By Dave Demerjian
Even at its highest, the price of gas in America hasn't come close to European prices. Governments there have made taxes the keystone of their campaign to cut consumption, promote alternative transportation and go green. It's time for the United States to do the same.
Gas prices have been rising in Europe for more than a decade, and much of the increase comes from tax hikes that now account for 40 to 50 percent of the cost to fill up. The Netherlands and Britain have nearly doubled their gas taxes, to $4.04 and $3.82 a gallon respectively, since the early 1990s. Compare that to America, where Uncle Sam tacks a paltry 18.4 cents onto every gallon of gas.
Eighteen cents? Put down that extra flat screen and smell the fumes: We can afford the tax hike.
The high gas prices we paid for fuel this summer could be a more effective remedy for our fuel-related environmental and geo-political problems than digging in our national parks. In addition to reminding us that, in cities at least, we can walk to the store, it encourages the development of new, fuel-saving technology.
We've already shown we can live with gas at $4 a gallon (less than half what some European countries saw during the price spikes last summer) without inviting the apocalypse. That pretty much shoots down the argument that people won't stand for higher gas prices. And, as Time magazine notes, an increase in the gas tax could be offset by a cut in the payroll tax, which has a far greater impact on our pocketbooks, anyway.
European governments embraced gas taxes to cut consumption. It's working there, and it would work here.
Europeans sucked down about 3.2 million
gallons barrels of gasoline per day (thanks for pointing out the error, David) in 1992. That figure has dropped to 2.51 million today, the Boston Globe reports. Rising fuel prices also have prompted Europeans to embrace ever-smaller cars: Last year's top sellers were the Peugeot 207, Volkswagen Golf, Ford Focus and Opel/Vauxhall Corsa.
Compare that to the United States, where our thirst for gas only grows. We burned through 8.43 million barrels per day in the early 1990s but use 10.84 million today. That's bad news for a country that purportedly wants to cut its dependence on foreign oil, which is why there's a growing chorus calling for an increase in a federal gas tax that has barely budged in 15 years. In addition to feeding our addiction to petroleum, keeping the tax ridiculously low has decimated the federal fund that would finance road and bridge construction if it weren't nearly broke.
Not surprisingly, plenty of people oppose a bump in the tax. The National Center for Policy Analysis calls that tax "perhaps the single worst influence on the development of rational transportation policies in the United States," and suggests it be repealed. The Cato Institute is even more direct, giving its policy paper the no-nonsense title, "Don't Increase Federal Gasoline Taxes — Abolish Them."
But the bottom line is cheap gas hurts us more than it helps us. It keeps us shackled to inefficient cars, undermines efforts to address global climate change, and discourages the development of alternative transportation technologies. As if that weren't enough, it transfers ever larger amounts of money to governments unfriendly to our interests.
With oil prices at a four-year low, now is the time to act. We must increase the gas tax to cut consumption, generate revenue to repair roads, finance mass transit and and put us on a path toward true energy independence.