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Would You Pay $1 Extra for A Gallon of Gas?
(ABC NEWS) Updated 4:00 PM ET February 1, 2006
President Bush used Tuesday’s State of the Union address to issue a dramatic call for more fuel independence and technology in America. But how might that call be answered?
Economists agree there is no simple way to wean the nation from oil.
Are Americans willing to give up reliance on gas-hungry cars and SUVs and move to smaller cars, or vehicles that operate on gas-electric hybrid technology? Would drivers accept a significant SUV sales tax or substantially higher gasoline taxes?
Cars, trucks and planes account for the majority of the U.S. oil appetite, 60 percent of the nation’s daily oil consumption of 21 million barrels per day. Could the government use revenues from increased taxes to increase funding for research or create incentives for consumers and carmakers to move to more fuel-efficient technology? It’s not likely to be popular with consumers, but new taxes could create hundreds of billions of dollars to address the country’s dependence on oil.
The president’s 2006 budget includes more than $400 million dedicated to various alternative fuel projects, including the development of a next generation of hybrids and a process to make fuel ethanol from cellulosic plant fiber. Bush’s critics say that’s far too little.
No matter what anyone says about reducing the dependence on foreign oil, solutions almost certainly involve sacrifices many Americans are not accustomed to making. So if the march toward fuel independence must be painful, what cost might Americans be willing to pay?
What a gas tax could mean: Based on some simple calculations, a hypothetical $1 tax on each gallon of gasoline purchased in the U.S. would provide $140 billion in federal revenues. That money could be used to create incentive programs for carmakers to build more hybrids, and research the viability of all-electric motors and alternative fuels like biodiesel.
But that tax would also constitute a 44 percent rise in prices at the pump.
Would Americans go for it? One thing is certain; it would reduce consumption. That’s what happened last year when gas prices hit record high.
In addition to driving less, Americans also purchased fewer SUVs last year to avoid the high gas prices. So would another large jump continue to discourage consumption?
“As an economist, I can think nothing else,” said John Felmy, chief economist at the American Petroleum Institute.
SUV Sales Slowing
Americans bought 4.1 million SUVs in 2005, according to Edmunds.com. That’s down from 4.3 million in 2004.
The sharp jump in gas prices clearly discouraged SUV purchases, according to API’s Felmy, so it’s logical to think that any increase in the cost of SUVs might have a similar effect.
An aggressive federal tax of 10 percent to 20 percent on all SUV purchases would certainly bring sales down, but would have devastating effects in Detroit.
The real question is whether politicians have the will to pursue these sorts of changes. And do Americans really want them?
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Our gas would still be cheaper than most European countries… so yes.
But what would this tax money go toward?Would I pay extra? What are my the other choices. icon_scratch.gif Of course I pay crybaby2.gif and then try to use less gas. w00t.gif Probably won’t be able to afford to buy anything else because of the fuel surcharges on goods. If you want a recession, that is a good way to get one.
That would definitly decrease consumption. But like montefrazer said the price of everything would go up. That is apparent at what everything costs right now. Ther has been a marked increase in the cost of most products at the store. And the economy would slow down big time.
I would pay for an effective government program that could be held directly responsible for developing and implimenting new oil-indepedent technology. I wouldn’t pay the gas tax though because there is no way to ensure that all that money is being used for research
Quote:That would definitly decrease consumption. But like montefrazer said the price of everything would go up. That is apparent at what everything costs right now. Ther has been a marked increase in the cost of most products at the store. And the economy would slow down big time.Most definately!
I’d have the tax pay for an overhaul of the interstate highway system, but I’d only have the tax be on gasoline. Diesel would not have the tax, or a lesser tax to keep the cost of shipping things by semi from rising too much.
Bio fuels I would give a small goverment subsidy until they are cost viable in the real world.The side effect would be that diesel cars gain popularity like they do in European countries that have similar tax exemptions for diesel.
Heck you can get just about any car over their with a diesel engine, even Jaguars, BMW’s and Mercs.In the long run I suspect most people would switch to more fuel efficient cars; possibly hybrids. I suspect there are a number of people (like me) who already minimize their driving, and LOVE their car. So, we’d be stuck paying higher gas prices until our cars fell apart or were banned.
I’d love a really really high SUV tax. Drogar-Laugh(LBG).gif
As to would I pay $1/gallon more for gas. Yes, if it made in USA from some sort of alternate (i.e.- Ethanol, Turkey guts -> Oil, etc.)
Quote:As to would I pay $1/gallon more for gas. Yes, if it made in USA from some sort of alternate (i.e.- Ethanol, Turkey guts -> Oil, etc.)Turkey or fish guts, whatever they can make it out of! Drogar-Laugh(LBG).gif
I mean no offence with this post.
Why is it that American cars develop so little power from such big engines? Would extra tuning not be better so that instead of a 4.5 litre engine, a 2.5 would do instead? Why all the big cars, too? Is a 2,500kg off-roader needed to go shopping, or would a small car such as a Volkswagen Lupo do? You get 70mpg out of that car, too.
In short, why not:
– Encourage sensible car design
– Use engines that are smaller, higher-revving and more highly-tuned
– Diesel! (hybrid engines are rubbish just now, if the Prius is anything to go by)
– Encourage sensible buyingIt’s a shame to see that things are all getting bigger and bigger here in the UK, too. The number of off-roaders people have now… It’s stupid. Most of them haven’t even seen dirt.
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