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FLAT WORLD

America needs a ‘patriot tax’ on gasoline

THOMAS L FRIEDMAN

Two dates — two numbers. Read them and weep for what could have, and should have, been. On Sept 11, 2001, the OPEC basket oil price was $25.50 a barrel. On Nov 13, 2007, the OPEC basket price was around $90 a barrel.
In the wake of 9/11, some of us pleaded for a ‘‘patriot tax’’ on gasoline of $1 or more a gallon to diminish the transfers of wealth we were making to the very countries who were indirectly financing the ideologies of intolerance that were killing Americans and in order to spur innovation in energy efficiency by US manufacturers.
But no, George Bush and Dick Cheney had a better idea. And the Democrats went along for the ride. You’d think that one person, just one, running for Congress or the Senate would take a flier and say: ‘‘Oh, what the heck. I’m going to lose anyway. Why not tell the truth? I’ll support a gasoline tax.’’
Not one. Everyone just runs away from the ‘T-word’ and watches our wealth run away to Russia, Venezuela and Iran. I can’t believe that someone could not win the following debate: Republican Candidate: ‘‘My Democratic opponent, true to form, wants to raise your taxes. Yes, now he wants to raise your taxes at the gasoline pump by $1 a gallon. Another tax-and-spend liberal who wants to get into your pocket.’’ Democratic Candidate: ‘‘Yes, my opponent is right. I do favour a gasoline tax phased in over 12 months. But let’s get one thing straight: My opponent and i are both for a tax. I just prefer that my taxes go to the US Treasury, and he’s ready to see his go to the Russian, Venezuelan, Saudi and Iranian treasuries. His tax finances people who hate us. Mine would offset some of our payroll taxes, pay down our deficit, strengthen our dollar, stimulate energy efficiency and shore up Social Security. It’s called win-winwin-win-win for America. My opponent’s strategy is sit back, let the market work and watch America lose-lose-lose-lose-lose.’’ If you can’t win that debate, you don’t belong in politics.
‘‘Think about it,’’ says Phil Verleger, an energy economist. ‘‘We could have replaced the current payroll tax with a gasoline tax. Middle-class consumers would have seen increased take-home pay of 6-9%, they would have had to pay more at the pump. A stronger foundation for future economic growth would have been laid by keeping more oil revenue home, and we might not now be facing a recession.’’
As a higher gas tax discouraged oil consumption, the Harvard University economist and former Bush adviser N Gregory Mankiw has argued: ‘‘the price of oil would fall in world markets. As a result, the price of gas to (US) consumers would rise by less than the increase in the tax. Some of the tax would in effect be paid by Saudi Arabia and Venezuela.’’
But US consumers would have known that, with a higher gasoline tax locked in for good, pump prices would never be going back to the old days, adds Verleger, so they would have a much stronger incentive to switch to more fuelefficient vehicles and Detroit would have had to make more hybrids to survive. This would have put Detroit five years ahead of where it is now.
We simply cannot go on being as dumb as we wanna be. If you hate the war in Iraq, then you want a gasoline tax so you can argue that we can pull out of there without remaining dependent on an even more unstable region.
If you want to see America thrive by becoming the most energy productive economy in the world — a title that now belongs to Japan, which doesn’t have a drop of oil in its soil — you want a gasoline tax, which will only spur US innovation in energy efficiency.
NYT NEWS SERVICE