If alternative fuel drives price to $.50 a gallon equivalent

[DougMD]

Suppose some alternative fuel is developed that equates to $.50 a gallon gas. Of course, gubment should tax for road construction. But what if they equates to $1.00 a gallon. Won't democrats say, "Wait a minute, people were used to paying $4 a gallon for gas, but now only pay $1.00. How about we jack UP tax so they pay $3.00 so we can fund our socialism giveaways to those who don't want to work for a living. That way, people are better off because they are paying $3.00 when they WERE paying $4.00, and at the same time, our socialism is funded."

Isn't this EXACTLY what wouldhappen? [:@]

[Champlain Islander]

Kind of like NY just raising the cigarette tax another $1.25 making it the highest taxed state for tobacco products. Raise it to make them quit is what I heard as a reason.

[Lanse couche couche]

I would cheerfully pay a very high tax on any alternative fuel that gets us independent of OPEC.

[DougMD]

CI,

But then the taxes go away, and they have to get more creative to stick it to people, like a "fat" tax, or "caffeine" tax.

LCC,

I wouldn't, unless the total new increasewent to debt reduction with new, non-negotiatble limits on spending to ensure we don't hand our kids double digit $ trillion debt!

[Lanse couche couche]

I would settle for not having to send our kids over to fight in the Middle East every decade because of our depencency on oil from that area.[&:] Under that condition, i would happily saddle them with debt.

[DougMD]

This fight in Iraq wasn't about oil. We could have continued to get oil and not gone in. Terrorist nations will sell oil on the open market because it makes them money.

I simply find it ironic that the same people demanding alternatives will ensure that the price we pay is almost as high as now, albeit with their new taxes taking up the slack of the cheaper energy alternative. Socialism at its level best!!!

[Lanse couche couche]

If it werent for oil in the Middle East, then we would be about as interested in intervening in that area as we are in going into Rwanda or the Darfur region.

[DougMD]

I don't see any benefit we've gotten out of going in whatsoever. Seems to me there has to be some benefit to suggest that's why we went in. I think we SHOULD conduct war when its in our national interest, just like any other nation on the face of the planet does what's in its national interest. I just don't see where that was the case here, though I may be overlooking something. After all, there were blockages from selling oil to the US before we went in.

[Lanse couche couche]

In an ideal world, we would be paying about a dollar a gallon for gas because Saudi Arabia and Kuwait and other nations in the region would be so grateful for getting rid of Hussein. However, just because we are very interested in that area because of oil doesn't mean that we reap some great benefit in terms of cheap fuel by being involved over there.

[Fieldmouse]

I don't agree with him. He does make some interesting points. He is also someone I've enjoyed reading because you know where he comes from.[/align][/align]


At $4, Everybody Gets Rational








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By Charles Krauthammer[/align]Friday, June 6, 2008; Page A19

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So now we know: The price point is $4.

At $3 a gallon, Americans just grin and bear it, suck it up and, while complaining profusely, keep driving like crazy. At $4, it is a world transformed. Americans become rational creatures. Mass transit ridership is at a 50-year high. Driving is down 4 percent. (Any U.S. decline is something close to a miracle.) Hybrids and compacts are flying off the lots. SUV sales are in free fall.
The wholesale flight from gas guzzlers is stunning in its swiftness, but utterly predictable. Everything has a price point. Remember that "love affair" with SUVs? Love, it seems, has its price too.
America's sudden change in car-buying habits makes suitable mockery of that absurd debate Congress put on last December on fuel efficiency standards. At stake was precisely what miles-per-gallon average would every car company's fleet have to meet by precisely what date.
It was one out-of-a-hat number (35 mpg) compounded by another (by 2020). It involved, as always, dozens of regulations, loopholes and throws at a dartboard. And we already knew from past history what the fleet average number does. When oil is cheap and everybody wants a gas guzzler, fuel efficiency standards force manufacturers to make cars that nobody wants to buy. When gas prices go through the roof, this agent of inefficiency becomes an utter redundancy.

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[/align]At $4 a gallon, the fleet composition is changing spontaneously and overnight, not over the 13 years mandated by Congress. (Even Stalin had the modesty to restrict himself to five-year plans.) Just Tuesday, GM announced that it would shutter four SUV and truck plants, add a third shift to its compact and midsize sedan plants in Ohio and Michigan, and green-light for 2010 the Chevy Volt, an electric hybrid.
Some things, like renal physiology, are difficult. Some things, like Arab-Israeli peace, are impossible. And some things are preternaturally simple. You want more fuel-efficient cars? Don't regulate. Don't mandate. Don't scold. Don't appeal to the better angels of our nature. Do one thing: Hike the cost of gas until you find the price point.
Unfortunately, instead of hiking the price ourselves by means of a gasoline tax that could be instantly refunded to the American people in the form of lower payroll taxes, we let the Saudis, Venezuelans, Russians and Iranians do the taxing for us -- and pocket the money that the tax would have recycled back to the American worker.
This is insanity. For 25 years and with utter futility (starting with "The Oil-Bust Panic," the New Republic, February 1983), I have been advocating the cure: a U.S. energy tax as a way to curtail consumption and keep the money at home. On this page in May 2004 (and again in November 2005), I called for "the government -- through a tax -- to establish a new floor for gasoline," by fully taxing any drop in price below a certain benchmark. The point was to suppress demand and to keep the savings (from any subsequent world price drop) at home in the U.S. Treasury rather than going abroad. At the time, oil was $41 a barrel. It is now $123.
But instead of doing the obvious -- tax the damn thing -- we go through spasms of destructive alternatives, such as efficiency standards, ethanol mandates and now a crazy carbon cap-and-trade system the Senate is debating this week. These are infinitely complex mandates for inefficiency and invitations to corruption. But they have a singular virtue: They hide the cost to the American consumer.
Want to wean us off oil? Be open and honest. The British are paying $8 a gallon for petrol. Goldman Sachs is predicting we will be paying $6 by next year. Why have the extra $2 (above the current $4) go abroad? Have it go to the U.S. Treasury as a gasoline tax and be recycled back into lower payroll taxes.
Announce a schedule of gas tax hikes of 50 cents every six months for the next two years. And put a tax floor under $4 gasoline, so that as high gas prices transform the U.S. auto fleet, change driving habits and thus hugely reduce U.S. demand -- and bring down world crude oil prices -- the American consumer and the American economy reap all of the benefit.
Herewith concludes my annual exercise in futility. By the time I write next year's edition, you'll be paying for gas in bullion.
letters@charleskrauthammer.com



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