A lot of things are down now. Things we wish were up: Employment figures. Manufacturing production. Profits. Wages. Even bonuses on Wall Street (although only the bankers are likely to miss those). Things that are up — cost of health care, and personal, business and federal debt — we wish were down. There's one thing that is currently down (and most people are pleased that it is) but I wish was up, even though I know no one will like it. That's the price of oil.
Americans have been spoiled by low gasoline prices for most of the automobile's history. Unlike drivers in Great Britain, the European Union and elsewhere in countries that have no petrol reserves to call their own, we've paid a comparatively small price for our automotive freedom. We're spoiled. So we were shocked, shocked to see prices shoot up in 2008. We got a reprieve — one we do not deserve — when the bottom fell out of the world economy, and diminishing demand brought the price of gas back down from its brief peak at about $4 per gallon. While that may have you sighing we relief, it irritates me to no end.
If the climate change folks are right and global warming is the threat they think it is, it makes no sense for our government or us to sit back and watch the price of gas fall.
The Obama Administration has missed a significant opportunity to stimulate the economy, to stimulate development of alternative energy and begin to wean America from its dependence on foreign oil. We could make a truly meaningful investment in and make progress toward those worthy goals with one simple act: Institute an adjustable tax rate on gasoline that raises it's price, again, to $4 a gallon (with an adjustment clause to cover any future inflation).
I'm not joking. Consider: We know from our recent past that $4 per gallon is a pain point for Americans that stimulates real action: Last year, people bought and actually rode bicycles, took mass transit, drove less, negotiated "work at home" days with their bosses and began to talk about electric and hybrid electric cars like they're more than a curiosity.
At $4, demand would stay low, so crude would continue to trade low and the tax raised would remain high. The best part is that the increased tax revenues could be a huge stimulus to the economy and go a long way very quickly toward getting us out of our fossil fuel predicament.
Here's how: I paid $1.75 for gas just the other day. I bought 8 gallons of gas for my subcompact car. If I had paid, instead, $4 a gallon under our new tax, the revenue raised from me at that one stop would have been 8 X $2.25 = $18. Conservatively, let's say everyone drives a subcontract and that we all fill our tiny tanks only twice a month. Again conservatively, let's say there are 50 million cars on the road in the U.S. That number times the $36 in tax per month comes out, per annum, to $21,600,000,000. That's right, $21.6 billion.
Wow. Well, wait. There's more.
We all know that most people spend twice to three times as much as I spend on gas in my thrifty little compact and that there are many move petrol-driven vehicles. There are, in fact (I just looked it up), more than 250 million passenger vehicles on the road in the U.S. today. If they all consume only my meager amount of gas, the tax revenues would add up to $108 billion. Adjusted for filling up four times a month (more realistic) that figure doubles. If we allow for half of the passenger vehicles to be bigger than my subcompact, we could probably almost triple the amount. Just to be safe, let's call it $300 billion. That's more than six times the total amount Mr. Obama has earmarked for alternative energy development in his stimulus bill. And this would be real money, not debt.
If we really believe we have a problem with global warming, and we really accept the fact that saving the planet is an immediate and grave concern, then we've got to have the guts to pony up some real dollars to solve the problem.
I'd be on the hook for $432 per year, because, yes, I only fill my tank twice a month. (Some of you would pay more, but that's your choice. Nobody's holding a gun to your head.) I'd consider that a small price to pay for a meaty, effective investment in technology that will hasten the day we're in possession of affordable clean transportation and no longer dependent on fossil fuels. (There will come a day, if we don't act now, when it will cost far more than that, per person, to slow the destruction of our planet. And someone may have a gun to our heads, at that point. Worth considering, don't you think?) Frankly, most of the people I know spend at least that much on beer, frothy caffeine-laced concoctions, donuts and/or fast food every year, none of which will save the world or their waist lines. And they think nothing of it.
While the largest portion of the tax revenue would go to alternative energy research, development and commercialization programs, some of the funds could be used to give folks incentives to buy electric cars while they're still a bit pricey, to prime the pump (but not the gas pump).
All this, of course would create jobs and put autoworkers back to work, not to mention get money and credit flowing again. And the best thing about this new tax program is the built-in performance incentive. People hate paying taxes. It's just human nature. So it would be mightily painful (at least psychologically), and that's good. They'd be pressuring their Senators and Representatives to bully the car companies (who owe us, big time, for the bail-out funds) to get the job done. The more money we raise in taxes, the faster alternative energy gets mainstreamed. The sooner we all are driving electric cars, the sooner the tax goes away and, hey ... the pain stops! Then we can all get back to our Mochas and Budweiser.
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