This misunderstands the proposal, which is to give as an income tax rebate the gas tax revenue that is collected, and to give it in advance of the collection (so as not to penalize those who can ill afford the higher cost of gasoline).

The truth is that the effective cost of the gasoline will be LESS than without the excise tax, for over half of all households. And the households that benefit from this lower effective cost will be those households that are already frugal in their gasoline consumption. It turns out that these are the lower income households, of course, by force of economics. These households will actually WIN from the gas tax + rebate, with an average net gain of over $2,000 per year for those in the lowest 10 percent of income.

Also consider this: the reduction in gasoline demand that will accompany the higher per-gallon cost at the pump will actually reduce the effective price of gasoline even more, so that almost EVERYONE will win. Observe that we are witnessing this now, because of the current recession.

We really are in a tough spot, oil consumption being so critical to our economy and our standard of living. Higher oil prices are coming, whether we want them or not. The whole purpose of the net-positive gas tax is to provide a viable mechanism for meeting the challenge. It is a relatively free-market means of anticipating and adapting to insufficient oil resources, through personal, corporate, and government actions in response to the synthetically higher price of gasoline. The choice is ours: to anticipate and control the transition ourselves, or to relinquish control to OPEC, fund their coffers, and submit to an impoverished standard of living. (and also suffer from tardy and ineffective government attempts to help, through industry directives, driving restrictions, rationing, etc.)

The “no more government” cry is a laudable. I’m with you all the way…. at least in theory.

The problem is we have a surprise coming and it’s coming when the global market (and our unfriendly country oil retailers) say it is. I think if you’re on this web site we’re pretty clear on that so I won’t belabor the point or go into the full ramifications.

What I want to say is this:
If we think our current administration is going to stand idly by with $6++ gas when that happens I think we have another thing coming. The people will cry loud and clear for the government to do something and the government will gladly accept the call for more power. Subsidies, restrictions, speed limits, constraints and standards. You name it, it’s going to be a bungled mess. Doubt it? Look what happened in the 70s. Think we can stop it? Sure we can… just like we stopped the Detroit/Bank/AIG bailout….

So I’m with Dr. Doddington for this reason:
An ounce of prevention is worth a pound of cure.
Give me a little tax and a little bureaucracy now, so I don’t have a lot later on.
I’ll call it an investment.

That’s an interesting interpretation of what I said, but no that’s not what I mean. The rich waste more gas and will continue to do so almost unabated because the tax won’t cost them as high a fraction of their income. And because the poor already waste less and will be obliged to cut back on how much gas they buy, they may be deprived of essential transportation.

“Are we to believe that cancelling income tax (a tax that rewards the dishonest) and/or even sending everyone a check is bureaucratically more complicated than taxpayers spending a couple of days of labor each year declaring their income and deductions, and an IRS that monitors the personal affairs of every citizen?”

It doesn’t involve canceling the income tax, only giving people a rebate. And every transaction or piece of mail sent costs something and requires some effort by the government bureaucracy. It may be a very small knot, but it will still be a knot.

“The first, unavoidable knot the “net zero” solution would require is a bureaucracy to oversee distribution of the “rebate” checks.”
????
Are we to believe that cancelling income tax (a tax that rewards the dishonest) and/or even sending everyone a check is bureaucratically more complicated than taxpayers spending a couple of days of labor each year declaring their income and deductions, and an IRS that monitors the personal affairs of every citizen?

A superb reply, sir.

You can’t make a string longer by cutting a piece off one end and tying it on another; at the very least you lose the string consumed by the knot. The first, unavoidable knot the “net zero” solution would require is a bureaucracy to oversee distribution of the “rebate” checks. The idea isn’t even net zero for any purpose other than expanding government. It would harm all sectors for no good that I can discern.

Good work. Thanks for this clear, logical rebuttal.