Gas Tax: Dilemma for Democrats

Whether, and when, to propose a gas tax is now a dilemma for Democrats. And I am one. We are the governing party both nationally and in Oregon. No energy policy will be transformative without a gas tax. It is the best, and perhaps only, way to move the US rapidly off of over-dependence on oil for transportation. But, even its revenue neutral forms (taxes collected given back in the form of reduced payroll or income taxes), it will be unpopular. Can the governing Democrats do what needs to be done?

 

Both our state and national government seem to be proposing moving in the other direction. By proposing to pay for road and bridge construction project with the stimulus funds, the Democrats are proposing to subsidize gasoline dependent travel. The existing gas taxes have not been enough to pay for these projects.

 

Governor Kulongoski has proposed a two-cents per gallon gas tax to help pay for road and bridge construction. For a car driving 15,000 miles per year at 30 miles to the gallon, that would be 500 gallons costing $10.00 more. Seems like small change, indeed.

 

Two national columnists commented on the gas tax this weekend. Neal R. Pierce writing on the stimulus-infrastructure proposals, wrote (it appeared in the 12/7 Oregonian with no link):

The bill could even pick up on proposals to speed our freedom from foreign oil and stimulate new made-in USA technologies by increasing the federal gasoline tax from its ridiculously low 18.4 cents a gallon to $1 or even $2 a gallon. The fiscal hit could be rebated to consumers in reduced income tax or earned income tax credit allocations.

NY Times columnist Tom Friedman wrote (here):

The same applies to Barack Obama’s plans for a green stimulus in energy efficiency and infrastructure. It makes no sense to spend money on green infrastructure — or a bailout of Detroit aimed at stimulating production of more fuel-efficient cars — if it is not combined with a tax on carbon that would actually change consumer buying behavior.

Many people will tell Mr. Obama that taxing carbon or gasoline now is a “nonstarter.” Wrong. It is the only starter. It is the game-changer. If you want to know where postponing it has gotten us, visit Detroit. No carbon tax or increased gasoline tax meant that every time the price of gasoline went down to $1 or $2 a gallon, consumers went back to buying gas guzzlers. And Detroit just fed their addictions — so it never committed to a real energy-efficiency retooling of its fleet. R.I.P.

If Mr. Obama is going to oversee a successful infrastructure stimulus, then it has to include not only a tax on carbon — make it revenue-neutral and rebate it all by reducing payroll taxes — but also new standards that gradually require utilities and home builders in states that receive money to build dramatically more energy-efficient power plants, commercial buildings and homes. This, too, would create whole new industries.

Let us not mince words: The Obama presidency will be shaped in many ways by how it spends this stimulus. I am sure he will articulate the right goals. But if the means — the price signals, conditions and standards — that he imposes on his stimulus are not as creative, bold and tough as his goals, it will all be for naught.

Friedman and Neal have the importance of the issue right. We will see what Obama proposes. But while we wait, let’s urge Oregon’s legislative Democrats in the 2009 session to refer a substantial, revenue-neutral gas tax proposal to the people of Oregon. Then we can have a focused statewide discussion (I know, I know, I can see the oil company sponsored TV ads now) on the merits of reducing the amounts we pay to our adversaries in petro-states around the glove.

 

 

Comments

[Tory Burch Shoes]

Friedman and Neal have the importance of the issue right. We will see what Obama proposes. But while we wait, let’s urge Oregon’s legislative Democrats in the 2009 session to refer a substantial, revenue-neutral gas tax proposal to the people of Oregon. Then we can have a focused statewide discussion (I know, I know, I can see the oil company sponsored TV ads now) on the merits of reducing the amounts we pay to our adversaries in petro-states around the glove.

[Pandora Charms]

We will see what Obama proposes. But while we wait, let’s urge Oregon’s legislative Democrats in the 2009 session to refer a substantial, revenue-neutral gas tax proposal to the people of Oregon. Then we can have a focused statewide discussion (I know, I know, I can see the oil company sponsored TV ads now) on the merits of reducing the amounts we pay to our adversaries in petro-states around the glove.

[pandora]

Governor Kulongoski has proposed a two-cents per gallon gas tax to help pay for road and bridge construction. For a car driving 15,000 miles per year at 30 miles to the gallon, that would be 500 gallons costing $10.00 more. Seems like small change, indeed.

[christian louboutin sale]

Many people will tell Mr. Obama that taxing carbon or gasoline now is a “nonstarter.” Wrong. It is the only starter. It is the game-changer. If you want to know where postponing it has gotten us, visit Detroit. No carbon tax or increased gasoline tax meant that every time the price of gasoline went down to $1 or $2 a gallon, consumers went back to buying gas guzzlers. And Detroit just fed their addictions — so it never committed to a real energy-efficiency retooling of its fleet. R.I.P.

[christian louboutin]

Let us not mince words: The Obama presidency will be shaped in many ways by how it spends this stimulus. I am sure he will articulate the right goals. But if the means — the price signals, conditions and standards — that he imposes on his stimulus are not as creative, bold and tough as his goals, it will all be for naught.