[helene_t]

Thats not the issue, Jimmy. Nobody is arguing that overall tax pressure should increase. At least not in this thread. (Yeah, I know you think this carbon tax is just an excuse for raising the tax pressure....)

If there is a fear of a recession it probably won't be a good idea to tighten the fiscal regime right now. OTOH some say the US deficit is unsustainable. What do I know. But that's for another thread.

[hrothgar]

luke warm, on Nov 12 2008, 02:05 PM, said:

do those of you who support raising taxes (or implementing new taxes) think it would be even slightly idiotic right now?

The government should commit to phasing in a carbon tax starting in five to eight years and finishing 10-15 years out. (Said so much in an earlier post)

I think that this would have a significant positive impact on short term economic growth without requiring any government spending.

[P_Marlowe]

luke warm, on Nov 12 2008, 06:05 AM, said:

do those of you who support raising taxes (or implementing new taxes) think it would be even slightly idiotic right now?

Nobody sane likes it, if taxes rise, and if you raise taxes now, it
certainly wont ease the burden of the current recession.

But of course if you dont do it, you have to pay a price as
well, and basically the world and the US currently pay the
price for the boom which took place in the last couple of days.

Recently I have read about Paul Volker.
http://en.wikipedia....ki/Paul_Volcker

The article says, he ended a crisis, which lead the foundation of
the growth later, but his meansures started a recession (which
led to high unemployment).
So the short term was bad, the long term was good.

So take your pick, but be aware that decreasing taxes or not
increasing will increase the depth, and the depth is already at a
record level, and you have to pay for the depth as well.

With kind regards
Marlowe

PS: The biggest part of the German household is social / welfare,
but after that, at 2nd place comes already the payment for credits,
it was 2-3 years ago (just a side comment, seldom mentioned), ...
one would have lots of money, if one would get rid of this part.

Maybe you should look at the US household and look how many
money gets spend on payments for dept.

[FrancesHinden]

Al_U_Card, on Nov 11 2008, 10:34 PM, said:

I like the idea of "feebates".

The SUV buyer pays X+y% for his registration while the hybrid owner pay X-y% for his. Revenue neutral, makes the guilty pay.

Ideally we can get the slowpokes in the auto industry to design something other than hatchbacks and tailfins.....

I don't know if it's the right idea or not, but in the UK vehicle tax (annual payment to the Government to be allowed to run a car) costs more or less depending on the carbon efficiency of your car.

http://www.direct.gov.uk/en/Motoring/Ownin...cle/DG_10012524

Also, if you have a company car, the amount of tax you have to pay on the benefit depends on its carbon emissions.

[pclayton]

OK fair enough. I won't continue to argue against basic chemistry.

I've just always thought of 'gas taxes' as inequitable, because some users go further (thus using the infrastructure more) than others. Obviously there is a fundamental difference between a gas tax and a carbon-based tax.

[helene_t]

pclayton, on Nov 12 2008, 04:41 PM, said:

OK fair enough. I won't continue to argue against basic chemistry.

I've just always thought of 'gas taxes' as inequitable, because some users go further (thus using the infrastructure more) than others. Obviously there is a fundamental difference between a gas tax and a carbon-based tax.

That's right, it is much more tricky if the purpose of the tax is to finance infrastructure.

Still, if the alternatives are fuel tax and income tax, I suppose fuel usage is better than income as a proxy for road usage.

[bid_em_up]

kenberg, on Nov 10 2008, 09:03 PM, said:

OK, today I filled the tank with Sunoco regular for $1.87 a gallon. Gas price swings are making the Dow look stable. by comparison. Questions:

The obvious first question, only partly facetious: Will falling prices at the pump lead to a bail out for large oil companies? "Our profits have fallen from truly obscene to merely grotesque, oh,  the pain, the pain..."

Unlikely, imo.

Quote

More serious (I hope): Can anyone actually explain this? Yes I have heard of the Law of Supply and Demand, but is that the whole story? I haven't been driving that much less. Neither has anyone I know. The housing and  mortgage mess was partly from supply and demand, partly from some people screwing around. What's up with gas?

Try reading some information on the trading of commodity futures. From what I have seen, the huge run-up in the price of oil, had more to do with speculators trading futures than it did any actual supply/demand issues. The supply & demand issue is what has brought oil prices back to more "normal" levels (along with the speculators facing margin calls due to falling prices.)

Quote

Final question: Is it not time, and way past time, for a substantial increase in the tax on gas?

Not only no, but hell no.

Quote

Your essays on this subject will be graded and promptly returned. Two misspellings will lead to an automatic F.

Dear Professor,

Please excuse any misspellings I may have. I recently had cataract surgery in one eye, and cannot see a dang thing with or without my glasses at the moment.

Thanks.

[bid_em_up]

pclayton, on Nov 11 2008, 08:41 AM, said:

Nice idea. Also impossible to implement.

When I go to the gas station, do they ask me what kind of car I drive so that I get taxed accordingly? I would challenge: "the amount that gets emitted is roughly proportionate to the gas used".

If you are trying to impose the tax at the time of the vehicle registration, thats tough too, since you have the problem of determining how many miles I drive.

Even then, people that drive in Los Angeles and Seattle emit a lot more CO2 per mile, since the cars are sitting idling in traffic compared to someone that drives in Billings or Lubbock.

Phil,

It is not totally impossible to implement. Difficult, maybe, but not impossible.

A GPS system or something like OnStar could calculate and transmit the amount of mileage driven each month, and then you could be "taxed" or charged for the number of miles driven.

There is some talk in the state of North Carolina to moving towards exactly this type of tax/fee structure and eliminating the gas tax altogether. I think it's a bad idea, but I would not be surprised to see something like this implemented in the next 10 years.

[cherdano]

I guess it needs to be said once more: as far as driving is concerned, a carbon tax is just a gas tax. (Ok, maybe it will be charged earlier in the supply chain as a tax on the oil sale, but that doesn't really make a big difference.)
A carbon tax is just a tax on commodities such as coal, oil, natural gas, with the rate of the tax being proportional to the amount of CO2 they produce when burnt.

[luke warm]

ok, let's say a carbon tax is implemented... richard (if i read him correctly) thinks this would result in a net benefit to the economy... i'm having trouble seeing how... what would happen to all goods and services if such a tax was implemented? i assume the 18 wheelers would take a big hit, right?

[kenberg]

I always expected the price of gas to come down from its extreme heights, just as I thought that there would be a drop in housing prices. In both cases I was stunned by the size of the drop and I guess I was not the only one. The difference I see between the two is that I expect housing prices to sooner or later resume their normal modest growth patterns while I expect that in the not too distant future oil will be substantially more expensive than it is today.


It seems to me that this might well be an instance when responsible environmental behavior and rational self-interest are at least somewhat aligned. Keeping the growth of petroleum usage down would obviously be good for the planet, and no one is happy with our increasing dependence on foreign supply. So the question becomes: How to do it. I realize there are various problems with taxation. The burden can fall unevenly, the tax will be passed through to consumers on basic items such as food, there could be a choking of economic growth, and so on. Still, somehow we have to get a handle on this consumption, do we not?


When I was young I (of course) wanted a convertible. I bought the 47 Plymouth coupe I could afford. I now drive a Honda Accord. Not a Mustang, not a Prius. We make these decisions, at least partly, by considering the economics. It seems to me that we can tilt the choices towards fuel economy by the tax we place on oil consumption (carbon tax or at the pump is a choice I will leave to those who know more about this). The polar bears might thank us, and we might do ourselves some good as well.

[awm]

Perhaps the point is that taxation should be targeted. In the current tough economic times, we want to try to stimulate the economy, create jobs, and help those who have been hit the worst by the crisis. At the same time, there are some who seem to have benefitted from the current crisis and who are already making record amounts of money without contributing much back into the economy. It makes sense to ask that these folks pay a bit more in taxes in order to help cover the costs of creating jobs etc. because they can afford it and because in the long run huge government budget deficits are not particularly a good thing.

So the idea is to push the clean energy sector to create new jobs. This will be done by direct government investment, cutting taxes for companies producing clean energy, and so forth. But all this costs money. In order to fund it (and in the process create further incentives for clean energy) the idea is to raise taxes on oil companies (making record profits) and other companies or individuals who produce a lot of pollution.

Similarly, we need to put some money into retraining laid-off workers so they can find new jobs and contribute to the economy again. Of course, this also costs money. But corporate CEOs have seen their compensation rise to record levels (both on an absolute scale and relative to the average income) even while many companies have been performing very poorly. The wealth is not "trickling down" from these folks to everyone else -- many of the products they purchase are not produced in the US anyway, and they have far too much wealth to really spend it efficiently in any case. It seems fair to ask that they pay a small percentage of their record compensation in order to help fund the retraining of workers who, in many cases, were laid off because of the short-sighted business policies of the very same CEOs.

So while a general tax hike would be a bad idea in this economic climate, increasing taxes on some of the worst offenders (big polluters, overcompensated CEOs, etc) will actually help to reign in some of the problems while providing funding for some of the needed initiatives to actually help the economy improve. Note that what actually pulled the USA out of the great depression was the second world war, which involved some of the highest marginal tax rates (on the biggest earners) in the country's history. So it's not the case that "raising taxes in a recession is always a bad idea" -- it's more an issue of being careful who we raise taxes on and how the money is spent.

[cherdano]

luke warm, on Nov 12 2008, 12:05 PM, said:

ok, let's say a carbon tax is implemented... richard (if i read him correctly) thinks this would result in a net benefit to the economy... i'm having trouble seeing how... what would happen to all goods and services if such a tax was implemented? i assume the 18 wheelers would take a big hit, right?

As an example (this has been done in Germany), let's assume that the carbon tax is used to subsidize employer's share of employer-covered health care costs. This would mean companies would try to reduce their carbon production, but they would be more willing to hire, since the health care costs associated to hires is lower.
So more would be spent on wages, and less on "sending money to countries that don't like us very much". The new employees are more likely to use that money to buy American goods than oil barons in the Middle East. (I think this is how McCain would try to sell a carbon tax.)

This only works well though when there is a clear long-term commitment to increasing the carbon tax, so that companies know that investments into reduction of energy consumption will pay off (instead of becoming worthless once the Republicans regain control of the government).

[mike777]

cherdano, on Nov 12 2008, 12:17 PM, said:

I guess it needs to be said once more: as far as driving is concerned, a carbon tax is just a gas tax. (Ok, maybe it will be charged earlier in the supply chain as a tax on the oil sale, but that doesn't really make a big difference.)
A carbon tax is just a tax on commodities such as coal, oil, natural gas, with the rate of the tax being proportional to the amount of CO2 they produce when burnt.

Interesting discussion on carbon tax.


I am still unclear on how it works. Reading some posts it seems people are saying the tax is all along the supply chain, others seem to say it is at the very beginning when the carbon is mined. Also I assume you can burn or capture carbon in many different ways which would release different levels of co2 into the atmosphere. It seems you would need a vast bureaucracy to enforce, collect and measure all of these different levels. It seems there would be vast waste and corruption.

Again any misunderstanding may just be on my part but look forward to reading more about this issue in the forum. Again my concern are jobs lost or hurting overall GDP growth.

"True but irrelevant. If you want to tax CO2 emission, you just raise the taxes on coal, gasoline, diesel etc. according to their carbon content:

Helene, here you seem to say the tax is basically when it is taken out of the ground and based on it's carbon content, not on who can burn it with less CO2 emissions into the air. AGain I assume that the same pound of coal or a barrel of oil does not always release the same CO2 emission. In other words how you burn it or chemically treat it matters.

edit:
"The emission is the same in all cases so there is no reason the government would care."

Here you say the emission is the same in all cases, but is that correct? I assume there is a way to limit or change, capture, recycle the emissions.

[awm]

I recently bought a new car.

I was interested in purchasing a hybrid. The Toyota Prius is basically impossible to get (you have to wait for at least six months on back order) and I've driven one of those before and found many things I don't like about it (poor rear visibility the most significant). So I went to my local Honda dealer and test-drove a Civic Hybrid. Nice car.

But then I sat down with the dealer to work out how much it would cost. Basically, owning a hybrid would cost me $8000-$10000 more than buying a non-hybrid Civic over the lifetime of the vehicle. And most of this cost was up front (i.e. the hybrid just cost about 10K more, and while I make up some of that in reduced gas prices -- and I was assuming $5/gallon gas -- there are also increased maintenance costs for replacing the expensive hybrid battery a few years out).

So basically... I wanted a hybrid... I was willing to pay a couple thousand dollars more to get a hybrid... but the premium was just too high for it to make economic sense. A combination of increased gas tax, increased price of non-hybrid cards, and tax breaks for purchasing a hybrid could easily have convinced me to go the other way.

If the government's policy is really to try to reduce our dependence on oil, shouldn't these incentives and disincentives exist?

[Al_U_Card]

Once you get the oil lobby out of the way, they will.

[mike777]

"So basically... I wanted a hybrid... I was willing to pay a couple thousand dollars more to get a hybrid... but the premium was just too high for it to make economic sense. A combination of increased gas tax, increased price of non-hybrid cards, and tax breaks for purchasing a hybrid could easily have convinced me to go the other way."

This is what concerns me since here AWM has a third option, which is to buy nothing and keep his old car, or a fourth option, import a car from overseas.

Granted this is a bit hard if we are talking about cars, but think about buying insurance, or a service or toys or textiles. If one can buy the product much cheaper from a company that does not pay the carbon tax this can cost American jobs. Just think about all the things one can buy over the internet and have shipped to you from outside the USA. The other option being to just not buy something which also causes job loss.

AGain bottom line the customer ends up paying the carbon tax just as a customer pays all taxes that a corporation pays. If the customer is not willing to pay it the company goes out of business and pays no taxes.

[Al_U_Card]

All the more reason for agreements like Kyoto etc. Everyone has to get on board or its a no go.

We couldn't compete with Chinese products as they didn't have compliance issues like we did. But, we don't have melamine poisoning (listeriosis, yes.... )

A level playing field can only be brought about by international cooperation and a concensus approach. We have to giddy-up.

[Lobowolf]

awm, on Nov 12 2008, 03:01 PM, said:

I recently bought a new car.

I was interested in purchasing a hybrid. The Toyota Prius is basically impossible to get (you have to wait for at least six months on back order) and I've driven one of those before and found many things I don't like about it (poor rear visibility the most significant). So I went to my local Honda dealer and test-drove a Civic Hybrid. Nice car.

But then I sat down with the dealer to work out how much it would cost. Basically, owning a hybrid would cost me $8000-$10000 more than buying a non-hybrid Civic over the lifetime of the vehicle. And most of this cost was up front (i.e. the hybrid just cost about 10K more, and while I make up some of that in reduced gas prices -- and I was assuming $5/gallon gas -- there are also increased maintenance costs for replacing the expensive hybrid battery a few years out).

So basically... I wanted a hybrid... I was willing to pay a couple thousand dollars more to get a hybrid... but the premium was just too high for it to make economic sense. A combination of increased gas tax, increased price of non-hybrid cards, and tax breaks for purchasing a hybrid could easily have convinced me to go the other way.

If the government's policy is really to try to reduce our dependence on oil, shouldn't these incentives and disincentives exist?

http://www.kiplinger.com/columns/car/archi...08/car0904.html


This month's Kiplinger's has a "Best Of" column, which I believe includes a hybrid recommendation, focused on the "How fast will it pay for itself?" angle, among other things. It's a good article in general regarding many of the other "Best Ofs" also.

[JoAnneM]

I judge the economy and gas prices by how many cars are using the "park and ride" lot down at the corner and their owners taking the commuter bus into Sacramento (45 miles). Right now gas is down to $2.19 and the cars are only parked about one block outside of the lot. When it was $4.50 they were parked at least three blocks around the lot.

I think that many riders decided they like taking the bus, especially since the capitol area and downtown is in such a concentrated space, who needs a car there.