Thursday, May 01, 2008

Gas Tax "Holiday"?

Unbelievable! First, (some) politicians want to buy your vote by giving you back you own money (via the stimulus package). Then they want to do the exact opposite of what needs to be done to reduce our gas consumption (again, by trying to buy your vote) - by deleting Federal taxes on gasoline over the (pre-election) summer.

The reason this is the exact opposite of what is needed to help us reduce our dependence on oil is: Higher prices reduce consumption. Lower prices (now) encourages higher demand, which uses supply and equals higher prices (later). Again, short-term thinking.

Even though I am for market-driven solutions, the exact right thing to do would be to increase gas taxes (reducing demand) and use that money to develop innovative new technologies to support our utilities and oil companies to move toward carbon-reducing solutions. Unfortunately, that is not politically savvy: John Anderson tried that in 1980 and only received 7% of the popular vote. Lesson learned! Which is why we're now in a downward spiral of lower dollar value and upward spiral of oil prices. Don't blame the oil companies, don't blame the politicians, blame ourselves for being fooled. not once, but every election cycle.

Thomas Friedman's article is worth reading: especially if you're interested in how tax policy & energy strategy do (or don't) work.

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