Wednesday, November 26, 2008

Giving Me Gas

I know that this is something that will be unpopular with most people, but with gas prices dropping below the $1.75/gallon mark, it's time for some drastic action.  While our oil consumption has dropped since gas prices spiked, I think that with gas looking so (relatively) cheap, we will probably go back to our old ways of filling up gas guzzlers.  With that in mind, there is one thing that the government should do, and they should do it straightway: raise gas taxes.  I'm thinking that they should raise them by around $.50/gallon between the state and federal sides.  That would put prices up in the $2 range, which still wouldn't be onerous, but it would between double and triple the amount of money that the government gets from gas.  That could (and should) be used strictly on infrastructure projects - bridge repairs, interstate upgrades, etc.  This would, in turn, lower demand.  Because gas is so cheap it might not hinder it enough to stop a rise in oil useage here in the US, but at that point they could put through another tax increase on gas.  We could exempt diesel fuel from the taxes to provide a bit more level of a playing ground between the two fuels and to prevent the gasoline hike from cascading into more basic goods and services. 
It's absolutely unpopular, but if the politicians are serious about curbing our appetite for foreign oil, this is the first place they should look.

1 comment:

Nick said...

Somebody gets it! I totally agree with you, Sorro. You don't change consumer behavior by mandating that auto companies build small, fuel-efficient vehicles. You change it by giving the consumer a reason to switch. The market will naturally shift the demand!