Tuesday, February 28, 2006

NO To A Gas Tax Increase, Unless....

Found this poll story in the New York Times (registration required) this morning, and it's got interesting data.
'Eighty-five percent of the 1,018 adults polled opposed an increase in the federal gasoline tax, suggesting that politicians have good reason to steer away from so unpopular a measure. But 55 percent said they would support an increase in the tax, which has been 18.4 cents a gallon since 1993, if it did in fact reduce dependence on foreign oil. Fifty-nine percent were in favor if the result was less gasoline consumption and less global warming...
Twenty-four percent of those polled said they would support a higher federal gasoline tax if the new revenue was used to help fight terrorism, and 28 percent would go along with a gasoline tax increase if, as an offset, their income taxes or payroll taxes were lowered.'

10 Comments:

At 10:39 AM, Blogger Ray Hyde said...

Raising the gas tax effectively makes gas cheaper in India and China. If the oil comes out of the ground and gets burned over there, does it contribute less to global warming?

The reason we burn fuel is to reap the multiplication of power it provides to the labor force, in other words we get a benefit for using the fuel. If the purpose of the gas tax is to reduce gasoline consumption, it will reduce that benefit as well, and probably cede the benefit to our global competitors.

If, on the other hand, the money is used to decrease dependence on foreign oil, then presumably we get a similar benefit from local sources, and it does not reduce our competitive position. It also improves our balance of payments, our local pollution (maybe), and may improve our security.

So what we see is that almost sixty per cent of the population is in favor of a gas tax increase if it results in things that are unlikely to happen. Furthermore, those are already things that could easily happen without a tax increase, if we simply gave up our propensity for 200+ HP vehicles.

55% are in favor of a gas tax increase if the money is spent presumably promoting alternative fuels which may or may not improve the previous goals.

24% are in favor of a gas tax increase if it is spent on fighting terrorism, which is only marginally related to fuel consumption.

28% are in favor of raising the gas tax if it doesn't cost them any money.

Sometimes you wonder what the people who prepare these polls are thinking, let alone those who take the polls.

 
At 7:56 PM, Anonymous Anonymous said...

Didn't access the NYT so don't know the question they used. Most people think the gasoline tax is tied to the price and are convinced it has already gone up with the rise in the underlying costs (and in some states with it tied to the wholesale price that is true.) I'm sure many of the people they called -- probably 80 percent or more -- live in states where the state tax is higher than Virginia and where it has gone up in the last 20 years.

 
At 5:17 AM, Blogger Larry Gross said...

well.... Canada and Europe have much higher gas taxes than we do.

Does that mean that they have already made this mistake? :-)

I agree with the setiment with respect to the poll questions and the poll answers and the global warming inferences.

But I think what you can get out of the poll is how people feel in general and that is that many feel we are going in the wrong direction with respect to oil consumption and whether or not using MORE oil is the right direction for this country to be headed - not only with regard to pollution but with regard to our dependence on something that we do not control, must pay what others will charge us and have our national security predicated on continued access to oil owned by countries whose interests are not aligned with our interests.

In short, I think folks think this is not a good thing and that "somehow", this must be changed.

I find it ironic (and I'm not alone) that the genius of the USA has always been on our ability to innovate solutions and to benefit from that innovation by marketing higher technology to the world.

With respect to energy, it would seem to be a no-brainer for us to create more efficient technologies that would be attractive to foreign countries to reduce their own expensive consumption of oil and in the process - reducing global warming worldwide.

In other words, much of the USA's power is/should be Leadership and perhaps not so much that we are able to carry the biggest military stick - much less fail the leadership challenges and rely on our military to attempt to make the rest of the world toe the line that benefits us and not them.

I think this is what the people in this country want. They want to see us return to a leadership role by putting our own house in better order by dealing with the oil consumpion issue AND to benefit from it by selling those advanced technologies to the rest of the world.

 
At 7:54 AM, Blogger Ray Hyde said...

I think you are right about the general feeling that people have about gas usage, but maybe not, the poll didn't ask about that directly, just about gas taxes, and what should be done with the money if there was a tax increase.

And yes, Europe and Canada both have slowere economic growth than the U.S., but it is not clear that it is due entirely to gas taxes.

If we really want to change it, then why do so many drive vehicles so out of proportion to the task at hand? Why not drive smaller more efficient vehicles and rent a Flex-SUV when we need one?

I was involved in an alternative energy project at one time, but we got priced out of the market by falling oil prices. The market for oil will shift by itself when the price is high enough to make other methods competititve, whether financially or politically.

 
At 8:47 AM, Blogger Toomanytaxes said...

Economic prosperity requires access to reasonably priced energy. We had this with fossil fuels for many years, but, for whatever reasons, that no longer exists. We may need to ride out higher energy prices to enable the market to find new and, ultimately, lower-cost energy sources.

Raising the gas tax could probably spur more investment in alternative sources of energy, but, at the very same time, would create a hit to the economy. Does anyone know the price elasticity factor for gasoline and whether that factor varies by demography or geography?

I suspect that many of those arguing the alternative energy impacts of a gas tax increase are more interested in building more roads for other purposes than in moving Virginia to alternative forms of energy. Seems more of a smoke screen to me.

 
At 6:07 PM, Blogger Ray Hyde said...

I've got some price elasticity numbers. I'd have to dig them out, but they are pretty high, because there is no real substitute.

Today's Nuclear deal with India was partly designed to relieve THEIR future use of oil, making things easier for us.


Then of course, if they have a Nuclear Bhopal, it will save a lot of oil.

 
At 5:08 AM, Blogger Larry Gross said...

I'm always amazed when I read the reasons that people give for having to drive a solo vehicle at rush hour every day - and often a gas-guzzling SUV.

"I've got kids and I've got to be able to leave work on a moments notice to get back home".

The fact that folks who carpool and vanpool ALSO have kids doesn't seem to affect their reasoning - and, in fact, have heard the solo drivers express the idea that the carpoolers must not "care" as much about their kids. :-)

Nor do they seem to be able to put their arms around the idea that they CHOSE to move 60 miles from where their kids are during the day either! :-)

You can't make people do rational things but plain old economics will and so having folks pay the actual costs that involve them personally will do that much better than having all taxpayers fork over what is necessary to essentially subsidize other folks costly commuting behaviors.

I've never seen a POLL that asks the gas tax/toll question that also asks if they drive 60 miles in a solo vehicle every day at rush hour but I'm betting that the results would be quite revealing.

I'm betting the solo drivers are the ones most opposed to higher gas taxes and tolls.....

It doesn't scare carpoolers.. they make adjustments and keep on truckin....

I know.. I carpooled for 30 years and looked forward to snoozing or reading and that was before laptops were common.

 
At 9:30 PM, Blogger Ray Hyde said...

Larry: I don't understand people who make long commutes in an SUV either, but I don't buy the idea that people choose to commute long distances lightly.

I guess I don't think that people have as many choices as we would like to think. You said you lived in an apartment for years before your first home. I lived on my boat. Was it really a choice? The boat gave me a place to sleep while I was in college, and I worked at the boatyard. It made for a pretty nice date, and you didn't have to ask a girl home with you, so things worked out OK.

But really, it was all I could afford.

Later I sold the boat to make the down payment on my home, and I chose that home close to my job. That worked out OK too. But my wife worked at the other end of the city. We could have made other "choices" but they were all more expensive. Later my company moved, but I was in graduate school, so I was faced with another commute-split. Since the company was paying for school, changing jobs wasn't a choice. Later, I moved closer to where my job was, but then the company folded. Without a job or only a new one, changing homes again wasn't a "choice", so I had to commute, until I landed a telecommuting gig. When that company went under, I rode the train, and finally relocated to a new job close to home.

True enough, at some level people make "choices" but for the most part they make choices based on the options available. You chose an apartment, and they chose to drive, based on the conditions at the time. I was never able to car pool because my job required a car, I might have preferred a nap or reading, too. I'm willing to believe people make the best "choice" available.

I'm sure that many people with long commutes are against a gas tax increase. I'm sure that those who live outside the core area and work mostly by computer are opposed to general taxes for transportation and would prefer targeted taxes. Either way, imputing bad motives based on personal interest is a cheap shot. But people who have gone out and studied this and measured the data conclude that by and large people make rational choices about where they live and how they commute.

There are a lot of things that don't appear to make sense.


http://www.econbrowser.com/archives/2006/02/just_how_implau.html has another thread based on this poll. Some funny stuff there. one quote follows:

"UK experience ($6/gal gas, $3/gal+ taxes) is that it doesn't cause huge changes in behaviour. We drive more fuel efficient cars than you do (an average of about 10 mpg I think) and *far* more diesels (and we have fewer cars per capita). But mileage driven each year keeps creeping up, in line with GDP as does the number of cars per 1000 population. And our oil consumption per head is not so different from our GDP per head (relative to the US). We have c. 50% of the oil/head (in a smaller country with fewer extremes of climate) and about 60%/head the GDP. The big break on driving in the UK is congestion, now the worst in Western Europe. "

Would you really like to live on half the economy and half the gas at twice the price and still have congestion?



Not that cheap shots are always bad:

http://blogfromonhigh.blogspot.com/2006/03/nimby-liberal-style.html

has this post.

"Not in my palatial backyard, buddy.

The news that Ted Kennedy, he of the whacked-out environmentalist left that wants the rest of us to adhere to their dictates and live in caves and drive bicycles to work, is working to block the creation of an alternative source of energy - because it's in his neighborhood - is rich. But true:

Kennedy tries to halt windmills
By Audrey Hudson, The Washington Times"


Maybe everything comes down to NIMBY: all politics is local. What a disgusting thought.

 
At 5:39 AM, Blogger Larry Gross said...

"I guess I don't think that people have as many choices as we would like to think. You said you lived in an apartment for years before your first home. I lived on my boat. Was it really a choice?

But really, it was all I could afford."

Ray - you hit the nail on the head!

Your choices were determined by your own financial interests.

No one owed you or me a subsidy to enhance our own economic condition.

We were and are responsible for the financial consequences of our decisions and that includes having two income-earners.

What folks are doing... is exploiting the system so that they can afford much more house than they really can afford.

No one "owes" us a 2000 square foot house for $100,000 less than it really costs NEAR where you work.

So folks.. make choices... to drive a long ways to get a better, bigger, more expensive house for less money .. by driving much further than they would if they CHOSE to trade shorter commute times for less house.

And it worse than this because when folks chose the higher salary and a longer commute - they make housing more expensive for locals who chose NOT to commute but instead seek local employment.

I'm talking about teachers, deputies, maintenance workers, nurses, etc... who work locally but are being priced out of a house because of long-distance commuters seeking the "sweet spot" of a higher salary and a lower cost home.

What that does... is it forces local workers to then ALSO become long distance commuters to try to get a higher salary so that they can even afford a local home.

Here in Spotsylvania, we have a tremendous shortage of teachers because... local teachers once they get experience BECOME commuters to Prince William, Fairfax, et al....

It's a vicious circle where everyone is trying to maximize their salary and minimize their housing costs .. and the results are in plain sight in front of us - maxed highway systems... that none of us are actually paying the true cost of maintaining and expanding.

I think many people KNOW that this is not sustainable.. that it results in more gasoline useage, higher gasoline prices and pollution at the local, regional, and even worldwide levels but they feel that there is nothing they can personally do to change it since there is no reward in personal action other than to deprive oneself of what everyone else is going to get anyhow.

 
At 1:35 PM, Blogger Ray Hyde said...

"driving much further than they would if they CHOSE to trade shorter commute times for less house."

At some level we make that choice, but frequently the choice is not a choice at all, or only a poor one. The coast trade is highly stacked against moving in because a) in town homes are not just a little more expensive, they are a lot more expensive. b) Price is only part of the issue. If in-town homes had to pay enough to fix in-town schools, the price would really be out of sight. c) There is the perceived likelihood that you or your children may get hit by a stray bullet from an argument over a parking space. d) Cars don't pay their full cost, and homes on the peripehery don't pay their full costs either. Fixing this won't solve all the problem: it will just change the size of the decision circles and the rents and congestion inside the circles.

Considering all that, people may be making rational choices, to the extent they can, which is not much. If that is true, then the idea that we can incentivize people to make (what some consider to be) better choices, is likely to cost far more than we think.

Homes in the city are far from paying their full costs too, otherwise city conditions wouldn't be so bad. If more demand occurs because of gas tax or congestion pricing, rents will go up to offset the demand, and you still won't have fixed the problem.

We have the same problem with teachers in Fauquier: they hire in, get trained, and move on. For a long time, the farm had a modest cottage which was, by tradition, only rented to State Troopers, who have a hard time livingin this area, but is has fallen into disrepair and there are not resources sufficient to fix it. DC is having the same problem with its Cab drivers: they are required to be city residents, but most live in MD or VA, so it is not just the wealthy that want to get out and cause the commuting problem.

I don't see how you can pass legislation that requires you to make choces that are aganst your own economic interests. If you pass it, I don't see how it can work, and you are likely to see new incumbents fairly quickly.

 

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