually, the guzzlers will become cheap enough and the savers expensive enough that it makes sense to buy (or keep) a guzzler, burn the gas, and pay the extra tax. Problem solved? Hardly.
You left out a couple key factors in your argument:

1) You assume that Detroit will continue to make "guzzlers" when the market evaporates. If no one is buying them, they won't make them.

2) You seem to assert that gas is infinite in supply. It isn't.

It would take at least ten years from start to phase out inefficient autos. Regardless, taxing gas isn't the answer. Raising the minimum MPG requirements for all vehicles is a much better course. The onus should be on Detroit to build better products.

I never mentioned Detroit continuing to make "guzzlers" when the market evaporates. I only talked about people who own them now trying to get rid of them. If there is no market, not only will Detroit not make them, but no one can sell their used vehicles either.

The other thing is that gas is infinite in supply, like it or not. Every time I need it, it's there, so it must be infinite. Personally, I think we should all buy gas guzzlers and use it up as fast as possible. The faster we use it up, the more incentive there will be to develop something else, and the Arab nations and Iran will go back to being insignificant backwater outposts that only show up in Kipling novels.

. . .

People that are for a larger gas tax forget that it's the commercial vehicles that use a large proportion of gas in this country and are directly impacted if the tax raises significantly. This increases the prices of goods and services to offset the tax. I'm not saying raising the tax is a bad idea altogether--for me it depends on what the additional tax would be used for. Alternative energy research, incentives would be a possible good use in my mind. So basically it's not just the people that are pissing you off by driving an SUV while you cram yourself into your Prius that would be impacted.

First of all, most commercial vehicles use diesel, not gas.

Secondly, fuel tax paid for commercial use is (last time I owned a business vehicle) tax-deductable.

Also, the tax on diesel is usually lower than on gasoline, and state road-use taxes are another whole deal altogether.

In short, raising the "per gallon" fuel tax results in very little increase in shipping charges.

[QUOTE=DougSloan]What kinds of cars do poor people drive, and how much do they drive?

Poor people will drive the SUVs and HumVees the rich folk cast off. ;-)

Seriously Doug- I am guessing you must also advocate socialized medicine; what with your concern for the poor people and all.... Good for you, it's nice to see concern for the less fortunate.

I'm sorry I had to miss out on this today. I started the thread with the intention of being here to participate, then ended up going to the lake (Tahoe) on business.

It would appear that fuel costs are escalating on a price/bbl basis. What I can't understand is around here (usually) at the first sign of such rise the gas stations go through the roof. According to 44.00/bbl cost I would guesstimate our usual cost would be about 2.35 here. Instead it is at 1.87. Are the Gas Company's holding back on price increases to benefit their buddy in office? Want more of the same for the next four? What happens after November when Kerry gets elected and the gas-cos raise fuel to 2.65. Fun City eh?

If we had collected increased taxes on gasoline for the past dozen years would we be better prepared for the future? Would folks have demanded more efficiency in their vehicles? Bought smaller cars? With fuel at 1.85 gallon it costs much less than milk or orange juice. Is this a real cost that reflects all aspects of the negative impacts fuel usage affects across the board?

If there is a near future that sees rationing and $4.00 actual fuel cost we could expect much knashing of teeth and finger pointing at (take your pick) who's to blame.

Then we will go out to our Suburbans and whimper 'damn guvment- they should have done better by us'...

For several years my buddy and I have been arguing gas tax proposals. Sort of a Euro method.

What do you think?

I think more tax on gas is a STUPID idea!!!! Here's why, your going to make the poor people poorer! These people cannot afford nice gas new gas saving cars and in America in general the bus system is incomplete, does not run at all hours, or can get violent. So no don't increase the gas tax and place more burdens on the poor.

INSTEAD, increase the taxes on booze, this might help some drunks to stop drinking, and if not then it will at least help pay for their medical cost of being drunk!!!

What constitutes a "gas guzzler?" And why single out Detroit....it's Toytota that has gained 50 percent volume gains at Lexus with "gas guzzling SUVs," It's Toyota that is building a massive truck plant in San Antonio Texas to build "gas guzzling" pickups and full-size SUVs. It's Nissan that is now selling the Armada and Titan -- boasting them as being the biggest and most powerful "gas guzzling" SUVs. It's Volkswagen that is selling the "gas guzzling" V-10 Touragand V-8 Tourag. It's Porche for Pete's sake that is selling a frickin' "gas guzzling" SUV. What Detroit conspiracy would you be referencing?

And see my above post on CAFE. If this issue is about foriegn oil...then CAFE is the enemy, not the savior.

I think more tax on gas is a STUPID idea!!!! Here's why, your going to make the poor people poorer! These people cannot afford nice gas new gas saving cars and in America in general the bus system is incomplete, does not run at all hours, or can get violent. So no don't increase the gas tax and place more burdens on the poor.

INSTEAD, increase the taxes on booze, this might help some drunks to stop drinking, and if not then it will at least help pay for their medical cost of being drunk!!!

Wait a minute... all this concern for the poor people. Aren't you proposing higher taxes on alcohol? Who swills all that beer? I'll tell you; POOR people. Same with cigarettes. Those most hit by the increased beer and ciggy taxes are the poor people. I think we'd be doing 'em a favor by pushing beer and ciggy taxes through the roof. Then they'll quit the foul habits. They'll be healthier and live longer! They don't have medical insurance anyway... don't you want them to clean up their health situations? You really want to help the poor people right?

I think we should have higher taxes on junk food and fast food also. Make a doughnut twice as expensive as an apple. That'll get 'em to eat right too!

I know! A fat tax! Hah! Step up to the scale maam... we tax you by the pound...

Just think, it all started with a lowly increase in the federal gas tax...

;-)

Maybe we should stop screwing around with this small scale stuff and take 100% of everyone's income. This will solve every problem that exists today. There is no problem that cannot be solved through taxation.

Power to the state! They're already doing such a fine job spending our money as it is...why not throw in the towel and just hand it over. After all, how did Mr. Kerry put it..."Help is on the way!"

INSTEAD, increase the taxes on booze, this might help some drunks to stop drinking, and if not then it will at least help pay for their medical cost of being drunk!!!
Increased tax on booze will not help a drunk to stop drinking. It isn't an economic issue. Do you think the high prices on heroin and cocaine stop people from buying those items?

Why are you people so concerned with what other people do? Can't you just leave others to live their lives as they see fit? When the market as a whole determines that the environmental cost of burning hydrocarbons is too high, the market will dictate change, not some freak on a fixie. There is no shortage of oil, there won't be for at least 50 years. World oil reserves have increased every year for 40 years. The largest oil fields surely have yet to be discovered as most of the worlds oceans have yet to be explored. The incredible folks in oil exploration are moving from 1800 meter drilling capability to 3000 meter which will open up huge expanses of potential supplies.

I would have to disagree about the reserves. We have known where the oil is for quite some time, the difference being if it was economically feasible to get at it. The increased technology does allow for better ability at extraction, but from the figures I've seen, most analysts believe the recovery of oil is near a peak and may start to decline within the next few to ten years. With increased demand coming on from Asia, the problem is made worse. With potential instability in the worlds major Mid East fields the problem is made worse yet.

Even IF there is no problem with getting all the oil we care to burn, if we suspect the burning of fossil fuel may cause climate problems, do we really want to?