With oil trading at below $50 a barrel and gasoline prices diving, now is the time to tax oil and/or gasoline.
Taxing gasoline will:
- Help keep demand low
- Provide federal tax dollars to fund energy independence initiatives
- Provide federal tax dollars to fund the war on terrorism
- Make it more difficult for OPEC and other oil producers to raise prices without impacting demand, limiting the potential for more dollars to flow out of our country
This is something I proposed in 2006 and again in 2007. Excerpted from the 2007 article::
We need to stop talking about freeing ourselves from our addiction to oil and start to actually do something about it.
Although the price of oil has come down since this was written, the key points remain the same:
- We need to encourage research and development of alternative energy sources
- We need to encourage conservation of existing sources
- We need to do this in a way that limits the money funneled to terrorist backers like Iran
- We need to counter the money flowing out to terrorist nations with money flowing into our own government until we can break our addiction to oil
The bottom line for those not planning to read the entire article:
- I propose that for the next five years, a new federal tax on gasoline (not diesel.. just gasoline) be phased in, increasing from 25 cents a gallon the first year to $1.25 in year five and continuing until the end of the war AND the identification of a viable alternative to oil for 50% – 75% of our energy needs.
Painful… sure. So is paying more for gasoline when OPEC raises the price of crude oil… but we get nothing out of it when they raise the price. If we ever expect to kick the oil habit and fund the war on terror… we need to be willing to make some sacrifices.
Now that we have experienced the pain of high prices and are now enjoying lower prices, this is the right time to act, and the window of opportunity may not be very long. It may even be wise to accelerate the proposed phase-in at this point, starting with 50 cents a gallon the first year.
I don’t like taxes, but I think this tax, if done right, will effectively limit the ability of oil producers to raise prices, thereby keeping more money here in the US to fund programs that will benefit the long-term security of our nation.
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Guess you’ve been reading the Obama How-To-Wreck-The-Economy Handbook.
Energy independence comes when Congress and the American people support concurrent work for all alternatives, including coak, oil, gas, wind, solar, nuclear and biomass. Not ethanol.
Perhaps some federal stimulation might be needed.
But taxing oil now takes away capital that must be used for investments and furthe exlporation.
And taxing will keep gasoline demand low?
Have you ever consdiered that not everyone lives in urbans areas where mass transist may exist?
Or that higher taxes on fuel translate to higher retail costs,either dirctly or indirectly?
We in America are on dangerous ground now regrding energy.
We are about to become the horse that died of thirst at the watering hole, if we dont’ extricate our heads from body orifices in whcih they were never meant to be inserted and explore and produce what we have.
Will we need foreign supplies, still?
Yes, during transtion and maybe even some amount, but less than, much less than, what we import.
But taxation is not the way out–unless your’re a Democrat or liberal.
Respectfully, I think you’re last paragraph, the closing, is simply not grounded in any reality, but hopeful, though misguided, wishing.
Econ 101: Supply and demand determine prices. And apparently the state of the world’s and nations’ economies.
Raise taxes to stabilize prices?
This is the absolute worst time to raise taxes on gasoline. High gasoline prices crashed the economy this summer. American infrastructure is designed around transportation. When the price of transportation increases so does the strain on the economy.
A hike in gasoline taxes in America may curb our appetite for oil but it will not curb the appetite of emerging economies. The rest of the world will continue to push demand and the price of oil will rise. Gasoline would become unaffordable with no alternatives in the near future. Your proposed tax increase will send America into a full fledged depression with very few legitimate ways of getting out.
The gasoline tax is a regressive tax. This means that those that can least afford it will pay the most for it. Transportation costs will be pushed onto the consumer just like the surcharge companies charged this summer. The consumer wasn’t able to afford it then and the economy crashed. What is going to happen when we dive further into a depression?
It is never a wise to decision to raise taxes when an economy is teetering on the brink of disaster. If taxes are increased they need to be increased when the economy is on the up swing.
This is what Clinton did in his first term. The first thing Clinton did was increase the gasoline tax. This slowed the recovery but did not stop the recovery. Right now the economy has yet to bottom and a tax increase would do the same as when Hoover raised taxes, which was to further deepen an oncoming recession which then bloomed into a full blown depression.
Say No To Tax Increases.
I’m with CKA in redstate on this, but for different reasons. There was an article in my own state news today about raising fuel taxes and that got my mind working. There has never been a time in recent memory when money apportioned and collected for one reason ended up where it was originated to be sent. Unfortunately government seems to have this big black hole called the general fund and a black hole it is indeed. I dare anyone to find out where the money goes from this fund. If any one really believes that money collected for development of new energy resources will reach that goal, dream on.
My other problem with your proposal is that the recent surge in fuel prices would not have been slowed or stopped by higher taxes. I never saw one move to provide relief for anyone who could not afford gas to drive to work. The reasons for the lower price now is a slowdown in demand and a related slowdown in the economy. For months now the whole economic engine has been intertwined. High fuel prices forced people to cut back on spending and this in turn lead to a further economic slowdown.
States are now thinking about raising gas taxes to cover for loss in revenue. Realistically, how high must taxes be raised to cover all of the ills that face this country today?
Ouch.. not feelin’ the love today
My proposal is based upon the theory that the prices will rise to a level the market will support, regardless of who benefits from the rise in price.
Are higher prices painful? Yes. But when demand recovers, prices will go up anyway.
I share cookiegramma’s concern that money never seems to find it’s way to where it was intended.
But there ultimately will be a tax increase somewhere. I am opposed to an increase on income tax and actually prefer a move towards consumption taxes. The argument that taxing oil now takes away capital needed for exploration doesn’t resonate with me… that would mean that we should hope that oil prices increase so that so that companies will have more revenue to invest and explore… so those higher gas prices we were paying a few short weeks ago were then a good thing?
Given, prices going up will be detrimental to the economy and create a burden on folks (like me) who do not live in urban areas. But the argument that a 25 or 50 cent per gallon tax will push us into a depression, considering this would still be more than two dollars less per gallon we were paying just a few weeks ago, does not seem like a significant risk; the economy didn’t crash because of higher gas prices (although that certainly didn’t help), it crashed because our “leaders” in congress and, to some extent, President Bush did not address major flaws in lending practices and onerous regulations that caused the credit market to collapse. Unfortunately, we are now mortgaging our children’s future to limit the pain we experience in the here and now… but that’s another debate.
But if prices are going to rise anyway (and they likely will) and that money is going to be funneled overseas, would it not be better to direct that revenue into ways to reduce our dependence on foreign oil supplies?
Perhaps I am mistaken … open to any other ideas folks may have …