A Tax America Needs

It all comes down to oil.

But for oil money, we would likely never have heard of George W. Bush. Or, for that matter, Osama bin Laden.

Ponder that.

Oil money funds the rising power of Iran – and, through Iran, Syria and Hezbollah. It provides much of the financing for Vladimir Putin’s resurgent, disturbingly neo-Soviet, Russia. It enables the Bolivarian revolution which threatens to sweep out of Venezuela to dominate the Caribbean and Latin America.

Even as oil money strengthens our adversaries, America keeps sending dollars abroad to support its oil habit – a fact which has transformed us from the world’s generous creditor into its biggest debtor. At its heart, our permanent trade imbalance has less to do with Wal-Mart than with the corner Exxon station.

Setting all that aside, emissions from automobiles play a critical role in the dawning emergency of global warming.

We must begin cutting back on our consumption of oil, and every thinking American knows it.

The problem is, of course, that our two political parties prefer to focus on replacing foreign oil with something else. Preferably, something produced domestically. Ideally, something produced in abundance in the politically-vital state of Iowa.

Which is simply no answer at all. A gallon of corn-based ethanol requires nearly a gallon of gasoline to produce – making the ethanol subsidy a poor bargain, but a magnificent political boondoggle.

Besides, even if we could grow our own, switching fuels would do little to slow the melting of polar ice-caps, the rising intensity of violent weather systems, the lengthening life-cycles of destructive insects, and the spread of tropical diseases into once-temperate zones.

To reduce our dependence on oil, while addressing global environmental catastrophe, we must use less energy.

To use a word grown curiously hateful to modern conservatives, we must conserve.

The most effective first step toward conservation would be to engage ordinary Americans in thinking seriously about how to reduce their individual reliance on gasoline. If we could do that, the rest would follow.

The proof? Consider what happened to the market for gas guzzlers during last summer’s spike in oil prices. Or the less dramatic, but equally significant, changes in driving behavior.

Market forces work. But that does not – must not – mean we should be entirely at the mercy of unregulated markets. We can manipulate markets to provide incentives for conservation – and the obvious way to do that is artificially to raise the price of gasoline and diesel fuel at the pump.

What we need, as every thoughtful American knows, is to raise the price of gasoline. And the obvious way to do that is through a whopping gasoline surtax, payable at the pump.

The problem with this obvious solution is politics. Big Oil, Detroit, and the Club for Greed would go after a surtax the way Big Pharma and the insurance industry went after the Clinton health reforms.

You can picture the TV ads.

Still, a gasoline surtax is the obvious answer. And, since Americans aren’t very good at trading short-term pain for long-term gain, we need a surtax that doesn’t hurt too much, too quickly, or cause massive disruptions in our lives.

Indeed, we need a surtax that is easy to avoid. Because, as much as Americans hate taxes, they love avoiding taxes even more.

What we need is a surtax that seriously influences energy consumption, but is relatively easy to beat.

Something like this...

A Federal surtax of $1.00 per gallon on gasoline (and diesel) – exempting each licensed, adult driver from the surtax on the first thirty gallons purchased each month.

With modern technology, it should be a simple matter to issue each licensed driver a magnetized card – like a valued customer discount card – which gas station pumps could be adjusted to read. The card would automatically exempt the bearer from the surtax for the first thirty gallons purchased each month. Beginning with the thirty-first gallon, the surtax would kick in.

The average American drives around 10,000 miles a year – about 30 gallons a month in a reasonably fuel-efficient vehicle. Thus, most Americans could avoid paying the tax by making minor modifications in their driving habits. Those who prefer driving gas guzzlers would have to get more creative – but most people could avoid the tax, with a bit of effort.

Such an easily avoided surtax would produce relatively little revenue, but it would work a gradual change in individual consciousness. Like dieters counting carbs, drivers would start keeping track of how many gallons they consumed each month.

Families would give more thought to consolidating trips. Those in the market for cars would look more seriously at fuel efficiency. Intelligent drivers would slow down a bit, which would make us all safer.

A surtax would also exercise a slight, but continuous pressure against long-distance commuting – thus working subtly to curtail suburban sprawl.

But the immediate impact of the surtax would be nothing compared to its long-term utility. Having established a method of encouraging conservation, we could gradually ratchet down the number of gallons exempted – say, one gallon every two years – until, in twenty years, the surtax applied to every gallon over twenty.

That’s a serious reduction in gasoline consumption – but one which allows plenty of time for Detroit to design sexy, fuel-efficient vehicles, and for developers to discover the potential of reviving our cities and close-in suburbs. Time, indeed, for our metropolitan areas to get serious about mass transit.

A surtax along these lines would provide a flexible tool for gradually moving America toward serious energy conservation. It wouldn’t be painless, but it would minimize disruption while imposing a slow, steady market pressure in favor of energy conservation.

And it would square with what we know about Americans’ attitudes toward taxes. By involving all of us in a perpetual hunt for new ways to avoid using more than the exempted number of gallons each month, it would enlist American ingenuity in a permanent search for ways to reduce our dependence on oil.

Worth a try, don’t you think?