- 70% of all oil consumption goes to gasoline - any energy policy that seeks to reduce consumption must start here
Consider the following scenario:
1) In the interest of national security and energy consumption, the government will now add a $1/gallon tax on all gasoline (not jet fuel, only automobile gasoline).
2) Total revenues from this tax will not be retained by the federal government, but will be disbursed evenly across all tax payers (everyone receives the same amount)In this scenario, the price of gasoline would rise (reducing consumption), but the government would not be profiting because the $$ is returned to the public. Additionally, since the total tax revenues are distributed evenly to the public, those who use a large amount of gasoline a year would receive a penalty (because their share of the total will not amount to their contribution) while those who use a small amount of gasoline or none at all will be rewarded (as they will be receiving a share of a tax they did not pay). In this way we have a double incentive to reduce consumption while avoiding the usual problem of increasing creating a tax that is a direct transfer of wealth from the citizens to the government. Also, since the refund is only paid to tax payers rather than tax filers, it should not be seen as an expansion of the welfare system (which would distort its purpose)
For businesses, we would need to find a way to lessen the tax burden or exempt them altogether.
Do you think this would work?
Why or why not?
2 comments:
I think the idea by itself is pretty interesting: giving people a monetary incentive for decreasing fuel consuption.
There would be positive effects not only on energy consumption and national security (do you mean: the more fuel you save, the less Middle-East oil you need, with all good consequences coming from the fact that the US won't need to physically stay in the Middle-East almost anymore and won't possibly be menaced by those people anymore?), but also on pollution and global health.
The only problem in the US is that maybe people won't decrease their fuel consumption under a certain level, which probably has already been reached. This is because US cars have high fuel consumption rates, having high cubic capacity and power; in addition, public transportation in the US is high performing only in a couple of big cities, so if someone needs to go somewhere he/she will use a car, just because there's no other way.
Maybe something else could be done with those money earned with the additional tax: investing them in electric cars, electric public transports, alternative fuels, to try to decrease the need of oil (which is the problem now), not just its use.
I'm not gonna say whether this would actually work or not, cause I honestly have no idea. But one thing I can say is that I am amazed you would not only support it but come up with it. It strikes me as a very unconservative idea. In fact isn't this a very liberal borderline socialist idea. What you are basically advocating is a redistribution of wealth, penalizing those who spend more and rewarding those who spend less. I know that isn't your rationale for doing it, but that is what would happen. Just wondering how that jives with your conservative economic philosophy?
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