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Politics : Just the Facts, Ma'am: A Compendium of Liberal Fiction -- Ignore unavailable to you. Want to Upgrade?

To: mph who wrote (56538)	3/27/2007 11:01:31 AM
From: Oeconomicus	Read Replies (2) \| Respond to of 90947

mph, I'm not sure what you're saying here with regards to farmers, but re your previous post about an energy tax, I think the best argument for an energy tax is not dubious connections to global warming, but rather a national security argument. Our (and China's and India's) growing consumption of oil has the side effect (and externality in econo-jargon) of empowering anti-American, anti-Western, anti-democratic and anti-free-markets tyrants in several corners of the globe. Hugo Chavez's state oil company is one of our biggest suppliers of oil and his petro-dollars go directly 1) to fund his military build-up in Venezuela, 2) to underwrite puppet political movements in and then arm new clients states around Latin America, 3) to support armed rebels in Columbia - a US ally, 4) to buy political support at home from the poor with redistributive giveaways and from select, cooperative wealthy who benefit from government ties in exchange for their support, 5) to buy support around Latin America to undermine hemispheric free trade agreements that, just a couple of years ago, seemed like done deals, and 6) to promote sympathetic pols in the US through selected heating oil giveaways to their constituents. Many similar things can be said about Chavez's ally Iran, even though (AFAIK) we don't import oil directly from them. And even Russia, though not in the overtly anti-American/anti-markets/anti-democratic camp of today's Venezuela and Iran, does seem to increasingly lean that way when they are flush with petro-Euros. Anyway, both Islamo-fascist Iran and authoritarian-socialist Venezuela would be failed states if not for demand-fueled high oil prices. But oil being a fungible commodity, we can't curb their totalitarian ambitions by simply buying our oil elsewhere. Curbing demand, OTOH, could help to force the beasts onto a diet in the short run and, by increasing incentives for the development and adoption of alternatives, eventually starve the beasts. Now, all that said, I would still need to see empirical evidence as to the extent to which a Pigovian tax would actually impact demand. What effect can we realistically expect from what level of the tax? I would also need to be convinced that whatever revenues the tax generates would be returned to taxpayers, as opposed to being spent on new government programs, in a fashion that will offset the income effect of higher gas prices.