If you drive a car, I'll tax the...gas?
October 25, 2006 1:32 AM   Subscribe

Thomas Friedman:
The First Law of Petropolitics, in short, argues that the price of oil and the pace of freedom operate in an inverse correlation. As the price of oil goes up in what I call petroauthoritarian states—like Iran, Sudan, Venezuela—the pace of freedom goes down. These regimes can afford to be less responsive to their people and outside pressure. And as the price of oil goes down, the pace of freedom goes up because these regimes have to open up to the world if they want to deliver for their people, and they have to empower their people more.
But how to lower oil prices and help freedom on its proverbial march? Many, from Alan Greenspan to Andrew Sullivan to Ray Magliozzi from Car Talk think the answer may be to . . . raise the gas tax? The Pigou Club is an ever-updated list of economists, politicians and others who have advocated Pigouvian (or is it Pigovian?) taxes to not only lower oil prices, but reduce greenhouse gases, fix the federal deficit and strengthen our national security. Though some remain more than a little hesitant to jump on the bandwagon and others remain skeptical that the movement is anything more than "just talk," this could be an idea whose time has come, especially since the gas tax isn't as regressive one would think.
posted by joshuaconner (56 comments total) 1 user marked this as a favorite
 
Taxing gasoline would (IMHO, of course) help many issues in our society, from the poor mileage our cars get to how far people are willing to drive to work to how willing employers would be to allow telecommuting for information workers. I'm a petrolhead but I'm in favor of higher gas taxes. I guess that also makes me a pinko commie bedwetter, but there you have it.
posted by maxwelton at 1:45 AM on October 25, 2006


Thanks, I wanted to make an FPP on this for the last month, but my link-fu is inferior to yours. I'm very pro-gas tax, regressive or not.
posted by BrotherCaine at 1:47 AM on October 25, 2006


Here is the Wikipedia article on Pigovian taxation for those unfamiliar with it. Arthur Pigou was a pre-war economist at King's College, Cambridge.
posted by matthewr at 1:52 AM on October 25, 2006


Explains why Texas is so facist. *cough*

But it does make sense, with oil, the government that controls oil wells has absolutely no need to actually govern effectively, since they don't rely on tax money. I'd never heard the term "Pigovian" before, but it's an idea I think makes a lot of sense.
posted by delmoi at 1:56 AM on October 25, 2006


He shouldn't have worn pleated slacks for the photo in the first link.


Just sayin....
posted by sourwookie at 2:10 AM on October 25, 2006


I forgot to mention Greg Mankiw, the Harvard Economist whose excellent blog turned me on to Pigouvian taxes in the first place and is always an interesting and accessible take on economics as it relates to a lot of real-world issues.
posted by joshuaconner at 2:29 AM on October 25, 2006


While on the topic of econ blogs, there's also Marginal Revolution, written by Tyler Cowen and Alex Tabarrok of George Mason University. They're much more libertarian and Austrian School than Mankiw, who is economically pretty mainstream and politically comparatively left-leaning.
posted by matthewr at 2:35 AM on October 25, 2006


there are so many things wrong with this P.O.S. that it's hard to determine where to begin... oh, wait, let's start with this little fact: newsfilter is supposed to be timely at the very least; this pabulum is from june 9th.

"green is the new red, white and blue;" "i can't afford to" have nothing to say; "this is not your father's energy crisis." it's fucking painful to read.

a gas tax is an idea worth talking about, but not with friedman's middlebrow framing. he's a rank idiot. it's not so much the world that's flat, tom, it's your intellectual vigor.
posted by Hat Maui at 2:38 AM on October 25, 2006 [1 favorite]


Are there any living, non-developmentally-disabled humans who take Thomas Friedman seriously as a writer or thinker?
posted by stammer at 2:58 AM on October 25, 2006


"green is the new red, white and blue;" "i can't afford to" have nothing to say; "this is not your father's energy crisis." it's fucking painful to read.

Friedman is well renown as an erudite idiot, ala rumsfield.
posted by delmoi at 3:04 AM on October 25, 2006


newsfilter is supposed to be timely at the very least; this pabulum is from june 9th

I only used the Friedman quote to frame the FPP, which is about the idea of raising the gas tax. Thanks for the derail though.
posted by joshuaconner at 3:25 AM on October 25, 2006


pish posh -- the first link in your post is the text "thomas friedman" highlighted and then a blockquote from said dope.

why not start with a "gas tax" wikipedia link and then highlight some idiotic friedman malapropism further down in the post? better yet, find something in the cnn archive from 2002 with the headline "war over oil?" and then proceed apace with your in-depth, friedman-led exploration of this vital issue.

here, i'll even coin a new term for you: "petromorons," which shall be defined as the class of pundit which, via the artful-sounding prefix, can make any hare-brained idea seem legitimate, if only momentarily.
posted by Hat Maui at 3:37 AM on October 25, 2006


I guess that also makes me a pinko commie bedwetter, but there you have it.

Absolutely the wrong way to look at this. The "price" of gasoline in the U.S. currently does not reflect the real cost to the consumer. The 140,000 soldiers in Iraq are there to keep oil flowing "at market prices" and the cost of this adventure is not presently reflected in the price of gasoline, but rather these costs are recovered through other, existing forms of taxation. A "tax" on gasoline would simply be a correction to the present distortion of the market price.

Nothing comme-pinko about it. Quite the contrary, raising the tax on gasoline would be a market-based solution.
posted by three blind mice at 3:58 AM on October 25, 2006


Wow, is Friedman really that stupid? Or is he just a terrible writer? And how do people like him get jobs at the NYT and publishing deals?

If the "price" (i.e., the cost) of freedom goes down, then freedom is easier, not harder, to get. If it goes up, freedom is harder, not easier to get. He's using "price" to mean value of to governments, I'm guessing, but in purely economic terms, the price of freedom is an opportunity cost (for the most part) and as such, when the opportunity cost of freedom goes down, it's easier to give and get, not harder, and vice-versa.
posted by eustacescrubb at 4:16 AM on October 25, 2006


Friedman usually deals in oversimplified ideas with optimistic and wide reaching appeal to the naive -- thus you may have an initial reaction to his writings that may be slightly off putting.

That said, gas taxes aren't that bad. We have them in Canada. I think that it won't have as much of an effect on the freedom in these regions as actually engagement by the US goverment (instead of non-engagement) nor will it have as much effect as actually solving the middle east conflict (which is the cause of so much bad will.) But ever little bit helps.
posted by bhouston at 4:46 AM on October 25, 2006


Wow, is Friedman really that stupid? Or is he just a terrible writer?

He's a terrible writer.
posted by Armitage Shanks at 5:10 AM on October 25, 2006


Hat Maui, the level of 'snark' in your comments reminds me why Metafilter has become the equivalent of a Greenwich Village coffee shop filled with a bunch of employees who find themselves still working there well into their 30s because they're just 'too smart' for mainstream society. Get over yourself and your pompousness. There's plenty to comment on in the substance of the article - no need to give a dissertation on how to create a proper front page post.
posted by tgrundke at 5:18 AM on October 25, 2006


From the perspective of this European, the idea that "gas taxes" might somehow be "regressive" is absolutely bizarre. The lack of disincentives for people in the US to just squander as much energy and produce as much greenhouse gasses as you want is appalling. That you consider doing something which might reduce your emissions down from their current level (around DOUBLE that of european countries, per capita) "regressive" is fucking insane.
posted by silence at 5:18 AM on October 25, 2006


fix the federal deficit

Yeah, right. More income would just lead to more spending.
posted by ZenMasterThis at 5:25 AM on October 25, 2006


silence, to put it bluntly, it doesn't seem like you know what a regressive tax is. A regressive tax is one that hits the poor harder than the rich.

Income tax is progressive if tax rates get higher as you earn more — in the UK, for example, high-earners are taxed at 40%, low-earners at 22% or less. A regressive tax is the opposite of this. Indirect taxes tend to be regressive; direct taxes tend to be progressive.
posted by matthewr at 5:48 AM on October 25, 2006


Thomas Friedman.

Total.
F***ing.
Retar D.

Can we make these points without linking to the literary equivalent of a pile of puke? Friedman hasnt had an original or interesting idea in his life, and his regurgitations are so offensively written that I am firmly of the opinion that TF shouldnt be prohibited from owning a pencil, much less a computer.
posted by mano at 6:02 AM on October 25, 2006


er, meant to say "should be prohibited"
posted by mano at 6:03 AM on October 25, 2006


I disagree with the TF bashing in this particular context. The reason he's totally irritating is because he writes in a press-release-y, sloganeering style about complex things. But the FPP is not about Friedman; it's about the gas tax. So it seems fine to me to use a Friedman epigramish paragraph as the intro because that kind of writing is, after all, what he does. The FPP isn't a complete essay, so it's not a problem that the intro isn't either.
posted by footnote at 6:09 AM on October 25, 2006


Granted, I'm not an expert at economics, but I always think it's odd that currently, while living in a state filled with dairy cows and no oil wells, I pay more for a gallon of milk than I do a gallon of gas.
posted by drezdn at 6:19 AM on October 25, 2006


silence - I'm European too (British, in fact) and we have a very high fuel tax here, as you know. It is a regressive tax. Look it up if you don't know what that means. VAT is also a regressive tax. Income tax (as generally adopted in Europe) is not.
posted by altolinguistic at 6:42 AM on October 25, 2006


Friedman is a dope.

That said, this:

The "price" of gasoline in the U.S. currently does not reflect the real cost to the consumer. The 140,000 soldiers in Iraq are there to keep oil flowing "at market prices" and the cost of this adventure is not presently reflected in the price of gasoline, but rather these costs are recovered through other, existing forms of taxation. A "tax" on gasoline would simply be a correction to the present distortion of the market price.
posted by three blind mice at 6:58 AM EST on October 25


is wrong thinking. This is assuming the war is about oil flowing now, which it is not, and it also assumes that taxes must be levied in relation to the market they are supposed to assist. Secondly, even if the soldiers were their to keep the oil flowing, the rest of the world would be getting the benefit of that for free as the iraqi oil flows onto the world market, because they aren't compensating us for the cost of keeping that oil flowing onto the world market. Thirdly, very little oil is actually getting out of Iraq.

Gas taxes were created in the first place to pay for roads, but it would make more sense to have a road tax, i.e. tolls metered to vehicle weight and distance driven than to gas. Using more gas does not necessarily mean using more road. Using electric vehicles uses up the roads too, but they aren't paying for it.

Furthermore, the other forms of taxation you mention, and the heavy debt financing which pays for the war do in fact end up in gas prices because of the way those things affect the currency markets. As the dollar declines, the price of oil which is internationally priced in dollars goes up. So higher oil prices do reflect the costs of the war, albeit in a roundabout indirect fashion.
posted by Pastabagel at 7:00 AM on October 25, 2006


I have been advocating this for years, although I doubt one dollar is enough. Two and a half dollars might be though. It's nice to see some others finally coming around to my way of thinking. Raising the tax will enourage conservation and raise some needed revenue. I am typically against regressive taxes based on fairness grounds, but here I think the other issues outweigh the economic fairness issue. Of course, any politician who advocated higher gas taxes would be committing political suicide so it's all just an exercise in mental masturbation.
posted by caddis at 7:05 AM on October 25, 2006


Granted, I'm not an expert at economics, but I always think it's odd that currently, while living in a state filled with dairy cows and no oil wells, I pay more for a gallon of milk than I do a gallon of gas.
posted by drezdn at 9:19 AM EST on October 25


The oil industry is a very efficient business.

People pay more for Evian water than the equivalent amount of gasoline. they pay more for Coca-Cola. What is amazing to me is that people are (a) amazed when you tell them this, and (b) they continue to pay these prices wthout a second thought or complaint after you tell them. This makes me think that many complaints about "oil men" are more rooted in the fact that they make a lot of money selling something people don't want to buy, but have to, rather than people getting rich selling sugar water at a premium that sates their fat bloated asprining-to-be-upper-class-but-condemned-forever-to-be-merely-upper-middle-class appetites.

But hey, that's just one bagel's opinion.

posted by Pastabagel at 7:06 AM on October 25, 2006


Are there any living, non-developmentally-disabled humans who take Thomas Friedman seriously as a writer or thinker?


My brother's Father In Law. But he's a towering moron.
posted by spicynuts at 7:06 AM on October 25, 2006


Wow, at some point the italics up there should have closed. I blame Bush.
posted by Pastabagel at 7:06 AM on October 25, 2006


Very nicely done post by the way.
posted by caddis at 7:07 AM on October 25, 2006


caddis - two dollars won't spur conservation. That's simply one dollar more than people were paying at the high.

The problem that no one is taking into account is that the middle class tends to live further out from major metro areas, and thus have longer commutes. The tax is regressive for this reason. You could argue that sprawl is part of the problem, and you'd be right, but it would take decades of sustained high gas prices to force people to move in, and you'd have to spend a lot more to reduce crime, and improve services to make that attractive.
posted by Pastabagel at 7:11 AM on October 25, 2006


I laughed, thanks
posted by matteo at 7:18 AM on October 25, 2006


Think long term Pastabagel. They live further out because driving is cheap. Higher fuel prices will encourage people to purchase more fuel efficient vehicles and discourage them from commuting long distances alone in their vehicles.
posted by caddis at 7:22 AM on October 25, 2006


A greatly increased gas tax would certainly help, and I'm all for it, but gas is supposedly a pretty inelastic good... it might take a very large tax to have a useful effect on consumption, and consumption taxes disproportionately hurt the poor. I've read proposals that that be offet via a new tax credit (so that the net financial effect on the poor is zero, but everyone still faces an incentive to conserve gas), which might help.
posted by gsteff at 7:45 AM on October 25, 2006


What about the subsidized portion of the gas cost here in the U.S.? Could this be reduced to a similar effect?
posted by los pijamas del gato at 7:49 AM on October 25, 2006


matthewr and altolinguistic you're absolutely right in assuming i don't understand the term. Please ignore my ranting, I'll be quiet and listen for the rest of this conversation.....
posted by silence at 7:56 AM on October 25, 2006


They live further out because driving is cheap.

Not necessarily. They may live further out because of crime, to raise kids in better schools because they can't afford private schools and city public schools are by and large awful, etc. Lots of reasons to live further out that may make them continue to live further out, but have less disposable income. And spending less means fewer consumer sales, which slows the economy and costs jobs. A higher gas tax may solve one problem at the expense of creating many others and lowering the quality of a lot of people's lives.
posted by Pastabagel at 8:02 AM on October 25, 2006


I'm a little confused by that wiki article on pigovian taxation. Actually, I'm confused about the graph..

It shows that the marginal social cost (MSC) is higher than the marginal private cost (MPC) - that's nice, tragedy of the commons and all that, no big deal. Then it shows that MPC+T increases the MPC by a constant, which makes it higher than the MSC for small quantities produced. Now comes the confusing part.. The MSC is shown to be growing at a faster rate than the MPC, given that the tax is a constant, the MSC soon out paces the MPC+T, so what has been accomplished?

Okay, I see.. The price being set out ahead of time, the point of optimisation is reached at a much lower quantity produced. What can I say.. If everything in the world was a linear deterministic system it would be easier to model in a computer, but much less interesting - and we call it economics!
posted by Chuckles at 8:04 AM on October 25, 2006


Stoopid. Who really cares about freedom when people are starving to death? Talk about democratic bias. . . really what we should be interested in is living standards NOT freedom. While freedom is a great thing, not everyone is ready for it.
posted by j-urb at 8:05 AM on October 25, 2006


I'm of two minds when it comes to gas taxes. On the one hand, my 6 year old car only has about 18,000 miles on it, so I wouldn't be drastically impacted, but my husband puts 60 miles a day on his car, so he would. (For the record, he also drives on a tollroad that costs us an additional $120 a month, above the cost of operating the car...a toll road that keeps increasing in price, despite promises that the tolls would go away when the road was paid for...5 years ago.)

Here in Texas, the current governor has instituted one of the biggest land grabs in Texas, possibly the country's history in order to create a toll road system that would run the length of the state. It would be owned and operated by foreign entities, and Texans would see zero percent of the tolls collected. (The builders of this toll road are significant contributors to both Gov. Perry and Pres Bush.)

While I agree that our roads have become a mess in the last 20 years, I would rather see a gas tax that goes back into state coffers, than a "toll tax" which goes to a Mexican corporation.
posted by dejah420 at 8:21 AM on October 25, 2006


They have private toll roads everywhere. The govt may have grabbed the land, but the road owner is paying for the road to be built. I.e. the govt and tax money isn't paying to build the road.

The problem with tax money that goes into the general fund is that it will never be used on boring maintenance things like roads, but for new and specialized programs that curry favor with one group of voters or another.
posted by Pastabagel at 8:27 AM on October 25, 2006


They live further out because driving is cheap. Higher fuel prices will encourage people to purchase more fuel efficient vehicles and discourage them from commuting long distances alone in their vehicles.

I don't know about the rest of "they", but _I_ live farther out because housing is expensive, not because driving is cheap.
Even with a $2.50/gallon tax, it'd still be cheaper for me to drive to work than to live closer.

Of course, a $2.50/gallon tax would more or less end any recreational driving for me.
posted by madajb at 8:37 AM on October 25, 2006


_I_ live farther out because housing is expensive,

Yes, 2000+ sq.ft houses on 5,000+ sq.ft lots are expensive. Cheap driving helps to minimize the cost of excessive housing. Meanwhile there is an even bigger problem. Companies are all moving "out there" too - they like the cheap land as much as anyone..
posted by Chuckles at 9:40 AM on October 25, 2006


Even with a $2.50/gallon tax, it'd still be cheaper for me to drive to work than to live closer.

You're probably not alone in that, considering we recently had gasoline roughly double in price, and consumption just continued to rise. That's the problem with a tax to reduce gasoline consumption. To make much difference, it'd have to be so high that it'd bankrupt the American consumer, who's already spending more than he earns. To the extent that taxes need to be raised it's a good way to do it, but I wouldn't expect any noticeable effects on the Sudan, Venezuela, Saudi Arabia, and the rest.
posted by sfenders at 9:50 AM on October 25, 2006


Yes, 2000+ sq.ft houses on 5,000+ sq.ft lots are expensive.
They are.
Though my smaller house was more expensive than a bigger one built farther out.
posted by madajb at 9:56 AM on October 25, 2006


They have private toll roads everywhere. The govt may have grabbed the land, but the road owner is paying for the road to be built. I.e. the govt and tax money isn't paying to build the road.

And a road without land to put it on is what exactly?

This is exactly why crap like that shouldn't be privatized in the first place.
posted by butterstick at 10:15 AM on October 25, 2006


drezdn wrote:

while living in a state filled with dairy cows and no oil wells, I pay more for a gallon of milk than I do a gallon of gas.


that's because the free market only pertains to those who can't afford high paid, well connected lobbyists...
posted by any major dude at 10:17 AM on October 25, 2006


We interrupt this thread for a public service announcement:

On 14 March 2004, Thomas Friedman wrote the following in his NYT column: "Infosys was spawned in India, a country with few natural resources and a terrible climate."

This is among the least factual statements about India I've ever read, and I've read a lot of misguided stuff about India. It'd top the list, except that Friedman managed to get the part about Infosys being an Indian company right.

This was drawn from the series of columns that inspired the book that's been sitting on the NYT bestseller list for 80 weeks now. Because a book with a thesis so monumentally wrong, written by a man with so little knowledge of his subject, has been so widely read, I feel obligated to reiterate this utterly braindead statement of Friedman's every time his name comes up. I do this in casual conversation too. Thomas Friedman is giving me Obsessive-Compulsive Disorder.

We now return you to your regularly scheduled posting.
posted by gompa at 11:19 AM on October 25, 2006


eustacescrubb writes "Wow, is Friedman really that stupid? Or is he just a terrible writer? "

Are these options mutually exclusive?
posted by mr_roboto at 11:47 AM on October 25, 2006


Who really cares about freedom when people are starving to death?

While books have been written detailing the reasons why this view is wrong (and by people much smarter than us), I'll confine myself to pointing out that there's never been a famine in a democracy.
posted by nickmark at 11:47 AM on October 25, 2006


I'm not sure that taxing gas/petrol really does work. Here in the UK we have possibly the highest level of tax on petrol in Europe. It costs easily £30 or more (about $55 maybe?) to fill the tank of even a tiny car.

And yet, our roads are jammed with traffic pretty much all day long. Most car-owning households have more than one car, and the vast majority of journeys taken are under 3 miles. High gas/petrol prices has not put us off wanting to use it...
posted by Inglesa Loquita at 1:32 PM on October 25, 2006


Lets see - listen to economists or listen to people who are looking at geology and production.

Like this
posted by rough ashlar at 1:32 PM on October 25, 2006


I blame Bush.
posted by Pastabagel at 7:06 AM PST


Blaming Bush does not amuse The Blue.
posted by rough ashlar at 1:36 PM on October 25, 2006


Here in the UK we have possibly the highest level of tax on petrol in Europe.

Energy use in tonnes of oil per capita (UNECE, 2002):
USA          7.97Sweden       5.72France       4.34Germany      4.20UK           3.83Armenia      0.63
posted by sfenders at 1:56 PM on October 25, 2006


make sure they increase the tax on the fuel/gas that the ultra rich are using on their private jets.
posted by hpsell at 10:24 AM on October 26, 2006


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