Tax Gas More

Now, now, calm down there my gun toting, short haired, “if the poor don’t like being poor they can get a damn job” friends. The Bay has not gotten to me yet. My tofu consumption has not increased and I do not have a handsome “roommate” with a well trimmed goatee. More to the point, I drive a Ford Mustang rather than a Toyota Prius, because I’m good at math.

Fact of the matter is, gasoline is an insignificant portion of the cost of car ownership. Based on my records, I spend about $1500/year on gas. Let’s assume I bought a Prius that got 3x the mileage my Mustang gets. Wow, I just saved $1000! And it only cost me $25,000.

Figure the average yuppie buys a new $45,000 car every five years, drives it 50,000 miles and gets $20,000 back on the trade-in. At 20mpg, that’s $7750/year for depreciation and gas. At 60mpg, that’s $6875. Those amounts are close enough that no sane person is going to make mileage a big factor in the purchase of a car. For about $75/month, he can get the big ass SUV with room for everything instead of the hippie mobile. (The story is different if you have a really horrendous commute.)

I found some data at the man's propaganda machine. They say 840 million gallons of petroleum products consumed per day. Long hair hippie treehuggers estimate the Iraq war at around $105 billion a year. That’s 34 cents per gallon of petroleum products. (You can object that not all of our oil comes from the middle east, go and do the more complicated math, and you will end up at the same number. Proof left as an exercise for the reader.) Right now, the price of gasoline is subsidized by 34 cents from other sources, meaning income taxes, borrowing from the children, etc. So, jack it up 34 cents a gallon right there. That’s on top of the federal and state road taxes. I’d also support funding an appropriate percentage of emergency services with gasoline taxes.

As to the environmental impact, now, libertarians are fond of saying, “let the market decide.” But don’t forget an important detail, what we want the market to decide is efficient allocation of resources. But the issue of assigning the right to those resources to begin with doesn’t happen in the marketplace. The environment is the epitome of a public good. So while I might be of the opinion that the Earth is big enough and old enough to take care of itself, some other people seem to have a strong emotional attachment to our current climate and the details of coastlines. Fine. Put a price on it. Let’s all agree on a fair market price for carbon emissions and specify where the payments go. Or cap it. Set it to the average emissions at some point, give each country what it currently has, and never touch it again (it is critical that these caps and allocations never be changed). Then just create a market. Let the poor countries pollute if they like. Or let them sell their carbon rights. Hell, let them go into debt if they please. But the question of transfer payments to countries run by criminal thugs (and I mean real, chop-his-head-off thugs, not the white coller criminals running our own country), is entirely separate from the question of market mechanisms to efficiently allocate scarce resources (in this case, the amount of pollution the environment can reasonably absorb). Conflating these separate issues cannot lead to reasonable policy.