Oil Prices Fall, So Stoke Me Up Again

With oil prices having fallen to near $70/barrel the window has re-opened on the revenue-neutral energy tax described by Greg Mankiw last year (my thoughts).

The basic idea is simple - raise the gas tax and offset that revenue stream with a cut in the payroll tax.  (But what about seniors who drive?  Hmm...).  Hard to do that with gas at $4 a gallon, easier with gas under $3.

Obviously this won't happen in a lame duck Congress but if oil prices are low next spring/summer maybe it could be an agenda point for Obama.  An added bonus - we can all reminesce about Al Gore's BTU tax of 1993, which of course was not revenue-neutral.

Comments

[cathyf]

I have a better idea... Instead of simply cutting the payroll tax by X amount, set up a voluntary private retirement account system. So Mankiw's plan would cut an individual's payroll tax by X. My plan would be that the individual taxpayer would have two choices:

a) put X into a qualified retirement plan (any one of the several which already exist.)

b) put X into social security.

If you choose option b) then you get more social security benefits when you retire. Employers would be responsible for making sure the the money goes into either the retirement plan on to social security (just like now.) Employers who have no retirement plan would only have social security as an option.

[clarice plumber]

Or--Switch to a national health plan and rather quickly reduce the number of old people who need pensions and the number of years you'll have to support them. It's the European way.

[TigerHawk]

I also like boosting taxes on gasoline and returning the money by some reasonable means. The payroll tax is a good proxy, because most driving you *must* do is commuting. As for "seniors who drive," let them take taxis!

Private accounts will not work for Social Security; if Bush could not make it happen with a Republican Congress, it is never going to happen, especially not after the collapse on Wall Street this fall. Better to raise the retirement age. Where did we get the idea that taxpayers should subsidize earlier retirement than necessary. Bump "early" retirement to 68 and "full benefits to 70 for anybody who is today under the age of 55 (that includes me, by the way). 70 being "the new 60," that should not be a problem.

Yeah, yeah, what about the small percentage of the economy that still does heavy physical labor. Two answers. First, if they can show some disability, even if only by dint of age, give them benefits. Let's not then see them on the golf course. Second, they can always get less demanding jobs.

That's the only way out of this thing.

[Rick Ballard]

My biggest question is whether proceeds will be going to the S.C.A.M. SoLunar Windmill project. We need just a tiny bit of seed capital - certainly no more than $3 billion or so - to get off the ground. We've been assured by Wall Street investment bankers that peddling worthless crap to tree hugging north easterners is a breeze there is significant interest in enviro friendly energy investment.

We just need that tiny bit of seed money to more thoroughly explore the concept. A concept which, I might add, a consensus of reputable and peer reviewed concerned climate scientists have agreed is the only possible salvation for mankind from the horrors of that pernicious pollutant, CO2.

[Boatbuilder]

Is it just me, or is the fall in oil prices being reported as if it were a bad thing?

And are you serious about an increased gas tax? Regardless of its merits (and I am not so sure about that--at all) do you really think the same pols who won't pass reasonable SS legislation or immigration legislation or bank rescue legislation because they are deathly afraid of losing elections will support a new gas tax--because we all liked paying $4.50 a gallon so much we can't stand paying less?

And while reducing the payroll tax to offset it makes some sense, most people think the payroll tax is paid by their employer.

[kim]

Rick, I think you'll like this one. Go to cjunk.blogspot.com and scroll down to 10/16 to the 'warmists and MSM retract predictions' post.
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[kim]

Interesting thoughts, TigerHawk, but the disability for physical labor is a boondoggle. It already is. I don't have the answer, though.
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[clarice plumber]

Is it to much to ask to hope there'd be no higher tax on gas, that the govt would get out of blocking energy production and that with the profits the energy companies would bring on line energy saving products? Or is it verboten to again suggest private intiative tumprs five year plans ?

[PaulL]

****quickly reduce the number of old people who need pensions****

Proposed Obama/Biden slogan: It's patriotic to commit assisted suicide.

[liontooth]

Expect the price to go up. Opec has scheduled a meeting for Friday 10-24-08, and it looks like they will cut production to raise the cost.
Top off your tank on Wednesday/Thursday.

OPEC website.

Paul L wrote:"Proposed Obama/Biden slogan: It's patriotic to commit assisted suicide."
LOL

[sophy]

Please do not hesitate to have twelve sky Gold . It is funny.