Is EJ's $300 Oil via Tariffs Politically Realistic? Another Idea...

[jimmygu3]

I agree with EJ that keeping oil prices high (and predictable) would help alternative energy thrive. What I don't see is how the idea of "raising taxes" on something everybody uses is going to make it through the political process. Perhaps when I receive my eagerly anticipated Harper's, the realistic implementation of the $300 oil plan will be more clearly explained. :)

It got me thinking about an idea I have been kicking around for years: Give all the proceeds from a federal oil tax directly back to American taxpayers. My original idea was a flat $2 or $3 per gallon tax, but EJ's tariff-manipulated oil price might be even better as it affects all petroleum products and provides a price ceiling.

Assume that the price of a barrel is pegged at $150, with the market price hovering around $100. With the US consuming about 7 billion barrels per year, that amounts to about $350b a year in tax revenue. Of course, everyone's expenses are going to go up. Gasoline, diesel, heating oil and other petro products would go up about 50% due to the tax. Also, prices of goods and services would increase due to added transportation costs.

To offset these added costs to Americans, I would propose that we give the entire $350b back in direct payment or tax credit: about $1200 for each man, woman and child in America. A family of 4 would get almost $5000. A family who chooses to use alternative energy, avoids long commutes, drives a more fuel efficient car, makes their home more energy efficient, uses public transportation, etc., will come out ahead. And it's a free country, so you can choose to pay $5 a gallon to drive your gas guzzling SUV 30 miles each way to work from your McMansion in the burbs, but your family's $5000 check isn't gonna fully subsidize that lifestyle.

I think opposition to this type of plan would come from businesses that would see increased costs but receive none of the refund. But they will simply have to roll the added expense into prices. Locally grown and manufactured goods will become more favorably priced. Quality public transit will be demanded. Alternative energy investments like solar and wind will become much more economically viable.

What do other iTulipers think about this sort of plan?

[Tulpen]

"What do other iTulipers think about this sort of plan?"

Tinkering with the free market economy.

[metalman]

"What do other iTulipers think about this sort of plan?"

Tinkering with the free market economy.

what free market economy? it's only "free" if your industry's lobby can get its mitts (ha ha) on your tax money or print a bailout at the fed. 1st you have to understand that fire economy interests have been running the economy for 30 years. then you have to get over the idea that ANY economy is "free"... someone is always going to run it. attempt to leave it to "market forces" all you're doing is handing your economy over to wall street... so far has not worked out so well.

finally you have to get your head around the idea that if your trade partners are going to charge consumers $50,000 for a car that costs $25,000 in the usa you'd better defend yourself. and why borrow money from oil producers to buy oil from them so they take the surplus and use it to invest in their economy? why not keep the money here, invest here?

[jimmygu3]

"What do other iTulipers think about this sort of plan?"

Tinkering with the free market economy.

I suppose you think that is inherently a bad thing. Other examples of 'tinkering with the free market' include antitrust legislation, child labor laws, Clean Water Act, car safety, emissions, and fuel economy regulations....

[Tulpen]

I suppose you think that is inherently a bad thing. Other examples of 'tinkering with the free market' include antitrust legislation, child labor laws, Clean Water Act, car safety, emissions, and fuel economy regulations....
On second thought it is not just tinkering with the free market economy but blatant socialism.
Taxing goods and equally distributing the proceeds back to the people.

More taxes so the good government can make this world a better place. :rolleyes:

[Jim Nickerson]

"What do other iTulipers think about this sort of plan?"

Tinkering with the free market economy.


China tinkers, and which country looks as if it is doing better right now?

[jimmygu3]

On second thought it is not just tinkering with the free market economy but blatant socialism.
Taxing goods and equally distributing the proceeds back to the people.

More taxes so the good government can make this world a better place. :rolleyes:

By that logic, any tax is socialism. Under this plan, the government would not keep one red cent- it would all go directly back to citizens to spend or save as they see fit.

Do you think the Superbowl would have been better if there were no referees? Or rules, for that matter? Why not let the players and coaches sort it out? ;)

[Tulpen]

China tinkers, and which country looks as if it is doing better right now?
The Chinese economy if much more free than the US economy. It is not for nothing called the wild east.

If you want to start a coffee shop in the US you need a toilet the size of an appartment in Hong Kong.

If we would get rid of ridicilously high minimum wages, absurd regulations such as affirmative action, quotas, mandatory health insurances and other "entitlements" we would be able to actually compete with the rest of the world.

[Lukester]

On second thought it is not just tinkering with the free market economy but blatant socialism.

Tulpen - there are some excellent authors commenting on the idea that good old 'free market economics' can alone be a sufficient response to resource depletion. We should ask Rajiv for a couple of references on this. You are mixing paradigms. Free market economics applies in 'normal' times, but is inappropriate for emergencies, most definitely for global emergencies.

If you remove the ready supply of fuel to run a global economy from the equation, and no appropriate alternative fuel has been even discovered, let alone provided in the meantime, letting the "free market" run it's course is arguably the worst methodology, as it invites uncontrolled and chaotic disintegration of industry if the problem worsens continually without any resolution.

In 'end-game' type situations (no alternative fuel yet exists, or can be deployed remotely to sufficient scale to act as a shock absorber), the free market principles that work extremely well in a world of unlimited energy supplies are a woefully inadequate tool to address forward planning.

That 'free market' is not a panacea which magically can resolve all circumstances. The Marshall Plan for Europe was not 'free market'. Kennedy's space race was not 'free market', the crash development of nuclear fission was not 'free market'. There is an insight hidden away in there as to what's required in dire emergencies to get the job done, and ensure it's precisely steered to the required conclusion.

[jimmygu3]

That 'free market' is not a panacea which magically can resolve all circumstances. The Marshall Plan for Europe was not 'free market'. Kennedy's space race was not 'free market', the crash development of nuclear fission was not 'free market'. There is an insight hidden away in there as to what's required in dire emergencies to get the job done, and ensure it's precisely steered to the required conclusion.

See, I was trying to think up good some shit like that. Thanks, Lukester!

[jimmygu3]

The Chinese economy if much more free than the US economy. It is not for nothing called the wild east.

If you want to start a coffee shop in the US you need a toilet the size of an appartment in Hong Kong.

If we would get rid of ridicilously high minimum wages, absurd regulations such as affirmative action, quotas, mandatory health insurances and other "entitlements" we would be able to actually compete with the rest of the world.

Hell, is slavery off the table? ;)

[Lukester]

JimmyGu3 -

I think Tulpen must be a hard-ass libertarian. :rolleyes: Can't say he doesn't have a lot of comrade libertarians around here either. What are you gonna do with these guys? They're a freaking army! Heck, with all the crap we are being force-fed by the FED these days these libertarian guys are on a roll, and they know it.

All power to you Tulpen. The libertarians will eventually administer some bitter medecine to us all - like it or not. There are an overwhelming number of good ideas within that movement. I just don't think when it comes to the 'oil question' that it will be business as usual.