Now that we have lived with $3.50-a-gallon gas, $3 seems far less outrageous. That gives us an opportunity to permanently depress demand for gas by locking in higher gas prices with a tax.
Let's put a floor at $3 a gallon. Every penny under $3 that the market price goes should be recaptured in a federal gas tax so that we pay at least $3 at the pump.
Why is this a good idea? Because it's the simplest way to induce conservation. Higher prices will make people alter their buying habits. It was the higher fuel prices of the 1970s and early 1980s that led to more energy-efficient cars and appliances, which so reduced the demand for oil that prices fell through the floor. By 1986, oil was $11 a barrel. Then we got complacent and resumed our old wasteful habits. Now, oil is around $60 a barrel.
The worst part is that much of this $60 goes overseas to foreigners who wish us no good: Saudi princes who subsidize terrorists and the nuclear-hungry, death-to-America Iranian mullahs, for example. This is insanity.
It makes much more sense to reduce consumption, drive the world price down, and let the premium we force ourselves to pay at the pump (which begins the conservation cycle) go to the U.S. Treasury: If the price drops to $2, plow that $1 tax right back into the U.S. economy by reducing other taxes.
The beauty of a higher gas tax is that it would make fuel-efficiency standards unnecessary. Just let the market decide. Consumers are not stupid. Within weeks of Hurricane Katrina, SUV sales were already in decline and hybrids were flying off the lots.
Washington Post columnist
Americans are increasingly concerned about the rising cost and availability of gasoline, a commodity that is so essential to the American way of life. At a time when high prices at the gas pump are hitting consumers across the country in the pocket, the last thing we need is a hike to the federal gas tax.
Though the gas tax is imposed at production, economists generally agree that the cost is essentially passed forward to the retailertranslating into higher gas prices at the pump for people like you and me.
In rural places like my home state of Wyoming, long car trips are often an unavoidable part of daily routinesso much so that raising the cost of gas even a few cents a gallon adds up quickly. This is equally true in metropolitan areas, where daily commutes can mean spending long hours in gridlocked traffic.
The pain at the pump is particularly stinging for America's farmers, who depend on gasoline and diesel fuels to operate equipment. Increasing the gas tax would have a dramatically negative impact on their bottom line, shrinking their already-modest profits and making it more expensive for Americans to buy food.
I refuse to accept high energy prices as America's fate. The ultimate solution to lowering the price at the pump will be to reduce America's dependence on foreign oil. To achieve this, we need energy policies that encourage our ability to domestically produce and refine energy sources. Raising the gas tax isn't an answer to our energy problems.
Congresswoman Barbara Cubin
Republican of Wyoming