http://money.cnn.com/2007/01/16/news...ion=2007011709

Should the Gov't dump CAFE and add say a $1 per gallon fuel tax that could go towards roads, mass transit, and clean energy projects? That seems to be the only fair way to create demand for more fuel efficient cars.

 

My only problem with what you are saying is that I do not truely believe that a $1 tax per gallon would go towards roads, mass transit and clean energy. The Government would just keep the cash and use it for other stupid things. Crappy roads are here to stay.

 

That's an interesting question. I don't even think it would take $1 a gallon. I currently work in the transit industry and previously worked as a highway engineer. I've been to several conferences where gas taxation has been a topic for discussion. Based upon my understanding, all it would take is 25-50¢ a gallon to accomplish this.

Where the problem lies is the gas companies' abilty to set the market price based upon demand. Currently oil prices have dropped, while gas prices remain high. Yet the minute OPEC raises crude prices, gas prices are adjusted before the high priced crude even get to the refinery. In order for a federal gas tax to work, local states need to standardize their gas taxes, and the government needs to regulate the manufacturers so that pricing is more stable and fairer throughout the country. Example, here in the San Francisco Bay Area we pay some of the highest gas prices in the state. In Oakland today I saw a Chevron station charging 2.94/gal for regular unleaded, while accross the street the Valero dealer was charging only 2.64/gal. There's a Chevron refinery less than 10 miles away, and the nearest Valero refinery is about another 8 miles further than that. IMHO, You need to fix the pricing problem before you can change the tax structure.

 

I agree.

Like most (not some, but Most) other Gov't projects, it would be a poorly executed good idea.
edit: oops, voted wrong

 

I think we should dump CAFE becuase I don't understand the logic behind it. I understand it is to make vehciles get better mileage. But does it really make sense to hurt the companies who sell lots of big cars since that is obviously what the population wants to buy? Why not put the cost of mileage on the end consumer, as this gas tax would do? That way companies aren't forced to produce profit loosing small cars to offset the larger ones, since the only way people buy the small cars is at super low prices. Then maybe companies who make more money on larger vehicles could be more profitable than those who primaily make smaller ones, Ford vs Honda.

 

CAFE shouldn't be neccessary, car companies should make vehicles to get the best milage and peformance that their current technology allows. It's an investment.
Gas prices do more than CAFE to demand better milage vehicles.
One of the biggest reason Japanese cars really took off in the '80's. Reluctance to invest in improving gas milage hurt the domestic auto industry then, and it's taken years to regain the consumer's confidence.

 

There's already a federal gasoline tax that goes to pay for that stuff. Its about 20 cents/gal I think.

I say dump Cafe and leave the tax where it is. When gas prices get high enough that folks quit buying guzzlers, that's your incentive to build smaller more fuel efficient cars.

CAFE didn't stop Hummer sales, but $3.30/gal gas sure did. The Govt needs to get out of the middle of the car business and let the market take care of itself.

 

If you are talking about the federal tax, it has historically gone entirely to roads and transit.

State gas taxes, on the other hand, tend to get siphoned off to all kinds of other things.

 

The only way to reduce consumption is to raise prices. It's worked every time. Fuel prices got up to over $3 per gallon, and what happened? Large vehicle sales got soft, economy car sales increased, manufacturers accelerated investment back into cars and crossovers instead of throwing vaults full of money at large trucks, and keeping new competitive cars on the slow track to development.


I do find it absolutely amazing, and flabberghasted that when oil companies jack prices by 1.50 to $2 per gallon, where the money is going into someone's pockets via bonuses, stockholder dividents, or bigger executive wages, you don't hear a peep out of anyone.

Yet the mere idea that the government raises taxes on gas just $1, anti-tax people come out of the woodwork complete with horror stories of the government taking the money and spending it on some wasteful pork item.

So.......
it's perfectly OK to jack prices up so a few can get richer (look up the profit levels of the last couple of years of high fuel prices.... it wasn't OPEC this time), yet the idea that 10 cents of that dollar might go towards something that might be considered waste, why that's insane! Even the idea that the bulk of that might go towards something else other than highways is unexceptable.

One place the money might go: http://costofwar.com/index.html


Look, CAFE is a joke. If forces companies to attempt to manupulate the market, which doesn't work. Fuel standards for different classes of vehicles makes more sense, but still doesn't influence buying habits. Alternative fuels and alternative powerplants won't make sense until the value of them is comparable to the traditional gasoline and diesel powered vehicles.

I'd rather see 80 cents of an additional tax go towards something worthwhile than to see periods where I'm helping to finance someone's kids & grand kids private school, Ivy league college, and summer homes and mansions for the whole family. Next to that, I think I can live with 10 or 20 cents going to some pork project going to one of you guy's area that does me no good.

 

I still like the piece that Lutz wrote, or commented on. Anyway, there was a legitimate report that was done on Global Warming and harmful gas entering our ozone layer.

The study found out that the most threatening "gas" comes from well...the human rear end.

The Lutz quote was funny, unfortunately I can't remember it nor find it!

 

Gas doesn't need to be taxed anymore, it doesn't need any help being expensive.

 

CAFE must die.

As for ADDING a new fuel tax, that would have to be studied very closely. "Adding a tax and letting the market decide" is not the only option. The market WILL decide, with or without a new tax...

But CAFE is wrongheaded. It simply makes the politicians look like they are doing something without actually asking the PUBLIC to take responsibility...

 

Really? For the last two years you never heard a peep out of anyone bitching about high gas prices?

While it's true that companies such as ExxonMobil had record profits during this time, their profit margins were by no means outlandish. Lots of companies had far higher profit margins, but because their raw numbers simply weren't as big as ExxonMobil's, they didn't warrant the sensational headlines.

And if you own any mutual funds at all, guess what, you are almost certainly one of the shareholders benefiting from high oil prices. Do you not expect a reasonable return on your investment portfolio? I sure do.

I've long been an advocate of higher gasoline taxes as a means of promoting conservation. It definitely works Canada, where our best selling car for years has been the Civic, and the Cavalier for years before that. It also works in Europe and Japan. The best way to influence any market is to target the demand side (e.g. taxes) not the supply side (e.g. CAFE).

The only downfall, as noted above, is that gas taxes end up as politicians' slush money to fund their pet projects. In Canada the total amount of money raised by the governments on gas taxes, licenses, etc. far exceeds what is put back into our transportation infrastructure. But if the primary purpose of a gas tax policy is to reduce consumption, then the (mis)use of the tax windfall is only a secondary consideration.

 

X 2.

 

I'd be happy to trade CAFE for additional consumption tax. That way we could use the money to fund silly-*** wars.