Wednesday, May 5, 2010

Can we leverage the oil slick in to a gas tax?

We've written about the gas tax before (or the lack thereof). But with a new focus on the perils of offshore drilling (and oil spills in general), it seems that it might be a good opportunity to impose, and properly frame, the gas tax.

As Jonathan Chait (and surely others) adroitly points out, we are not paying for all of the externalities. We're definitely not paying for the rather obtuse problem of carbon dioxide and other greenhouse gases. There are ideas on how to put a price on it (a carbon tax), but none are particularly sellable. Despite the rather dramatic evidence, global warming is a hard sell. Yes, it's one degree warmer than it was, but there are still cold snaps and snowstorms. Try to convince the public that it's a problem, and you're bound to run in to contrary "evidence", even if the evidence is weather while the problem is climate.

In any case, to impose a tax, you often need a good reason. And the oil spill—as bad as it is in the affected area—might be a good enough reason. Yes, we all want BP to pay for the damage. But, likely, the government will kick in, or at last have to pay first and go after BP later. Here's where the framing comes in. Instead of a carbon tax (which we don't understand) we need a "save the birds and marshes fee." Show a bunch of oil-slicked birds, and put a 5¢ fee on each gallon of gas. Because when it happens again (and, oh yeah, it'll happen again), we'll either have more money, or fewer oil tankers and rigs. Neither of which is a bad thing.


  1. Ari - while I fully support an increase in the federal gas tax, the current political climate is very unfavorable for the Obama administration to propose an tax increase: while we should not cower in fear of the Tea Baggers or the GOP the midterm elections are coming up and it is going to be a fight.
    As for the oil spill, this will ruin BP, my friends and family have been talking about this for about a week now; and while I have not been monitoring their numbers this tragedy will certainly have its own implications: I am going to quote you on this one: "But, likely, the government will kick in, or at last have to pay first and go after BP later"
    If the Obama administration does well and Democrats hold their ground in the midterm elections, then we'll talk about raising the federal gas tax...hopefully there will also be more affordable (in the $15,000 to $20,000 range) Hybrid or fully electric cars on the market for those who depend upon automobiles.
    Keep up the great topics

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