Time for a gas tax hike

When TV stations or newspapers  ask “regular” people about plummeting gas prices, they all say “We love ’em!” I’d like to give a different view. The 44 percent drop in oil prices since June may be good for consumers’ budgets, but it’s bad for the planet we live on.

There’s an easy solution. With the price low, this is the perfect time to dramatically increase the gasoline tax and return all the revenues to vehicle owners.

I’m not saying that I drive around looking for the gas station with the highest prices, but have we considered all the impacts of the price drop?

There are several causes: 1) much higher U.S. oil production, chiefly because of fracking; 2) sluggish economic growth worldwide, suppressing demand; 3) Saudi Arabia’s decision to keep pumping oil despite the price drop. Low gasoline prices are likely to continue through 2015, and in some areas we’ve seen prices at the pump dip below $2 a gallon.

There are benefits to low gas prices. Spending less at the pumps, consumers have more money to spend on other things, thus creating jobs. Russia’s economy, largely based on oil exports, is hurting more from low prices than from sanctions instituted after the invasion of Ukraine. And persistent low prices could kill the Keystone XL pipeline because they could make it uneconomical to extract oil from Canada’s tar sands.

But consider the effect that low prices are having on climate change. Just as price declines in solar electricity generation were making it competitive with fossil fuels, that bar is now set lower. And the short-sightedness of the American consumer has caused Prius sales to decline by 11.3 percent through September, compared to last year, while sales of the 17-mpg GM Sierra are up by 57 percent.

If low gas prices make us use more of it, that means more carbon dioxide in the atmosphere. And climate change is not some far-off problem we can leave to our grandchildren to solve. In the Alaskan town of Shishmaref, average temperatures are up 3.4 degrees in the past 50 years, melting the permafrost and causing massive erosion on the shorelines. Some island nations are so threatened by rising seas that they are considering acquiring land on other continents so that entire countries can be moved. That’s our future if we don’t get emissions under control.

We should increase the gasoline tax by at least $1 a gallon, and Massachusetts, which was a pioneer in health insurance and marriage equality, should lead the way. We could make it more politically palatable, and not lose the economic stimulus, by returning all the money to car owners through a rebate program. That would provide a major incentive to use less. A sensible option would be to invest some of those revenues in infrastructure improvements, though I fear that a “revenue neutral” tax is the only one voters would support.

Why is it that when petro-states like Saudi Arabia increase gas prices, and we send the extra money to them, American consumers just shrug their shoulders and dig deeper into their wallets, but when the increase comes from a tax whose revenues are returned to them, they go ballistic?

 

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2 thoughts on “Time for a gas tax hike

  1. Pingback: A simple living index | Adventures in the good life

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