Many international commentators have been pointing out that the United States finances its enemies. Our gluttonous consumption of oil pours money into the coffers of Saudi Arabia to support madrassas, Iran to support Hezbollah and a variety of terrorist groups; we give money via oil to Venezuela to support Castro’s tyranny and fund other anti-Americans and oil money goes to Russia to allow her to be defiant about the whole Middle East.
The are many proposals to wean Americans...
The are many proposals to wean Americans from our oil consumption problem. Most of our oil problem unfortunately traces to transportation which is in the hands of consumers/voters. Moreover, higher gasoline prices do not have an immediate effect on reducing oil consumption. But higher gasoline prices do have an effect on consumption over several years as drivers switch to more fuel efficient cars, change transport modes and as an incentive to bring alternative fuel sources on line.
I propose here, (and have in the past) a ratchet tax on retail non-farm non-airline gasoline. A ratchet tax is based on the highest price gasoline reaches in any one week. When the gasoline price falls the retail price is kept the same, with the difference collected as a tax.
Today, my local Chevron was selling 87 octane gasoline at a high $3.40. If the price of gasoline at retail fell to say $3.00 the ratchet tax would be applied and would be $.40. So the price I pay at my local Chevron would still be $3.40 per gallon. As the price of gasoline continued to fall, the price to me would remain the same and the tax would keep getting larger. When the price in the future exceeded $3.40 the ratchet would go up. If the new gas price including the old ratchet tax went to $4.40 and dropped back I would be paying $4.40 from there on and the ratchet tax would be $1.40. There should be some upper limit, such as the ratchet tax never being more than 60% of the price.
I note that we have state lotteries all over America, a country that long has had a strong lobby against gambling and ferocious antagonism toward legal gambling. We have lotteries because most of the lottery money goes to an apple pie cause (education).
I abhor designated taxes but the ratchet tax could become viable it the revenues were dedicated to Medicare and general health care.
Whatcha think? Ridiculous? That may be a good response since many viable policy ideas start out as ridiculous.