Two short adjacent articles in the July 13 Bangor Daily News are “Oil price jump pushes trade deficit higher” and “High cost of gas fails to quash consumers’ fuel thirst.”
The first one says in part that the increase in the May trade deficit reflected a 16.9 percent surge in the foreign oil bill, reflecting a big jump in the price of imported crude oil.
The second says that even though the price of gasoline is going above the once-feared $3-a-gallon level, we are consuming more. It also says that energy costs are only a small percentage of the average U.S. household budget.
Fareed Zakaria, in the May 22 Newsweek, says, “Since the mid-1970s the demand for petroleum in Western Europe and Japan has been flat. In the United States it has doubled.”
Why is that? Vehicle fuel in many European countries is over the equivalent of six dollars a gallon because they tax it heavily, up to twice the basic cost of the gasoline.
Spurred by cheap gas, the United States has built a gas-guzzling society. We’ve bought pickups and SUVs, we live far from work, we drive for fun, and we spurn carpooling and public transport. Even our toys guzzle gas – motorboats, snowmobiles, and four-wheelers.
In the Jan. 30 Bangor Daily News, op-ed columnist Edwin Dean counts up some of the hidden costs of gasoline. These include building and maintaining roads, military operations to preserve our oil, vulnerability to upheavals from dependence on foreign oil, health costs from emissions, possible damages from global warming, traffic congestion and accidents which require police help.
These costs could be paid by vehicle fuel taxes. Dean proposes an increase in gasoline taxes to cover the fuel costs that are now hidden. Americans hate taxes, and would never allow gasoline taxes to be raised unless perhaps some other tax is reduced. Several countries have increased taxes on environmentally destructive products and activities while simultaneously reducing other taxes. This is what I propose we do; slowly raise the tax on oil products to the neighborhood of $5 to $6 a gallon while decreasing income and sales taxes. We could thus keep the total tax burden about the same while shifting taxes toward products and activities that guzzle oil.
If the United States were to tax gasoline as heavily as those European countries, more money would go into the U.S. Treasury and less would enrich the countries that produce it, many of whom have no love for the United States and may use the money to harm us.
Many are the effects of increasing the cost of vehicle fuel. Fuel-efficiency research will be encouraged. People will find ways to drive less by combining trips, carpooling, using public transportation, riding bicycles and giving up the Sunday drive. They will shuck their SUVs, buy vehicles that use less fuel and choose to live closer to their work. When people want fuel-efficient cars, manufacturers will want to make them and there will be no need for mandating fuel-efficiency standards. And our trade deficit will be reduced.
Edward R. Huff, of Old Town, is emeritus associate professor of engineering at the University of Maine.
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