Raise the Gas Tax Now!!

TW: Tom Friedman advocates something that I strongly support, raising the federal gasoline tax. He does not define an amount but I would suggest at least $0.50 per gallon. Each $0.01 per gallon raise roughly $1.4 billion annually, so a $0.50 per gallon tax would raise about $70 billion.

The logic is simple. We continue to ride an energy rollercoaster whereby prices gyrate creating economic disruption (the three most severe recessions of recent times, '73, '81 and today, have followed oil price spikes), creating funding for some of our worst foes (e.g. Chavez, Putin, Iran etc.) and creating the need to deploy troops to secure those supplies.

A gas tax, preferabaly with some flex built in to reduce the tax if prices spike, would seek to smooth the ride. The tax would fund some of the various programs (e.g. wars in Iraq and Afghanistan) or shortfalls (e.g. medicare) we already possess. In addition, providing consumers with a strong signal that gasoline prices in the future will be higher would reduce the whipsaw in demand for SUVs and hybrids which lead to the dreaded bailouts.

Will this happen, of course not, it is highly logical but political suicide. The day I see a Republican of any stature propose the tax will be the day I believe it will happen.

From Friedman at NYT:
"...where gasoline prices go up, pressure rises for more fuel-efficient cars, then gasoline prices fall and the pressure for low-mileage vehicles vanishes, consumers stop buying those cars, the oil producers celebrate, we remain addicted to oil and prices gradually go up again, petro-dictators get rich, we lose. I’ve already seen this play three times in my life. Trust me: It always ends the same way — badly.

So I could only cringe when reading...on Dec. 22: “After nearly a year of flagging sales, low gas prices and fat incentives are reigniting America’s taste for big vehicles. Trucks and S.U.V.’s will outsell cars in December ... something that hasn’t happened since February. Meanwhile, the forecast finds that sales of hybrid vehicles are expected to be way down.” Have a nice day. It’s morning again — in Saudi Arabia...

A gas tax reduces gasoline demand and keeps dollars in America, dries up funding for terrorists and reduces the clout of Iran and Russia at a time when Obama will be looking for greater leverage against petro-dictatorships. It reduces our current account deficit, which strengthens the dollar. It reduces U.S. carbon emissions driving climate change, which means more global respect for America. And it increases the incentives for U.S. innovation on clean cars and clean-tech.

Which one of these things wouldn’t we want? A gasoline tax “is not just win-win; it’s win, win, win, win, win,” says the Johns Hopkins author and foreign policy specialist Michael Mandelbaum. “A gasoline tax would do more for American prosperity and strength than any other measure Obama could propose.' "
http://www.nytimes.com/2008/12/28/opinion/28friedman.html?ref=opinion