Tax Instead Gas Guzzlers & Luxury Cars - Bill Lee

[BillLee]

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The thing that John's solution fails to take into account is the economic hardship (and the next round of bankruptcies) that would likely result from his solution.

The alternative being: To put the taxes on gas guzzling vehicles and luxury (non need based) gas consumption. (Roughly put, you need to go to work, the grocery store, and the hospital, but not out to eat, to soccer practice, or RL.)

Economic hardships (& bankruptcies): John's proposed gas tax solution does not take into account the enormous geographic difference between the U.S. and European countries. The importance of that difference being the much greater distances that must be traveled by some involved in commerce in the U.S.. For instance the result of large gas tax increases could lead to the bankruptcy of many long haul trucking companies, and massive food price increases. "Buy locally", "sustainable", and "home grown" are wonderful laudable concepts, but not all encompassing. For instance "home grown" might have a tendency to run a bit thin in Alaska or Death Valley. Those who think fish is a healthy alternative to beef might find Utah's commercial fishing industry to be a tad bit lacking. etc., etc.

While the things John claims to be the likely result of massive gas taxes are desirable, the results he doesn't mention could be disastrous and are avoidable. Admittedly many who can just "afford" increased gas taxes think they are a wonderful idea. Less pollution and more gas for them. However AGAIN they fail to take into account those who just can't absorb another big expense.

[solutions]

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There are at least four things wrong with Bill’s proposal – which should be interpreted in the light of his earlier comments posted under the Topic of “Why I Oppose Gasoline Taxes.”

First, he doesn’t explain why he discriminates against increases in the price of gasoline caused by increasing the U.S. motor-fuel tax to provide adequate financing for social security and universal health care, to reduce carbon emissions, to reduce the international balance-of-payments deficit, and to increase national security by reducing the reliance of the U.S. and its allies on foreign oil – BUT DOESN’T COMPLAIN AT ALL ABOUT INCREASES IN THE PRICE OF GASOLINE CAUSED BY CRUDE-OIL PRICE INCREASES DECREED BY THE ORGANIZATION OF PETROLEUM-EXPORTING COUNTRIES (“OPEC”).

Second, he doesn’t explain how his proposal could be implemented as a practical matter.

Presumably he would find just as laughable as I an honor system under which motorists who think their fuel needs are essential would stop at the low-tax/price pump and motorists who think their fuel needs are frivolous would stop instead at the high-tax/price pump.

Accordingly, he must think (if indeed he has focused on the problem) that the low-tax/price pump could be equipped with a scanner that would permit regular vehicles to fuel up while rejecting SUV’s that would have to go to the high-tax/price pump.

Third, this segues into the problem that his proposal is not merely trying to get President Obama to exhibit enough leadership to ramrod an across-the-board European-style gasoline tax to finance health care and social security, but that Bill would be trying to convince President Obama to exhibit outright hostility to SUV owners by imposing a discriminatorily-high tax against them.

It would be much easier (though still very difficult) to get American pols to effectively tax gas guzzlers as a public nuisance with an across-the-board tax that applies to all motor-fuel users without falling more heavily on gas guzzlers because of their less-efficient usage – rather than merely enacting CAFE standards that are only a fraction of today’s European CAFE standards and will not take effect for many years and will always fail to raise any revenue for health care and social security.

Fourth, Bill alludes both in his Proposal above and his “Why I Oppose Gasoline Taxes” Topic posted separately to the widespread bankruptcies of trucking companies if motor-fuel taxes are raised.

I suspect Bill has never studied economics (my father, John Karls, majored in economics before attending law school and I graduated from M.I.T. with a double major in economics and electrical engineering).

The short answer is that trucking companies will not be bankrupted.

The longer answer is that with both the historical leaps in OPEC prices and with a possible leap in the U.S. motor-fuel tax to finance health care and social security, all trucking companies would face the same additional cost. Accordingly, they would all have to raise the fees they charge by roughly the same amount.

It is possible that there may be, for a short period of time, a slightly-reduced demand for their services caused by (1) the possibility that overall demand for transportation services may temporarily decline slightly because of the increased transportation costs, or (2) the possibility that a small sliver of the goods being transported may be shipped by train rather than truck because of the increase in the cost differential between the two modes of transportation.

However, even if either occurs, each trucking company would only retire one or two of its oldest and least efficient trucks – which would be a good thing from many viewpoints.

But there would be no widespread bankruptcies of trucking companies.

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As for Bill’s argument that America should (in simplistic terms) continue to borrow money from the Chinese to pay for oil imports so that there can continue both Bill’s gasoline usage and a portion of American gasoline usage that Bill considers justifiable, Bill’s policy is unsustainable. America can choose to act now, or we can continue to increase the amount of our foreign-held debt for yet a brief period more before our foreign creditors shut down the U.S. including Bill and his fellow gasoline consumers. By opting for the latter, we forfeit the right to have our own currency (which comprises governmental debt) since nobody will accept it, and thereby forfeit control over our own economic policy, as described in Q&A No. 14.