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Politics : The Citizens Manifesto -- Ignore unavailable to you. Want to Upgrade?

To: Road Walker who wrote (233)	6/20/2005 7:22:51 PM
From: TimF	Respond to of 492

It happens all the time Yes, but lots of bad things happen all of the time. I think the frequency that tax incentives do happen is a better argument against adding more then it is an argument for adding more incentives. The tax code is too complex and manipulating as it is. The cigarette, liquor and gas taxes are at least simpler, more straight forward, and on a national level, lower then your plan. As much as I might not be a fan of taxes to reduce consumption of a product, I like such taxes more then I like taxes to fine tune demand. For example if your going to tax alcohol, its better to just tax alcohol rather then to tax different types of, or brands of alcohol at different rates, and than change those rates regularly. The very fine tuning that you count as a benefit or feature, I consider a draw back. We consume 24% of the worlds oil, and currently produce about 45% of our needs. Commodities prices fluctuate at the margin. A 5% difference in demand can have a dramatic effect. 24% of worlds oil used, 55% of that imported. Meaning that we import 13.2% of the worlds oil production. Do you have any data on how much of that goes to produce gasoline? Lets say 60% (that's just a guess I don't have the data), so now your down to under 8%. And how much of that goes to passenger cars? Maybe 80%? Now we are at a bit more than 6%. Now you get an important but uncertain question. How much would that figure decrease if your plan was implemented? You said that your "WAG is a 20% reduction in per mile gas usage in 5 years. 35% plus in 10 years." I don't think it would be quite so large, and also I think miles drive will continue to increase. I'll plug in a 15% reduction. That gives us a reduction of American oil imports of a little less than 1% of the world's oil production. And that is based on today's data. Our share of the world's oil consumption is declining (mostly being taken up by China) If you don't believe that significant conservation in the US will lower overall prices, I didn't say it would not lower prices, I said that it would result in any great decrease of prices. I would now amend that to "it wouldn't result in any great sustained decrease of prices". then I can't imagine what you think will happen to prices without a decrease in demand. Through the roof? If prices go through the roof, that will itself decrease demand. re: I don't think there would be any great increase in new industries or high paying jobs for the middle class. I thin there would, unless the technology innovation came from overseas. Innovation always chases the money. I don't think you will get a great increase in innovation because of this. You might get an overall increase in innovation but it will be small if it occurs. What you will get more of is a refocus of money and effort in to the area of reducing fuel use. Meanwhile you will probably have less American car workers both because American companies are relatively weak at producing smaller cars, and because smaller cars use less material and usually less labor. re: There is also the direct pain/punishment inflicted on those who buy cars with less than the average fuel efficiency. If you avoided this by only pushing the subsidies and not the taxes, you would just be dispersing the pain through the whole population of taxpayers. You keep bringing that up... remember, revenue neutral. Read the part you quoted. I said there is direct pain and punishment on those hurt by the taxes. "revenue neutral" doesn't change this fact. I also said that if you tried to avoid it by getting rid of the new taxes, then the pain would be spread out through other taxes (because it would no longer be revenue neutral). Large families can buy efficient mini-vans, can pools can use efficient 4 doors. If your program really does cause people to use a lot less gasoline by using more fuel efficient cars, then many efficient 4 doors and minivans, will still be at or above the average. re: Another possible downside is that this move would probably hurt domestic auto manufactures who compete better with large cars and SUVs then they do with smaller vehicles. Possible short term... they would have to adapt. They have had good reason to adapt for a long time but at best they have made a poor effort. Some American small cars are somewhat competitive but overall they struggle. re: To the extent your plan does increase demand for smaller vehicles and reduce demand for larger vehicles there may be a decrease in safety. There may also be an increase in safety as you get more maneuverable cars on the road, and fewer behemoths. The cars might be more nimble but probably not enough to offset the loss of passive safety that you get in a decently designed large car. Esp. since the change will not be focused on improving handling but on reducing gas use. Wider tires help handling but hurt gas mileage. Other changes to increase handling are often at best neutral in terms of gas mileage. The same goes for safety equipment (although some of the safety equipment already is mandated). re: Also to the extent that you get such a demand shift you put some upward pressure on the price of the small vehicles and some downward pressure on the large, not enough to cancel out the effect of the tax credits and increases but enough to reduce the effects that you are looking to get. Very slight...except in the case of luxury cars. I imagine the BMW's of the world would figure out great new ways to get increased mpg, and charge through the wazoo for it (because of the tax credit). I don't think "very slight" would be accurate. At most "slight" and I have my doubts about that. If you give a large tax credit on the most fuel efficient models of cars, most of which don't cost a lot of money (they are economical and cheap because they are small) you really distort the market for them. The effects of this distortion would probably be smaller for the luxury cars. They cost a bundle anyway, and if people have to pay an extra $10k on there $100k car they will probably pay it. The effect of $8k off on a $19k car is much larger. Tim