Higher gas prices and lower income tax
By browsing through the RSS feed of the Oil Drum I came across an interesting article on how increasing gas prices and lowering income tax in the meantime could bring huge benefits.
This is not new to me as I have already discussed this very topic in my review of Le Plein s’il vous plaît [Fr], a brilliant book written in 2006 by Jean-Marc Jancovici, which shares the same views.
Nonetheless, such an idea would be perfect to enable our civilizations to become less dependent on the polluting energy sources that are fossil fuels.
Here is an extract of the article:
I think most can agree that in the U.S., a lot of gasoline usage is discretionary. We don’t treat our fossil fuel endowment as something that our children and grandchildren might need.
We seem to be content to burn through it and keep our fingers crossed that there is a solution right around the corner for future generations. This is exactly the sort of “spend now, pay later” mentality that has gotten us into such a financial mess.
But what if you knew that there was a solution just around the corner for our fossil fuel dependence? What if you knew that unless we scale back consumption, your children and grandchildren will have to make far greater sacrifices?
I think I speak for most parents when I say that I am willing to voluntarily sacrifice if it enhances the odds that my kids will have a brighter future.
This forms the basis of my support for higher gasoline taxes. In my opinion, a small sacrifice today will stretch our fossil fuel endowment and buy more time for sustainable alternatives to emerge.
The advantages of having a higher gasoline tax, or more generally a fossil fuel tax, would be many in my opinion. They include:
• It would lead to conservation, which would help preserve our remaining fossil fuel endowment.
• It would encourage mass transit (people flocked to mass transit this year as prices climbed).
• It would make alternative energy candidates more competitive with fossil fuels, without picking specific technology winners.
• It would enable people to do a better job of planning ahead, as opposed to the constant expectation that low gas prices are right around the corner.
• It should encourage more efficient city planning, and rein in some of the suburban sprawl.
• It would make the price of fossil fuels more reflective of the negative externalities that are not currently priced in (air pollution, military expenditures, etc.).
• It would penalize alternative energy sources with low energy returns, and reward those processes that minimize fossil fuel inputs.
I am for such solutions. What about you ? To make up your mind, you can check out the full article which provides an overview of the main drawbacks as well as a discussion.