Saturday, January 27, 2007

Paul Mulshine signs up

Columnist Paul Mulshine joins the Pigou Club:

George W. Bush says his energy plan will reduce gasoline consumption by 20 percent over the next 10 years. Jerry Taylor says it won't. And it's all because of the dolt in the F-150.

Taylor is an expert on energy with the free-market Cato Institute. The dolt in the F-150 is a constituent of U.S. Rep. Jack Kingston, a Republican from Georgia.

Not too long ago, Kingston appeared at an event to tout a bill of his designed to reduce oil imports. The bill was very similar to the proposal Bush introduced in his State of the Union address Tuesday night. Kingston's spiel was loaded with all the Beltway buzzwords that Bush likes to employ: "flex-fuel" vehicles, ethanol,"alternative energy" and so on. If only we could employ enough of this groovy new technology, Kingston argued, we could be energy-independent by 2015.

That sounded nice. But the congressman went on to bring up the sad tale of a constituent who complained that he was going broke pumping gas into the Ford F-150 pickup he drives on his daily commute of 75 miles each way. The feds have to find a way to help guys like this with their gas bills, Kingston said.

No, they don't, says Taylor. Cutting the price of gas would encourage more gas consumption, not less. If this guy wants to save money on gas, he should buy a more fuel-efficient car or move closer to work....

In case you're wondering what most economists suggest as the No. 1 solution to cutting oil imports, that's simple: Hike the hell out of the gas tax. The higher you raise it, the less gas people use. Simple.

Taylor doesn't support that option, but I do. Another of Bush's fanciful promises the other night was a promise to balance the budget. But he won't cut spending. So the Democrats are already insisting on raising the income tax.

But let us consider that in light of the aforementioned dolt. Raising the income tax would have little effect on him since, being a dolt, he probably doesn't make all that much money. It's us smart people in New Jersey who would suffer the most from an income tax hike.

Raising the gas tax, however, would require those hicks in the heartland to pay their fair share of the cost of government. That's far from the only advantage. A big gas tax would also reduce what economists call the "externalities" of car use--traffic, air pollution and so on. But best of all a big tax would reduce the amount of U.S. dollars going to such dubious characters as the Saudi sheiks and Hugo Chávez. Taxing gas at the pump in the United States has the exact same effect as taxing oil at the wellhead in Saudi Arabia or Venezuela - except that the U.S. gets to keep the money.

I particularly enjoyed the cheerleading for New Jersey, my state of birth.