Third Party & Independents: Archives

David,
Your logic is usually impeccable so this piece is a bit baffling. Aren’t you the deficit hawk? How do you propose highway work to be funded? Do you think people want to drive on potholes? Aren’t higher energy prices the only way alternative energy will have a chance to compete? We freely pay higher gas prices when it’s the OPEC members getting the dough - and you want to go after the highway tax.

Did you really write this or are you a victim of identity theft?

Schwamp, much of those taxes haven’t been going to roads anyway. The largest gas tax by far is State and local taxes, and states and localities are not running deficits.

Finally, we need to reduce spending and increase taxes, but, lets reduce spending on wasted tax dollars, and increase taxes on those who can best afford to pay them without losing quality of life.

The economy is slowing to 2.5 to 2.75% GDP growth this year. Taxing small businesses at the pump is only exacerbating the economic slowdown.

Deficit hawk? You bet. But, like anything, there are but a few ways to do a thing right, and a million ways to do it badly. Let’s insist our politicians do this right, for a change.

And Schwamp, there is another whole issue here. The federal gas tax, started in 1934 was supposed to be temporary. Then came WWII and the Korean War, and the people supported the war effort by continuing the tax. But, the justification for this tax ended in the 1950’s.

The reason we have such incredible fiscal irresponsibility in government today is because the voters don’t hold government to account for its word. Prior to Reagan, the federal tax was 4 cents per gallon. Just since Reagan’s administration the federal gas tax has risen more than 14 cents. That’s a 350% increase in just a couple decades.

Also, I am not opposed to allowing the natural supply and demand dictate the price of gasoline. But, when oil companies top all time historical records for profits and pay execs an annual salary a quarter million times what a part time worker makes and maintain prices when people are hurting, and when government could care less about the tax effect on the people as is obviously the case here, then it is time for the people to give up something else they want or need to pay for the rapacious gasoline prices or, get rid of the politicians who allow this to occur.

Complaining to the wife or hubbie and playing “ain’t it awful” to your store clerk won’t solve the problem.

Doesn’t matter how it started. People are used to it and it’s politically impossible to implement any new taxes. If anything it encourages conservation which keeps oil company profits DOWN. Yes, it affects the lower class more but as our red column friend Jack often correctly points out - the poor pay effectively no income tax.

Taking the longer term view. We will all benefit if the tax is raised. Lowering it would be a disaster.

david

part of the problem is also lack of competition in the market. remember the mom and pop, and independent suppliers, they’re all gone. we also need to develope our own supplies here, to reduce our reliance on foreign oil, as well as alternative energy sources.

in calif. we pay i believe 18 cents in state exise tax, and 24 cents in fed. exise tax, at least on diesel, which for me is a big expense. your right about the it not being used for roads, and trans. we’ve been running a defecit here for quite some time, so it’s used in the general fund. funny how you and i have to live within our means, but the gov’t just raises taxes so it can continue to increase spending every year.

dbs, you pay 60 cents in state tax in California according to the link in the article. Then add the federal 18 cents, and local tax. Californians are paying more than 75 cents for each gallon. 16 gallon tank, means $12 per fillup just in tax. Times 4 fillups per month, it comes to near $600 per year.

That takes a huge bite out of poor folks pockets. Double that, at least, for small businesses who rely on delivery vehicles as part of their business.

And Schwamp’s comment about the poor not paying income tax is just plain dumb. If the poor work, they pay income tax. It’s the law and the employer takes it out.

You’re absolutely right dbs, we the people need to put a stop to government’s waste and misappropriation of our hard earned dollars.

Email your Congresspersons. It does not one iota of good to complain on WatchBlog if you don’t contact your representatives and put them on notice that this is a vote deciding issue in 2008.

Cheaper gas makes it tougher to get off gas. Whenever gas prices hit a peak, alternative fuels and energy efficiency measures look more attractive, but then gas prices drop, and so does incentive to get off gas.

It makes no sense to make gas cheaper. Now, if you want to argue that gas taxes aren’t being spent wisely, that’s another matter.

Gerrold,

Cheaper gas makes it tougher to get off gas. Whenever gas prices hit a peak, alternative fuels and energy efficiency measures look more attractive, but then gas prices drop, and so does incentive to get off gas. It makes no sense to make gas cheaper.

It makes sense if you care more about political popularity than, say, reducing oil consumption and pollution, or reducing the deficit. Even though reducing pollution and the deficit is what you supposedly stand for. (cough)Democrats(cough, cough)

David,

The largest gas tax by far is State and local taxes, and states and localities are not running deficits.

Then you should be asking the states to lower taxes, not the federal government. You are going after the wrong taxes.

I agree that high gas prices hurt the poor, but I also agree with the environmental argument, so I’m not 100% sure where I stand on this. What I do know is that if you want gas taxes lowered, it really should be the state taxes.

All gas taxes are too high. The problem was is with putting all the gas tases into the general fund. I’m sure the states and locals do the same. State gas taxes are up to 4 times what fed taxes are, but their transportation costs can’t be 4 times what the feds spend. Gas taxes should be earmarked for transportation purposes only. Maybe we could even get rid of tolls. (Another unconstitutional tax I think)
If we make it transparent, it’s easier to see where the money is wasted.

High gas prices are what will eventially get us off of oil, but artificial increases due to taxes aren’t a good idea.

“Californians are paying more than 75 cents for each gallon. 16 gallon tank, means $12 per fillup just in tax. Times 4 fillups per month, it comes to near $600 per year.

That takes a huge bite out of poor folks pockets. Double that, at least, for small businesses who rely on delivery vehicles as part of their business.”

Not argueing with you, but your numbers are conservative. I’m in a small service company with a big footprint. I have to drive a full size van and sometimes travel cross country.
35 gal tank times 6 times per week sometimes. You do the math. Multiply this times 7 company vans and that’s a HELL of a lot of tax.

“35 gal tank times 6 times per week sometimes.”

Should be 6 times per month sometimes.

tomd

i own a truck and pup, i haul rock, sand, dirt, etc. i spent @ $800 on diesel last week. i definitely feel your pain !

State gas taxes are up to 4 times what fed taxes are, but their transportation costs can’t be 4 times what the feds spend.

Why not? Generally, in my experience, there are a lot more state and locally controlled/maintained roads than federally controlled/maintained.

And California and New York have the highest gas prices due to state taxes

Yet, when gas prices go up 10% everywhere else, they go up 20% in California. It has nothing to do with the taxes.

I want to know why oil companies are abandoning refineries while saying prices are rising because there aren’t enough refineries,

The U.S. Federal Trade Commission is investigating possible antitrust violations related to the planned closure of a Royal Dutch/Shell Group refinery in California, which has the highest gasoline prices in the continental U.S.

I also want to know why oil companies — making record profits — aren’t maintaining their refineries,

Refineries in California and across the country are breaking down with unusual frequency this year, boosting prices at the pump and endangering workers and communities.

The rash of oil plant problems may not be a coincidence. The breakdowns stem from the hard use of aging equipment, a shortage of trained workers, corporate cost cutting and ownership changes, refinery experts say.

“State gas taxes are up to 4 times what fed taxes are, but their transportation costs can’t be 4 times what the feds spend.
Why not? Generally, in my experience, there are a lot more state and locally controlled/maintained roads than federally controlled/maintained.”

If you check, you will see that most state hiway projects use matching funds from the feds.

AP, you are mixing apples and oranges. NY and Ca. have the highest of all states, gas taxes, making their price per gal. also the highest. That is the apples. The oranges are when everyone’s gas prices go up, NY and Ca. retain the highest gas price notariety because they had the highest price BEFORE oil companies increase. Taxes have everything to do with why they have the highest price per gal.

Taxes have nothing to do with oil companies creating short supply to increase profitability. This is the flip side of economies of scale. When you are in a competitive environment you can cut prices, increase market share, and become more profitable. But, in a oligopoly, (a monopoly created by a group moving in lockstep), the shortest path to higher profits is to reduce supply if you can’t increase demand. This oligopoly is precisely what is happening and its no big surprise.

This oligopoly was predicted at the outset of the creation of OPEC, which is itself an oligopoly, using the control of supply as a profit and pricing manipulation tool.

Traveller said: “Then you should be asking the states to lower taxes, not the federal government. You are going after the wrong taxes.”

I did! Did you miss it? The call was for all governments to reduce or eliminate the gas taxes if they are to represent the interests of the people. What citizens of this country do you know who would say “No, I don’t want my gas prices to go down”! Damned few.

Why do you think I went to such lengths to highlight the largest taxes on gasoline are state and local?

Gerrold said: “It makes no sense to make gas cheaper. “

Makes sense to the middle class, smaller business owners, and the working poor. Makes a lot of sense. Besides, in case you hadn’t noticed, your theories of market forces are broken. Gas consumption has not dropped as a result of prices hitting $3 per gal., it has increased. There are other factors at play, many other factors, and price/consumption theoretical purists are confounded with each prediction that the rising price will reduce demand, because reality demonstrates that is not happening.

Conversely then, reducing the taxes on gasoline is not necessarily going to increase consumption. There is of course a breaking point somewhere in the future and price of gasoline that will cause consumption to drop. But, that will also mean unemployment, bankruptcies, and popular political revolt. It’s not where we should go.

Yes, we need to eliminate our dependence on fossil fuels, and lowering or eliminating gas taxes won’t interfere with either that paltry effort or necessity.

That’s the problem with purist economic theory, it creates theoretical cause and effect relationships which often do not hold up in the real world because the theories fail to calculate the plethora of real world variables which impact the relationship.

The fact is, consumption won’t drop regardless of how high gas prices go UNTIL folks are driven into quality of life threatening substitutions by the price, and then of course, having raised the price that high creates as many social problems as it tried to solve, if not more. There is a reason economics is a social science and not a hard science. And I just explained why that is.

Weary Willie-
The Mars Probe knew it was going to land seconds before it had to deploy its countermeasures. Cars in an accident have no such warning.

The danger you get into with such countermeasures is that when the response needs to be fast, the speed of the countermeasure becomes an issue. For example, airbags can kill and injure children, toddlers and babies in the front seat because they’re in the wrong position, and get caught by the airbag as it’s expanding. It’s literally explosive in its speed- a charge in the system is what inflates the bag.

Designs of this type must balance different factors to work.

Weary Willie, the technology of smart cars has advanced to the point, that cars can overrule the driver in calculating safe distance at current speed from car ahead, and can automate braking if an inattentive driver is about to plow into a slowing or stopped car ahead.

These technologies negate the need for much of the impact safety needs built into heavier vehicles. The problem is one of driver’s psychology. So, far, research shows they don’t want to relinquish control to their vehicle. That psychology could easily be changed, by a government sponsored education of the benefits and incentives, despite vested interests counter campaigns. But, we don’t have government leaders interested in pushing the issue.

Hell, we still don’t have enough politicians to make any real concerted effort to reduce fossil fuel dependency in general. That’s why a whole lot more incumbents have to go, before their replacements take the lesson of their predecessor’s failed reelection to heart.

Weary Willie, sure it is. Just because your car won’t replace your wife, doesn’t mean what it can and does do, is without merit, cost savings, and material to reducing gas consumption. The technology would reduce accidents by more 60% by some estimates. But, even if it reduced accidents by 40% it would change the way cars are built, and driver attitudes toward more fuel efficient vehicles.

Afterall, not even an armored Humvee in Iraq is 100% safe on the road. Be realistic for pete’s sake. Inability to achieve perfection should never be allowed to limit progress. Your logic indicates it should.

David,

One word explains it all: MANIPULATION!

shortage = price increase

“glut” = price increase

It really doesn’t effect me directly anymore because I can’t drive, but it sure effects me indirectly.

Rudy had the ball’s to say we need to end our dependence on foreign oil because of Chavez! Well, duh! Who’d ever have thunk we should do such a thing?

Certainly no one that’s held hands with a sheik.

David et al

When the price of energy rises, we use it more efficiently. That has been the record since the 1970s. I attended a forestry meeting where they talked re energy. It was interesting and sad. Many of the speakers talked about their energy production. They said they had been producing wood chips, ethanol, etc back in the 1980s UNTIL the price of energy dropped and pushed most of them out of business. Now they are back in business, but scared that that the prices will drop again.

High gas prices are good. I do not care why they are high, although I would prefer that we are driving the price up with taxes than giving the cash to oil producing despots. But no matter the reason. High prices are desirable.

Jack said: “When the price of energy rises, we use it more efficiently. That has been the record since the 1970s.”

But that is not what is happening now. The rising prices have been accompanied by higher consumption since 2002, Jack. You can’t ignore the real world just to preserve your economic theories. That simple cause and effect relationship you espouse is not representing what is now happening.

Jack, the oligopolies and supply disruptions are going to insure ever higher prices. It is time for the government to show some compassion toward its citizens as we enter this painful inflation of energy costs by cutting the taxation.

Well said, Kansas Dem. That is the predictable consequence of oligopolies.

We are a one income family and as much as it hurts I am almost looking forward to $4 a gallon. We then need to set a tax floor where gas will never drop below this dollar figure.
I have to agree with Jack on this one (as much as that pains me). He has his facts straight on this one. The lumber mill in the town I grew up in had a co-generation plant (produced its own energy with its waste). That plant was removed due to it was looging money (cost more to run it then buy the electricity). This was back in the early/mid eighties when oil and natural gas prices droped.
If was a person looking to build an ethanol refinery I would look at a price floor for gasoline as a favorable situation to get my buisness up and running. Sometimes government has to minuiplate the market to allow alternative energy sources to get started earlier then they would have without the interfearence.
Sorry david something some pain now is much beter then lots of pain later. I think this is a bit of an innoculation to what is about to come, if anything local taxes on gas need to go up. Here in Oregon we collect $.92 for every $1 we spend on road construction/maintenance. This also at a time when we are letting roads get worse due to lack of funds to keep them up. Worse road conditions lead to less fuel efficency. Sorry I don’t buy your arguement but its better in the long run to push up gas prices make living closer to work more atractive.

timesend, I think if you research it, you will find that the gas taxes are being diverted from road maintenance to other priorities. That my friend, is a deception and fleecing of the public, who believes the taxes are necessary for road and bridge maintenance. Our bridges and roads have been steadily falling into disrepair ever since Republicans took over Congress, not that the Republican controlled Congress decides for states where to put their local gas taxes.

But, the states were very hard pressed under Republicans and Clinton to balance their budgets in the 1990’s as budgets for matching funds for road maintenance by the federal gov’t. waned. The state’s politicians were suddenly free to spend gas revenues on other projects than roads, because federal matching funds were no longer at stake for a lot of those gas revenues.

What you and Jack fail to recognize, is that we are entering a period of escalating energy inflation that is going to harm millions of American families, regardless of what is done with gasoline taxation. That means the government can cut those taxes and not lose a an ounce of incentive to become energy independent.

Failure to cut those taxes is going to have the public faulting their government for the gas taxes. The only reason politicians would allow that to occur is pure STUPIDITY and INCOMPETENCE and UNCARING what the hell the public thinks. I should think we have had quite enough of that over this last decade, don’t you?

David

The economy has been growing so fast that consumption has been rising. You have to look at consumption versus GDP. Otherwise the sure way to save energy is to shut down everything

I believe in a carbon tax. I would divert that revenue to various things, not just roads. If we want to address global warming & oil adictions, we have to suffer some pain. Taxes on fossil fuels should be higher to discourage consumption and allow alternatives to develop.

Timesend

Yes. They talked re that problem. We could generate a fair amt of electricity from wood fuel, but why would anybody do that when electricity from coal or gas is so cheap.

Jack, the pain is here, with or without government taxes on gasoline. You keep missing that point.

Jack, that consumption has been parallel with a negative savings rate. That means that consumption has short life span. It cannot be counted upon to save anykind of future economic need if the negative savings rate continues to parallel. People can go into debt only so far spending their way to happiness before they get cut off, and payback is a bitch! Literally!

David R.,

Gas consumption continues to increase because of demand pressures. The Energy Information Administration projects increased consumption for the next 25 years. Much of this is driven by population growth. EIA’s calculations factor in gains in energy efficiency and gains in alternative fuel use. One of the factors that lowers the rate of the increase in gasoline (and petroleum production, in general) is increased price. So you are correct in saying that $3 a gallon gas has not led to a decrease in consumption; however, that’s one of those facts that is misleading out of context. Increased price for gasoline does increase incentive to find alternatives; read the various EIA reports yourself.

Cutting the price of gasoline will decrease those incentives. That’s just intuitive and the opinion of everyone I’ve read on the topic.

I’ve given you my source, David, in response to your snide comment about my understanding of market sources. Give me some sources that claim gasoline price has no effect on adoption of energy efficient and alternative fuel technologies.

David, if as you say gasoline prices are going to skyrocket, then at some point to reduce pain it may be advisable to cut taxes. However, while we will continue no doubt to have spikes in gasoline prices, it is not clear that prices will remain high for the foreseeable future. Here is a link to the EIA’s Annual Report 2007. On page 4 of the summary you can see that petroleum prices are projected to remain virtually the same as now through 2030.

The reasons to get off petroleum insofar as possible are environmental and geopolitical. Supply should be no problem for decades. The reasons to forget about ANWR drilling is that full exploitation of those fields would reduce only very slightly the need for foreign oil imports.

Look, if you want to find some way of diminishing the impact of gasoline prices on lower income folks, that might persuade my liberal mind. Give them a tax credit or something similar if you like. But cutting prices is not good for the world.

AP, you are mixing apples and oranges.

Sure, but my point is, with gas prices topping $4 this summer, $5 next summer, $6 the next and up, up, up, a 32 cent tax isn’t the problem.

The real question is, with plenty of oil flowing and oil prices dropping, why are gasoline prices increasing exponentially? The answer is, of course, your “oligopoly” illegally manipulating the market.

End the Enron-type manipulations, and the price of gas drops far more than a few pennies of tax rollbacks.

Sorry Gerrold, your spin doesn’t accurately reflect facts. Americans had higher gas prices last summer, but, it didn’t reduce American’s travel or vacation plans one iota, in fact travel and vacations increased.

Again, it is a mistake to superimpose theory on reality whose facts contradict the theory. There are other variables at play here.

Let me give you an example. Americans are spending more than they are earning. Especially over the last 9 months (negative savings rate). Guess what consumer confidence has done over the last 9 months? Gone up!

You see, your theory is based on rational, conscious, and informed behavior. But, at this point in time, (as in the late 1920’s) people are not acting rationally, nor are their spending decisions being entirely controlled by conscious determination.

Many are responding to a subconscious doomsday scenario, that dictates ‘enjoy the moment regardless of the cost, for tomorrow may not arrive’. Your economic theory fails to account for such social phenomena.

Many others are in denial as to the economic effects of entitlement spending and the growth of the national debt.

Far more are just plain ignorant of any of this and acting out of financial ignorance as documented by a number of research projects conducted over the last several years. Your theory of increased pricing curtailing consumption is based on informed rational people acting rationally.

That’s where your theory is breaking down in real time to explain what is actually going on in the real world. And the real world facts and statistics refute your theoretical predictions. That is why intelligent informed folks about economics from Bernanke to the high school economics instructors are calling for a dramatic investment in financial education in America.

Failure to make that investment is going to mean an unpredictable future, precisely because the models are based on informed self interested behavior, which is less and less evident in our culture regarding personal financial behavior.

Adam Smith still looms large as the dominant wise man of economics. His Theory of Moral Sentiments, the precursor to his Wealth of Nations, delineates informed self-interest as the cornerstone of stability in an economic system. When self-interest is not informed, unpredictable results will occur, as we are witnessing.

AP said: “Sure, but my point is, with gas prices topping $4 this summer, $5 next summer, $6 the next and up, up, up, a 32 cent tax isn’t the problem.”

Quite right, AP. But, that in no way negates the coming resentment by the public toward political leader’s refusal to lessen their burden to the extent they can. People can’t hold OPEC responsible at the polls, but they can hold their representatives accountable for their gasoline taxation.

Perceptual Reality can be a real pain!

Gerrold, 9/11 was another irrational example according to economic theory. Our country was attacked, and there was no assurance at all other attacks were not forthcoming and times could get very bad. What did consumers do? They went shopping just like Bush asked them to do, instead of saving and stockpiling against the possible future of fighting terrorism in American streets.

Hardly rational. Definitely not informed, by definition. There was no way anyone in the year following 9/11 could predict that 9/11 was going to be the last attack for many years to come.

And now America has a negative savings rate, people are spending more than they are earning. Economic theory could not predict such irrational behavior. The positive outcome was that all that exuberant spending was fun, and hastened our nation’s pulling itself out of recession. The negative consequence is that there are no brakes on all this exuberant spending which we now enjoy as a patriotic duty, and Americans are getting way, way over extended. Can you say, sub-prime lending meltdown?

David

Perhaps we are talking past each other. Maybe people are going into debt to buy gas. They will not be able to do this forever and will have to cut back on gas. This is what we want.

Because I am interested in addressing the global warming problem and the oil addiction dilemma, I draw that logical conclusion that using less oil is a necessary step in that direction.

If people are spending more than they can afford in order to continue to consume more oil than they should, they should just say no and make the needful lifestyle changes.

Gerrold

You make a good point. I have been arguing this over and over. We can provide the less fortunate with a greater earned income credit, but the whole idea is to reduce everybody’s use of fossil fuels. We should not make it our policy to protect anybody’s ability to consume fossil fuels. Behaviors have to change.

David & Gerrold

Gerrold gave the link. I have linked to similar studies many times when I have advocated higher gas prices. The relationship is very strong between prices and demand. It has a short lag time. Increasing consumption is tied to growing population and GDP. We probably do not want to dampen economic growth and we cannot slow population growth in the short term. The variable we can affect is energy per unit of GDP. That declines when energy gets more expensive.

Anyway, what you are talking about is where the tax falls. David, you are not advocating a general tax cut, right? You want to reduce the tax on gas and presumably raise it somewhere else. This is exactly the opposite of good policy if you are interested in reducing CO2 or oil dependency.

You do not need to understand much about economic theory to know that you buy less of something if it costs more. Maybe some people will be stupid and spend themselves into deep debt so they can fuel the SUV; most will not.

We can provide the less fortunate with a greater earned income credit,

People (eg David) just don’t realize it but because of the EIC, the working poor often get a refund larger than their total withholding. I’m not complaining about it but that’s the way it is.

The gas tax can be avoided if you can’t stand it. Don’t drive.

Schwamp said: “The gas tax can be avoided if you can’t stand it. Don’t drive.”

What an ignorant statement that was. How do you propose the working poor get to work, or job interviews? Or are you proposing we go back to welfare without work?

It’s not like this nation has made much of an investment in public transportation. Let them eat cake, eh? Very telling.

Jack said: “The variable we can affect is energy per unit of GDP. That declines when energy gets more expensive.”

Again, Jack, you are ignoring reality. Travel and vacations did not retrench last summer despite higher travel costs. Reality trumps theory every time, unless one engages in denial, which is what your comment appears to be engaging in. Explain last summer in terms of your theory?

Jack said: “You want to reduce the tax on gas and presumably raise it somewhere else. This is exactly the opposite of good policy if you are interested in reducing CO2 or oil dependency.”

To maintain the gasoline taxes as oil and refinery costs are going up, is putting an inordinate burden on those living on the margin, which includes a substantial number in the middle class - (see sub-prime loan spillover). If what you say is true, the price of oil and refining will curtail consumption even if some of the taxes are withdrawn. The price is still going up, regardless. Where’s the compassion in your conservativism? Must be in the same closet with Bush’s.

“You do not need to understand much about economic theory to know that you buy less of something if it costs more.”

Your right Jack, only someone who DOES NOT understand much about economic theory would regard it as law and an infallible predictor. Quite Right, Jack.

The real world is far more complex than your simple price/consumption theory. Like all theories, it is helpful in predicting general trends, but fails when trying to predict specific event occurrences. That is why it is a theory and not a law, which provides predictability with each and every event. Like why folks traveled and vacated last year in record numbers despite rising fuel costs.

i own a truck and pup, i haul rock, sand, dirt, etc. i spent @ $800 on diesel last week. i definitely feel your pain !

Posted by: dbs at May 2, 2007 05:58 PM

I’ll be very happy to pay your fuel bill if you’ll pay mine.
I spent $2,253.42 on diesel last week at the feed store alone. This is for 4 trucks with 65 gallon tanks filling up 3 times each @ $2.909/gal. And then there’s the equipment that uses the dyed diesel.
At the factory we got by a little cheaper. We only spent $202 on diesel for the F350.
This is included in the deal and can’t be negotiated separate. :)

Lets take the $100,000,000,000 Bush needs for Iraq and squander the whole damn thing on alternative energy research. It seems to me that maybe it is time to seriously pursue this matter. Screw waiting for the so called free market to handle the matter. We will all go broke waiting for those greedy bastards to decide what is the best way to pad their pockets at our expense. Instead of investing that money in security for the people who are screwing us at the pumps lets give some serious money to those who are willing to give us an alternative.

David R.,

Why the condescending lecture on reality? I understand the rhetorical move — that is, if someone disagrees with you then they are objectively wrong. Would the world were that simple.

You seem to be hanging everything on the behavior of travelers last summer. If they traveled a lot despite “high” gas prices, then there is no correlation between price and consumption. By the same reasoning, one could say that CO2 doesn’t affect global warming because you can find some individual data points to support your case. It’s long term trends that matter, and long term, we’re really talking about trying to cut the rate of the increase in consumption. The truth is, I don’t see much hope for consumption actually being reduced much unless prices achieve and mantain drastically high levels. It’s hard to imagine our country dramatically cutting foreign oil imports within the next few decades.

I have the impression you don’t really read what I wrote in my previous posts. First, I said that consumption is projected to increase for the foreseeable future. Second, I said that higher gas prices make energy efficient and alternative energy technologies more attractive. Third, I said that the EIA projects gas prices to remain roughly the same through 2030. Because of these projections from the EIA, I think cutting gas prices is counterproductive to our environmental and geopolitical interests. Please, I’d much rather read specifics about what I actually wrote than than to endure a self-indulgent lecture on reality.

You begin this thread saying that gas prices were painfully high and should be reduced. Then you note that traveling increased last summer. Your explanation is that prices have no relation to consumption. I suggest, respectfully, that price wasn’t as huge a factor as it could have been because $3 a gallon gas is cheap. Of course, there are other factors. At any rate, you move from the data to the conclusion that cutting gas prices wouldn’t significantly increase consumption, short term. Guess what? I agree! When the choice is between cheap and cheaper, price is not the dominant factor. But cheaper gas makes adoption and development of alternative fuels a much slower process.

Please, David, take a step back. I like debate, but thinly veiled insults tossed at those who disagree — bleh. Go argue with the EIA.

If you live in a city, like DC, with a great mass transit system than you don’t have to pay at the pump.

Ron Brown

“I’ll be very happy to pay your fuel bill if you’ll pay mine.”

appreciate the offer, but i think i’ll pass. now if you could figure out a way to nuetralize the red dye in off road fuel, i think you’de have something, at least until the IRS caught up with you. i figure i go through about 55 to 60 gallons a day, and right now i’m paying $3.05, what a rip off ! BTW, be careful where you use that red fuel, every so often the IRS shows up on jobs with out warning, and starts dipping tanks. the guys that get caught the most seem to be the ones with auxillary fuel tanks on thier pickups for servicing small stuff, backhoes and such. you think they’de be smarter than that. i think the initial fine is like $1500.

David - sure, the Feds and the States make money on gas. Quite a lot. But the top 5 US oil companies’ combined profits last year were well over $100 billion. I’ve got to tell you, I’d rather pay taxes to the govt than to rich investors, even if the govt is going to waste half of it. See, you rightly mention that gas is essentially a regressive tax - but you neglect to mention that the poor are essentially taxed twice - once by the govt, and then once by the corporations who give their money back to the rich.

As a moderate conservative I would like to make a few points.

1. I don’t fully buy into the “global warming things”. I believe there has been global warming, and I even believe part of the issue is human activity. What I don’t believe is that we can make 100 year predictions. I would really enjoy looking at what our best citizens predicted about our world of 2007 in the year 1907. They had no concept of what was in store.

2. I believe the root cause of the war in Iraq is oil. I believe if there were no oil in the middle east, it would take very few troops. (Just enough ships to keep the shipping lanes open.

3. We need to protect our environment because we should want to leave our world a better place for our children.

For this and other reasons I believe we should have a gradually increasing tax on gasoline that would gradually shift our economy away from automobiles. It wouldn’t bother me if the feds raised taxes $.20 a gallon per year for years to come.

I also believe this can be done in a way that does not hurt the poor. I am not interested in raising more revenue over all, just transfering taxation from income taxes to gasoline. Tax credits can help the poor. Money raised through increased taxation on gasoline can be given back in the form of tax credits.

Over the long haul such a policy should gradually reduce gasoline usage and encourage alternatives. If done in a consistant way, industry could adapt and create alternatives.

It would be my hope that over the years the need for our best and brightest to fight wars in the middle east would deminish, and the we would be able to pass on to the next generation a cleaner environment.

Craig

Gerrold said: “You seem to be hanging everything on the behavior of travelers last summer. If they traveled a lot despite “high” gas prices, then there is no correlation between price and consumption.”

Is there a thinking or reading deficit in this comment above? Did you not read where I reiterated that there are OTHER variables involved that can invalidate the predictability of such theories, as inverse relationship between price and consumption? And if OTHER variables are in play, solutions based on such theories that fail to account for the other variables will be wasted effort, tax dollars, and opportunity costs to effectively address the problem and can even compound the problem.

Driving consumers into bankruptcy simply trades one problem for many anothers, which is what a failure to repeal the gasoline taxes will accomplish. Gasoline is indispensable for millions of Americans at nearly any price they can afford to pay. Hence, raising the price will not curtail their consumption.

What part of the following argument do you NOT get?: ‘People will pay any price regardless of how high and reject lowering consumption for food, especially when it is scarce. In fact, they will horde it’.

Nuff said. My point and argument are valid, solid and correct, as evidenced by the obviousness of the question above, and your absolutist position which fails to note the exceptions and reality is flawed. Your comments fail to acknowledge the inherent exceptions to the theory.

It is a common error amongst conservatives and liberals alike who subscribe to general principles of Adam Smith without noting the exceptions and conditions which Smith outlined ever so clearly in both his monumental writing works, one of which 99.9% have never read and the other of which likely 95% have never read. Idealogues are cliff note subscribers, and that makes their positions very dangerous for public policy.

Ignorance is no proof one’s opinion is correct!

Weary Willie, do you have a reading deficit? I proposed cutting the taxes on gasoline making your gasoline more affordable. That makes me a rich person uncaring of your concerns? WOW!

I must have a reading deficit too, because the rest of your comment appears incoherent and the link goes nowhere that makes any sense.

Craig, I found your comments eminently sensible and level headed. My only counter-point would be where you say: “For this and other reasons I believe we should have a gradually increasing tax on gasoline that would gradually shift our economy away from automobiles.”

Your comment doesn’t appear to factor in the fact that prices are going inexorably upward without tax policy on gasoline in play at all. Hence, it most probable that cutting taxes will not alter the course of rising fossil fuel prices.

But cutting taxes on gasoline as prices rise can give the financially marginal workers and small business owners some additional time to adapt and adjust to the rising costs of transportations, rather than pricing them out of a job or their business at a more rapid rate.

David, people don’t have to visit grandma in the summer. They do it because they want to, and because they are willing to pay the price. If the price were drastically higher, some would choose to use the telephone. BUT, listen David, I KNOW consumption is increasing, as I’m saying for the third time now. There IS an inherent demand that in the short-term price can’t affect. People HAVE to get to work no matter WHAT the price of gas is. Industry consumption of petroleum in general doesn’t correlate strongly with price, at least not for the last few years. Nothing I’ve written denies that.

Once gain, you refuse to address my main point, that lowering gas prices creates a dis-incentive for energy efficiency and alternative fuel technologies.

But you know what, David, I’m over this. I love to discuss the issues, but I have no love for rude or shrill people.

dbs
All our drivers know that if they get caught putting red diesel in their truck that they’ll be on the outside looking in. And if they get caught by the DOT (GA or FED) or the IRS with it in their truck that the fine will be taken out of their last checks. Our drivers are assigned a truck. No one else fills them or drives them.
We use the red diesel only in equipment that gets towed to the fields we’re working in. The GA DOT has checked us once so far in the year we’ve been opened. Haven’t seen the IRS or anyone else. Yet.
I use red diesel in my farm tractor. I also have a diesel pickup and the other day I caught my 11 year old grandson putting the funny diesel in the pickup. Fortunately he only got a couple of gallons in it before I caught him. I don’t think he’ll be doing that again anytime real soon.
I don’t care who they are. I’m NOT paying any fines because the wrong fuel is in a truck.

Gerrold said: “BUT, listen David, I KNOW consumption is increasing, as I’m saying for the third time now. There IS an inherent demand that in the short-term price can’t affect. People HAVE to get to work no matter WHAT the price of gas is.”

I am pleased that we can agree on this. And it is for those people whose jobs and small businesses depend upon fuel consumption, that the recommendation was made to cut the taxes on fuel. As some in this thread have already indicated, a cut in the tax would give them some serious help in adjusting and adapting to rising fuel prices which are inevitable.

Political policy, especially economic policy, should be considerate of working folks wherever and whenever it can. This is one of those where’s and whens. When we find alternatives which cost competitive to fossil fuels to the extent that we can reinstate taxes on the new technologies or fuel itself while keeping the new alternatives cost competitive, then, an argument can be made to reinstate the taxes without the appearance of punishing the marginal workers and small businesses.

Thanks for that reply, David. Perhaps we were both getting a little heated.

Here are something specific that we disagree on. If I misstate your position, my apologies. You think that gas prices because of a shortage in supply are going to increase greatly. I think that eventually will happen, but not anytime soon. The EIA projects that gas prices in constant dollars won’t increase much through 2030. Its assumption is that OPEC and other oil suppliers have an interest in keeping prices relatively low so that gains in alternative fuel technologies are not realized particularly quickly. The EIA runs various projections, of course, based on different assumptions. If gas prices do increase more than its reference case, then it projects increased gains in efficiency and alternative fuels. I take seriously the climate change problems, and have for a long time. Also, our foreign policy has been driven greatly by our need for oil.

That’s why I favor not cutting gas taxes. I have a lot of sympathy for those getting squeezed by gas prices. I lean pretty far left on most issues. But I would rather see other ways to relieve pressure on the poor and the struggling middle class than to lower prices at the pump.

On some days I’m just bleak about this. Because of increased economic activity and population demands, consumption of pretroleum is projected to increase almost no matter what we do. Oh, industry has made impressive gains in efficiency, but that hasn’t cut consumption — that’s still going up. I can only hope there is a tipping point where suddenly we see a relatively rapid shift away from oil.

Gerrold, there are a couple of scenarios in which oil prices do continue to increase. I haven’t read your reference and don’t know what their assumptions were, but, this much is clearly possible.

1) The cost of accessing and retrieving oil deposits will increase. And, the more so if legislation dictates reduced dependence on Middle East oil for tar sands oil out of Canada for example.

2) As supplies dwindle, and even with the perception that they will one day distant dwindle, a psychology kicks in amongst cartels and oligopolies, to progressively milk ever higher profits from diminishing supplies. This includes not only drillers but refiners as well.

3) Competitive demand for consumption is inevitably going up with the growth of emerging industrial and technological nations overseas. OPEC may hit physical limits on how fast it can produce oil against a rising demand, which in turn would drive prices up.

4) With increased demand and distribution overseas, accidents, terrorist attacks on, and other supply interruptions will become can will likely become more frequent, making the price more volatile and the pushing the pricing trend upward as well.

Of course, it is possible none of these will occur. But, I am not so optimistic.

I am with you 100% if tax on fuel is harming those on the margin, there are indeed other ways we can ameliorate that circumstance for those folks. Income Tax credits for example, (or, preferably a flat tax through overhaul and reform) for those whose jobs or small businesses depend on fuel and who are put on the margin by fuel taxes.

David:

Your comment doesn’t appear to factor in the fact that prices are going inexorably upward without tax policy on gasoline in play at all. Hence, it most probable that cutting taxes will not alter the course of rising fossil fuel prices.

I believe that if left unchecked oil prices will rise and that as they do technology will provide relief through more miles per gallon. For instance during the previous era of high oil prices industry moved to fuel injection. In this era industry will probably move to hybred technology. In the end even if prices rise over time I believe the cost per mile will roughly move in line with CPI. In times like now when fuel costs are rising higher than CPI there will be innovation, which will usher in periods of slack time until fuel cost go higher. I believe without a change in tax policy this trend will continue until every last drop of oil is taken from the middle east.

It is also my belief that with consistent tax policy that over the long haul increases the cost of gasoline prices our economy can shift. Tax policy can be used to transform our economy away from the use of the gasoline powered automobile and toward alternatives. I am not for a tax increase on the whole, as I believe our government is currently raising plenty of money. Rather, I am for a shift in taxation.

My intent is not to punish the working poor. I would support in tax policy in the form of credits that would help the worker who much find some way to commute to work. Even so, if a person were to need to pay $5.00 a gallon, but was given an equivalet tax credit, I believe such a venture would induce thrift at the pump.

I also believe such a policy would need to be gradual and long term. A sudden shock would have too many unintended consequences. Over a ten to fifteen year period I think our economy could be transformed.

My hoped for result would be fewer servicemen and women dying in the middle east, and our leaving to our children a cleaner environment.

Craig

David:

Just to add in a non intellectual vain. I think both political parties are playing in the shallow end of the pool on Iraq. People who believe this is our last middle eastern war are smoking something. I don’t like doing business with those people. I think it’s time for a real policy that will make it so that middle eastern oil is no longer a vital interest of the united states.

“Those people” by the way has nothing to do with race religion etc etc. It has everything to do with unstable and unreliable governments that our sons and daughters need to go into harms way to protect.

I would predict that a real plan to disingage from middle eastern oil would do far more to create stable democracies that our current venture. Loosing customers is a great motivator to reform.

I just wish a political party had the spine to do such a thing.

Craig

Ron Brown

“I caught my 11 year old grandson putting the funny diesel in the pickup. Fortunately he only got a couple of gallons in it “

ron be real careful about that, from what i understand they have tests that can detect very small amounts of that dye in fuel. it takes only a splash in many gallons to detect it. also that dye stays in the fuel filter, and if the engine is set up to return excess fuel pressure back to the tank, it will be detectable for a long time.

Craig, thanks. I am in agreement generally with all your comments above.

Especially where you say: “I am not for a tax increase on the whole, as I believe our government is currently raising plenty of money. Rather, I am for a shift in taxation.”

Appeals to my old stumping about priorities in Congress and the White House, instead of acting as if they had an unlimited credit card issued by the tax payers.

You said: “I would predict that a real plan to disengage from middle eastern oil would do far more to create stable democracies that our current venture. Loosing customers is a great motivator to reform.”

This view I am not so sure of. As we wean off imported oil, the price drops, and emerging nations benefit and expand their consumption on that price drop, up to a point. There are nations who also see the writing on the wall, that though they could benefit from the price drop, may decide to sip instead of guzzle at the cheaper oil, continuing their long term plans for weaning themselves off oil as well. Hard to say how that would play out when looking at specific nations like China, Thailand, Viet Nam, and a host of others in Eastern Europe for example.

David:

Which ever of us is correct on loosing customers as a motivator to political reform, my vital concern is saving US lives. By dimishing the middle east as a vital US interest, I believe we can do so. When we place past present and future lives of US servicemen and women next to our price/gallon when I believe it is possible to eliminate the need for comparison through shewed planning, I’m all for it.

I know it needs to be long term, but I believe it is completely possible to eliminate the need for future wars in the middle east by gradually transfering taxation from income taxes to gasoline taxes.

Actually, I believe over time, that this would be economically neutral. If we dramatically shift, then alternative fuels will spike food costs which hurt the poor world wide. I’m for a steady conistent shift over a number of years to achieve this goal. This gives producers plenty of predictable time to calculate a return on investment etc.

Craig

Craig, I agree. Very sensible. Some sacrifices must be made, but, to the extent possible, they should be elected sacrifices as opposed to forced. Though forced may be necessary at times on specific short term impetus tactics to jump start movement in the right direction. Taxing or fining gratuitous oil consumption in the wake of new available alternatives I would not rule out. Change is stressful for many folks, and they sometimes need to be nudged before they travel a different path on their own steam.

David:

I agree with most of what you say on this thread. When national security is at stake I’m for more than a nudge. I have no problem with Congress imposing a gasoline tax of say 20 cents a year for a long time, with of course coresponding and equal tax relief in other areas.

Craig

David:

I know you and I go around and around debating on this issue. I want to state what I agree with you on.

I agree that entitlement growth must be dealt with and that run away deficits are destructive.
I think we also agree that spending cuts are desired over tax increases.

What I propose is a multiple track approach. I do not believe in silver bullets. For instance I think I disagree with you in immigration. I believe immigration of young skilled workers is one of many answers that should be looked at.

I also think the demographic thing is a bit over blown. (Well maybe I think we focus too exclusively on it). We are also in the middle of a revolution of living longer. We are struggling with what it means to have millions of healthy vibrant people in their 70’s and 80’s. Very long retirements. We are writing new rules of living.

Most of the people I work with for instance are planning on working until age 70. And they are affluent!! Their idea of life is to be in a second home (one owns four homes!!) (Not me I do ok, but not that ok!!) They work from each home and migrate around depending on family needs, and quality of life issues. Imagine, they are affluent and yet choose to work until 70 because they want to.

Life is changing,

Craig

David:

Ooops, wrong thread. The above was suppose to be in the right column. Sorry.

Craig

End the gas tax? Why, don’t you think we have enough on the national credit card yet? Do we really need to pass our love of cheap gas onto the next generation too?

“David - sure, the Feds and the States make money on gas. Quite a lot. But the top 5 US oil companies’ combined profits last year were well over $100 billion. I’ve got to tell you, I’d rather pay taxes to the govt than to rich investors,”

And what was the RETURN ON THEIR INVESTMENT?
I think you will find it lower than most industries.

Dr. Gnostic

“End the gas tax? Why, don’t you think we have enough on the national credit card yet? Do we really need to pass our love of cheap gas onto the next generation too? “

that’s not the point. the taxes are collected under the pretense of being used to maintain roads, and infrastructure, and then end up in the general fund where they’re spent on other things, that have nothing to do with the reason they were collected in the first place. either fix the damn roads with the money, or don’t collect it. high fuel prices affect everyone and everything you consume, which means those of lessor means are affected the most. here in calif. they’ve been stealing the fuel taxes for years. at one time we had the best roads in the country, now the roads are some of the worst in the country.

tomd, you’d be very wrong.