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New oil deal would tax gas at the pump
A gas pump display shows gasoline prices in New York.
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TEXT OF STORY
Bill Radke: Three senators -- Democrat John Kerry, Independent Joe Lieberman, and Republican Lindsey Graham -- are about to introduce a major piece of climate change legislation. Marketplace's Alisa Roth reports the measure may include a sweetheart deal for Big Oil.
Alisa Roth: The three senators aren't ready to talk specifics yet. But it looks like the bill could let oil companies off the hook for carbon emissions. And instead, gas would be taxed, and we'd pay for it at the pump.
Tom Kloza is chief oil analyst at the Oil Price Information Service. He says oil companies and their home states would obviously love this. But:
Tom Kloza: The problem is, is that, politically, raising a tax on anything these days, particularly gasoline, is probably a very, very difficult task.
Kloza and others say it doesn't matter if oil companies pay directly for their carbon emissions. They'd just pass the cost onto us anyway.
Sander Cohan is at ESAI, an energy consulting firm:
Sander Cohan: A fee at the pump really is much more transparent. This translates directly through to an ultimate gasoline price.
It's too soon to talk about the mechanics of such a tax, but it would probably be pegged to the price of carbon on the open market. Which means it could fluctuate.
I'm Alisa Roth for Marketplace.
We don't need a new tax to on the economy to encourage us to use less gas / produce less carbon. Just take existing taxes that support oil and move them to the pump.
We already pay taxes out the federal income tax and business taxes to make sure we get our gas. These are the taxes that pay for navy aircraft carrier task groups to patrol mideast oil shipping lanes, troops and bases in support of mideast oil exporting countries and guarding pipelines, and foreign aid to oil countries, and wars in the mideast, export subsidies to oilfield equipment exporters. Even if most of the oil we use comes from Canada and central / south America, we still are involved in the mideast because if we were not there, the world price of oil would go way up.
If we moved the taxes that support those activities out of the income / business taxes, and moved them to the pump, it would do several good things. First and foremost, the goal of reducing gas usage could be done with NO NEW TAXES! It would give people and business a federal income tax cut. It would give us better visibility of what we are actually paying for gas. It would encourage us to use less gas and produce less carbon. And last but not least, when the Hummer in the garage gets old and it's time for a new car, you could get yourself a tax break by buying a car that gets great gas mileage.
All these benefits without raising taxes. Is this cool or what?
