Sooner or later, the amount of money we'll be spending on bailouts will begin to impact the quality of life for retirees. Those of us who would otherwise have received lower income taxes, higher social security, better healthcare, cheaper drugs, more community programs, and even cheaper greens fees at public golf courses will feel like we're being "nickled-and-dimed" to death... literally.
I don't know why I didn't think of this sooner: Why not tax gasoline to pay back our new huge government debt? Unless I'm missing something, we were all paying $4 per gallon at the pump not that long ago, and now the cost is $2. We grudgingly survived for a while at $4 per gallon, and the world didn't come to an end. Why not tax another $2 per gallon and learn to live with $4 gas? The extra $2 on the 142 billion gallons we use per year in this country would generate about $300 billion per year and help wipe out major portions of that looming debt.
The best thing about this tax is that it would be largely voluntary. People can find ways to reduce it substantially, starting with driving less and slower. The "slower" is especially easy for retirees, because they are rarely in a hurry anyway. Everyone else can slow down, save gas (and now taxes) and use the time constructively on their Blue Tooth phones.
The prevailing speed on Bay Area freeways is basically 80 mph. Driving 65 reduces consumption by about 20 percent. That change in driving habits alone just reduced the effective cost of $4 gas by 20 percent or 80 cents. Now, the effective cost of the extra dollar has been reduced to about $1.20 for the parsimonious who slow down and get 20 percent more miles per gallon. Beyond that is the actual statistic from body shops across the nation during the gas "crisis." People drove less aggressively and the body shop industry suffered. Is that bad? Maybe the other $1.20 would be reflected sooner or later in lower insurance premiums.
Why do we beat up on the auto industry for not building cars that we would have refused to buy when gas was cheap? We inadvertently had a perfect laboratory for a few months that demonstrated how effectively high gas prices changed our behavior and made us consider smaller cars and conserving fuel. The change was instant. Instead, we keep gas prices low, succumb to a bailout, and insist that the auto industry increase mileage averages to 35 mpg by the year 2020. Please. What good are high mileage cars when there's no incentive to buy them? This is a charade.
Apart from helping us find the money to support Detroit, the tax on gas would contribute to the auto industry's success. Cheap gas, instead, generates no incentive for us to go out and buy the more expensive fuel-efficient cars we are forcing them to manufacture. We are dooming automakers to failure in the absence of a gas tax to motivate us to buy their fuel-efficient cars. Instead, we will be inclined for financial reasons to nurse our current guzzlers to extinction well beyond that "magic" 2020.
Any politician who still views the gas tax as the third rail of politics has already forgotten the Clinton and McCain plans for a gas tax holiday. It was a quick lesson in how to insult the intelligence of the American public.
If we added a dollar today, most patriotic Americans would realize that it was the commendable thing to do. Politicians 15 years ago summoned the courage to defy the auto and oil industries to increase the gas tax from Eisenhower's 4 cents to the current 18 cents per gallon. They need to strike again right now while the soft underbelly of that same special interest crowd is totally exposed.
Income taxes are unavoidable and paid by hardworking, successful people who will soon be working harder and earning less after taxes for many years to come. For retirees, however, no other form of taxation could be more painless than a gas tax. The amazing windfall of revenue is one thing. But, what's truly sweet about this $2 per gallon is that half of the tax will be paid by people who speed, drive inappropriate vehicles, refuse to carpool, could use more exercise, and who, worst case, are unpatriotic. I fit in a few of these categories and deserve to pay the price or change my ways.