Charles Krauthammer: Gas Tax Advocate

See his take on gasoline consumption here. His plan is a bit bolder than mine, and he doesn't specify what the tax would do, other than feed the U.S. Treasury. My plan, posted a few days ago, would take the money and spend it on automobile alternatives. Both municipal public transit and medium distance rail. Frankly, I there is a lot to like about Krauthammer's plan. It creates a price floor for gasoline, using a floating tax to keep the price at $3 a gallon. As consumption fell, both through lower consumption, and through consumer pressure for efficiency, the outside effects of high gas prices (feeding the Saudis, for example) would decline toward zero as we fell back toward domestic supplies.

Greg Easterbrook also advocates a gas tax. His NYT article makes most mention of a revenue neutral gas tax plan which raises the gas tax fifty cents, with a coresponding tax cut elsewhere. He makes other useful observations about the effect, including fewer highway deaths, lower demand, hence lower world oil price, less influence of Persian Gulf oil states on US policy, fewer dollars to oil sheiks, smaller trade deficit, and few greenhouse-gases. Easterbrooks plan is more likely, given political constraints, because its just a tax shift, rather than a tax increase, but its also less substantial. Also, it reduces demand by creating a higher price, but it does nothing to satisfy alternatives. As a good neo-liberal, Easterbrooke woudl expect the market to solve that problem on its own, and there is merit to that possition, but I would still prefer to divert the additional tax revenues to investment in automobile alternatives.

The Detroit News had an article on March 3 about how US automakers make fuel effecient cars for foriegn markets, but sell Americans cars with more power, a trade off for effeciency. So while Easterbrooke suggests a phased in approach to let Detroit adjust, this article informs us that the adjustment wouldn't be substantial, and would be more a shift in expectations, not in design philosophy. The article mentions the English version of the Ford Focus gets 37 miles to the gallon, while the Ford Focus homepage for Americans will get you 32-35 miles to the gallon depending on which configuration you select.