This Prez ’08 ad just keeps on bothering me…

Thanks for your blog entry. Those are my ads so let me stab at responding.

People hear a lot about oil but often don’t know basic facts about it: the process of refining, US production, consumption, imports, etc. The Oil ad you refer to aims to lay out some of that basic information, and make the assertion that if we want to reduce our dependence on foreign oil a good way to do it is a fuel tax.

Almost every politician says they’d like to get off foreign oil. No debate there. When asked to quantify how much they want to get off foreign oil, i.e. what they are going to do about it, things either go silent or get excessively vague.

Huckabee is a great example. He’s got a whole page devoted to the topic on his site: http://www.mikehuckabee.com/?FuseAction=Issues.View&Issue_id=21 . He decries the problem quite effectively (I wish I could write as well as whatever staffer put that page together), but then falls flat on a solution. He talks about knocking heads, pouring federal money at the problem, hoping or regulating that the private sector will pony up research dollars as well, forcing the federal government to purchase alternative energies, etc. This seems like a mildly souped-up version of what we already do.

Most people accept that our collective dependence on oil has the negative externalities of environmental damage and/or reduced national security. Options I see at the federal level to address energy independence:

1. Fund public research
2. Fund private research
3. Give tax breaks to chosen activities (drilling for fossil fuels domestically, hybrid car incentives, solar panel incentives, etc.)
4. Rhetoric: Nice talk about alternatives. We’ve done this for 30 years.
5. Regulate: Haggle with Detroit about fuel economy standards, mandate certain fractions of power come from certain sources, etc.
6. Tax the thing you want to discourage.
7. Bury head in the sand.

I think 6 is by far the “free-est” market solution. It simply encodes the externalities into the price of oil products. Nothing we do is technically free market with our federal tax burden.

Any tax both raises revenue and imposes incentives. We have annual federal government revenues of $2.6 trillion and expenditures of $2.9 trillion, on a GDP of $14 trillion. If you want a smaller government (I do) then promote reductions in spending, don’t strangle the beast. The latter strategy gets us deficits and contributes to a tanking currency. Refusal to look at new tax schemes leaves us mired in an archaic tax system which discourages labor, drives business overseas, has 60,000+ pages of code, is costly to comply with, and has rampant evasion (AKA “the tax gap”). Would it be hard to get politicians to cut other taxes at the same time? Sure. That’s why I’m talking about it. I’d prefer that fight to options 1,2,3,4,5, and 7.

The view that a revenue-neutral fuel tax will cripple the economy is bogus. Don’t forget, our current tax code taxes the heck out of labor. I’d say labor is a pretty integral part of the economy. Matter of fact, labor is more indispensable than energy.

As for whether an oil tax would produce results, I think the mobilization of private capital would be tremendous and efficient. I also think our private sector is substantially more innovative than that of Europe. It’s not just the tax, it’s the public support for it so it’s understood to be a public agenda, not some temporary tax credit that will be rehashed by lobbyists in the next congressional session. That’s why this ad is in newspapers and minimizes mention of Gravel, rather than spending resources funding some backroom lobbying group.

I’m not a Dem, and to answer your question I don’t think you’re stupid, but I do wonder what specifically you would support doing, if anything, about our dependence on foreign oil?

As for perceived bastardization of the English language: Apologies. That irks me too. When I get upset about that type of thing, though, I always catch myself and remember how feeble I find it when the French are dogmatically protective of their language.

A discussion of taxation would follow a similar arc. I find it odd that you suggest people who think their taxes are too low should just write a bigger check to the IRS. By similar logic anyone who thinks consumption of foreign oil is a severe national problem should drive around a moped and call it a day.

As for the specific phrase “cheating other taxpayers” I’m referring to successful (to my amazement) lobbying efforts by private equity and hedge fund managers to continue treating their “carried interest” (performance based compensation) as long term capital gains rather than earned income. It is legal, but it does cheat other taxpayers, IMHO. Most legislators did not intend for this tax treatment, and they hesitate to fix it for the reasons mentioned in my ad.

I’ve tried to match the tone of your post. Please don’t take my response the wrong way. I do sincerely appreciate the entry and respect your views. These issues seem quite challenging to me, but not to be ignored.

Best regards,
Greg

I come from europe, and i woldn t want to have anything to do with politics unless it is urgent! as in this case; the case of US ELLECTIONS 08 !! as the average brainwashed amerikan wold think that this ellections don t concern me, I must say that it sore does , concern me , as it concern s every earth man!
I don t consider me as stupid , nor does the people that know me! I have this terreble tallent of being able to see the big picture , as well as the small one at the same time!, this enables me to see (discover) many kind’s of manipulation s , surrounding me at the time!
In other hand , I know thrue when I see it! MIKE GRAVEL is the man who shore represent s thrue ,the way it should be represented!
NOT ONLY thrue, but all so helthy INTELEGENCE despretly neded in US. THER’S NOT A SINGLE CANDIDATE THAT COMES CLOSE !!!
I SUPPORT MIKE FOR FEW MONTH NOW. I DONATED A COUPLE OF TIMES TOO!
GREG! you earned my deepest reespect!! Please , don’t ever stop doing the right thing!! I hope more people will fallow wou! I shore do! , and have no intenttion to stop any time soon!
AS FOR THE ARTICLE ON THE TOP, I RELY FEEL SORY FOR THE AUTHOR, BEING CONVINCED HE’ S SO INTELLEGENT, WHILE JUST BEING BLIND AND DRIVEN BY MASS MEDIA , NOT EVEN KNOWING IT!! SEE , MIND CONTROL IN THE US. IS STRONG , TO THE POINT WHEN SOMEBODY LIKE YOUR SELF , THE AUTHOR , BELIEVE YOU’R USING YOUR OWN HAD WHEN WRITING AN ARTICLE LIKE THIS ONE FOR EXAMPLE!!
BETTER WAKE UP!!, and maybe listen to what Greg is talking obout!!
Aljosa Slovenija (eu)