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Gas Tax Solution

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I know in this current financial crisis the last thing we need to do is increase taxes for anyone. But, with the low prices of gasoline I think it wouldn't be that awful of an idea. In the next few months I am planning to talk to one of the congressman of my state to talk about a possibly higher gas tax. However, my plan isn't to spike gasoline up 50 cents per gallon but more like maybe an additional 5 cents. So put it this way, in America everyday we use 390 million gallons of gasoline(sorry for the 2007 figure), and lets say that gas is at 1.50 a gallon. If we were to add an additional 5 cents the government would make 19.5 million dollars a day, and in a year 7,117,500,000. So what I'm also proposing is we use this money to fund future developements in alternative energy and transportation(especially Tesla :biggrin:). What do you think? I would love any ideas or input that anyone has on the situation.
 
Driven: Shai Agassi's Audacious Plan to Put Electric Cars on the Road

Agassi got to work convincing the Israeli government in 2007. First he, Peres, and Israeli prime minister Ehud Olmert pressed legislators to change the tax code to make electric vehicles more attractive to consumers. Under the proposed tax scheme, Israel's 78 percent tax on cars would be replaced by a 10 percent tax on zero-emission vehicles and a 72 percent tax on traditional gas-guzzlers. (After four years, the sales tax on electric vehicles will rise sharply.) Agassi argued that the revenue losses—calculated at $700 million over five years—would be insignificant compared to what foreign oil costs the economy. At a Jerusalem press conference in late January, Olmert beamed down at Agassi, who was sitting in the front row: "In order to bring about this dramatic change, sometimes we need a boy like in the fairy tales to say, 'Look, the emperor has no clothes.' We can all see that for ourselves, so how come we haven't said so? And this boy comes along and puts things in motion to bring about change. And the boy in this story—and he really is a boy, practically, but he has achieved more than many adults have—is, of course, Shai Agassi."
 
Gasoline is only a piece of the puzzle. To solve the problem of carbon emissions, we have to tackle that directly. There's even a revenue-neutral way to doing it: Cap and Dividend. Here's how it works:

Put a cap on carbon emissions. Auction off the right to emit CO2 to the energy companies, letting the market decide what the value of CO2 emissions are. Now here's the important part: take the revenue from those auctions and distribute them to the taxpayers by way of a dividend check.

This will put a cap on CO2 emissions, increase the cost of carbon emissions, incent consumers to reduce the CO2 their consumption produces, and give the voters a reason to love the system and demand that it continues in perpetuity.

The cost of gas goes up, so the value of EVs increase. People get money in their pocket to spend on EVs (and/or other ways to reduce their carbon footprint) and the market solves the problem.
 
You only want to limit CO2 or you actually want its level to stop increasing or even drop? If you only want to limit it to current production levels you hadn't done anything except limit the wellbeing of many people = fascism. If you want to decrease the CO2 emissions you will only worsen the living conditions of even more people.

There is only one way toward the cleaner future - technology development. But you cannot force development, you can only permit it. You thing we now would have electricity if in 1840 governments would limit coal production and consummation? You thing there would even be steam engine if kings would limit number of horses on the roads?

Todays environment is way cleaner than cities from 100 years ago. Thing is, you can only see today's environment and not that from 100 or 200 years.

CO2 is a not a problem, it is only obscuring real problems and is very useful for scaring people for scared are easier to manipulate.

Have you notice something? It is not global warming anymore, now it is climate change.
As if there ever was a climate that was not changing all the time.

You want tax on gas? Ok, you go an pay it, but please don't force me into paying it.
 
Tomsax i love that idea but I'm not sure if in the U.S. we would ever see this occur. Warped, i know people dont want to be paying higher prices but 5 cents per gallon isnt much if your looking at the big picture. This isnt about the environment(although it helps), but more about maybe an additional way to fund these up and coming companies with good ideas
 
I think a gas tax is a good idea. Say a phased in $2/gal tax (perhaps more) if only to discourage consumption. As to where that revenue would go, I'm sure many interests would try to get their hands in the pot. Funding alternative energy is nice, but the roads themselves are often in need of repair which actually is an important factor in overall fuel consumption.

I'll tell you what the worst tax idea is, though. About a month or so ago, some politician (does anyone remember who? I think it was Harry Reid) suggested an adjustable tax that would keep the price of gas above $4/gal or so (i forget exactly how much). So if, for example, the price of gas was $1.80 the tax would be $2.20, and if the price went to $4 or above the tax would be $0, etc.

Of course on first glance, that sounds good... But that "decision maker" must have no understanding of basic economics. By removing demand out of the price equation that way, he basically ensures that the oil companies will charge a minimum of $4/gal with no additional tax revenue collected. ( I'd appreciate it if any econ experts can add some insight on that or correct me if I'm wrong.)
 
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You want tax on gas? Ok, you go an pay it, but please don't force me into paying it.

I hear you... but with the current war costing in excess of $3 trillion of tax payer money - there is an enormous taxpayer cost of continuing with an oil based economy regardless if it comes directly from a gas tax or not. Even in peace time a very large percentage of our military budget goes to securing the energy supply.

So there is an extremely large tax payer cost today... just not directly tied to gas. Carbon emissions aside, and the current war aside if we do nothing to promote alternatives to gasoline there will continue to be a large taxpayer cost ongoing for the future.

And that is assuming that you don't consider the price of gasoline mostly a tax to the OPEC nations themselves.

There are many reasons beyond Carbon emissions that an government based incentive/disincentive for moving away from gasoline (like a gas tax) may be a reasonable action.
 
I agree with Doug on this one.

Personally, I think all things should be taxed according to any problems they create in other areas.
For example, anything that pollutes, should be taxed as much as it is needed in order to clean up the pollution.
Oil would most likely have a particularly high tax in this area due to both environmental problems it creates as well as protecting the movement of oil which would most likely be done regardless of foreign policy. Also oil money goes to people who are cause huge amounts of human suffering something that should be unacceptable to the US. And the US is basically funding both sides of its "war on terror".

I think it would perhaps be fine to create a system also where by people who rely on certain cars for work, that they would not have to pay a tax for gasoline. But the average person who insists on driving gas guzzling cars would need to pay, especially if they have no good reason for it.

I think a system like this would reward companies who are responsible with the environment and/or don't cause the government to have to spend money to clean up after them or protect their interest with government money.

This is better for the free market. Why? Because it helps allows competition, whereby the price that people are paying, for whatever product, are the true price that it costs. This would cause competition with true prices and would cause companies to look for ways to make/create their products so they don't have to be taxed because they don't have "issues and problems" attached to them. If people were paying the true price for gasoline, I think they wouldn't have bothered doing it for so long, because competition would have been allowed, which I think would have made it an unacceptable option to people a long time ago. Therefore this tax method, would deter companies from providing products that are harmful.

In my opinion, the free market needs government regulation. The government needs to protect competition. Competition does not happen naturally because there are greedy people who just want control and power.

The problem here though, is that there are powerful people who would not want the system to change because they are happy to claim that the system is a true free market so that it sounds like they are justified in their corruption and disregard for what is good for life in general. Of course they are using politics and all. It may not always even be that contrived, it may just be more unconscious sometimes or people look for ways to justify it publicly, or maybe even to themselves.
 
I am not talking about CO2 necessarily. But I am pretty sure there are pollutants that harm life. They do it all over the world, dump pollutants into rivers because its cheaper for them. There are many examples of companies doing what is cheaper and what is "competitive". So we change the competition to protect life.

What? Ever heard of evolution?

What do you mean by that?
Evolution justifies companies doing harmful things?
How about some things are just right and some are wrong.
And we apply those principles, otherwise we are stuck in economic systems
that are more like traditional evolution, meaning people killing for power and money.

If the consumer was protected, the car companies would have started this change they are supposed to be starting to make, a long time ago.
 
In general, I'm a fan of less government. But for a free market, you do need some government regulation for the market to remain free. The natural result of completely unchecked capitalism, that evolution if you will, is monopolies, collusion, and the loss of competition in the market place. We need government to enforce laws that try to promote competition and ensure ethical business practices (that could include environmental concerns among other things) so that well all don't get screwed. Anti-collusion laws, for example, are necessary for the free market to work.

Of course, government tends to go too far and screws up the free market in other ways...


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This is way premature. There are hardly any EVs on the road yet. The cost of collecting this new tax would be more than the revenue generated. So why do this now? If they're concerned about lost gas taxes, how about they just, I don't know... RAISE THE GAS TAX??? You'd think they'd want to incentivize efficiency.

Come to think of it, perhaps the reason they want to do it now is actually because there are hardly any EVs yet. Create the tax while EV drivers are a minority and there won't be much political opposition. They may even get support from the majority gas car drivers who want to stick it to smug EV drivers who get to "unfairly" avoid gas taxes (and the gas station all together).

Trying to just raise the gas tax, though??? When was the last time that happened?
 
And, for some reason we keep forgetting that these gas taxes are there to maintain the roads. But howcumizit that the road damagers pay vastly less taxes for the amount of damage done? Without much googling, you find that damage to a road is a function of vehicle weight ratio *to the third or fourth power!* In other words, a small car weighing 2000 lb compared to a Sub Urban weighing 6000 lb is a 3 times ratio, so the 4th power of 3 is over 6000: 6000 times the damage. Do they pay anything like a fair tax? They do not. But the ICE manufacturers want to make sure that this miniscule EV industry gets whomped with extra taxes so they don't succeed. Oh, and lest we forget those large 80,000 lb trucks compared to a 4000 lb EV: over 250 million times the damage. That's why they want everyone to share the taxes. The truckers would have to let electric trains do the long distance hauling.