"Wes" wrote in message
...
"Ed Huntress" wrote:

When I asked where will the revenue go, I ment it in the sense of how it
is going to be
used. Government will spend it on something. One would like to see
debts
paid down but I
would not bet anything worth much on that.

When the economy is going well, pay down the debt. When it's not, don't.
One
useful way to look at this is in terms of GDP: you want the debt to go
down
as a percentage of GDP when GDP is growing. Absolute numbers don't matter
as
much as fractions of economic activity. When the GDP is flat or dropping,
depending on the reason for it, the smart thing often is to increase the
debt.


Having seen how excess social security funds have been 'invested' do you
really trust
government to do the right thing?

Disregarding the fact that social security "surplusses" are actually a net
loss after corporate tax deductions for payroll taxes, how would you have
wanted them to be "invested"?

Think about where you'd put the money. In Treasury bonds? So that we owe the
money to ourselves, and gain interest -- but with the other hand
we're...paying the interest? g

These things get simplified in the popular explanations so that people can
relate to them as if they're like a family budget. But they're not.



I have a feeling government will just get
addicted to it and squander it. Then when oil prices rise they will
want
to keep the
revenue.

Your feelings are interesting, but feelings don't solve problems. Setting
good policy can help solve problems.


Previous response applies.

If you get specific, we can follow the money around the track for an example
or two. Then the question boils down to this: Do you want that money to stay
here, where it swaps hands among Americans (efficiently or not; it doesn't
matter much), or do you want it going to Saudi Arabia?

It's our choice. My bet is that we'll continue to send it to Saudi Arabia,
because the benefits of taxing gasoline are a little too hard for the
average voter to follow. All they know is they don't like taxes -- or much
else, for that matter.



Next, a gas tax is regressive. Something I keep being told is bad. If
I
make 500K a
year, gas isn't a problem. If I was working at walmart or some other
low
wage job out in
flyover country where the comute tends to be over many miles it would be
a
big bite out of
the budget.

The serious gas tax plans include a credit, usually based on income. That
covers lower-income people financially while still leaving in place their
incentive to use less gas.

So you belive tax policy should be a tool of social engineering?

All tax policy is a tool of social engineering, and always has been. It's
just a question of whether you want to do the engineering, or to let Exxon
and Iran do the engineering by default.





Put a $4 floor on prices, using an adjustable tax (phased in over, say,
two
years), and it will keep a lid on demand that will force the oil
producers
to play at a much lower different supply/demand equilibrium; keep more
of
the money in the US; shift the market so that US car builders have a
market
for fuel-efficient cars; create a market for alternative energy; etc.

US car builders don't need a market. The dems have increased CAFE
standards and I suspect
the standards are going be tweeked upwards very soon. The market will
exist by
legislation.

That doesn't create a market. That just distorts a market. People will
still
want bigger cars and the car makers will do everything they can to
encourage
them to buy them, just like they did with the original CAFE standards. The
car makers paid a penalty if they made too many low-mileage cars but it
was
still more profitable for them to make the cars and pass the penalty on to
the customer.

If you have 4 or 5 kids, something that tax policy seems to encourage,
they are not going
to fit in a sub compact.

Well, then, put them in a horse-drawn wagon. g Too bad. They should have
smaller kids...


People that are not schooled in physics seem to get that more mass vs less
mass means you
have a better chance of surviving a head on. So you want to force those
that are not as
well off into cars they will die in when the rich roll over them?

Yup. Get rid of the riff-raff. g Get rid of 75% of the 3-ton SUVs, and
we'll all be a lot safer. Tax the hell out of them and you'll get the
numbers down.



And then the small cars they make are junk, because they're just trying to
squeeze a distorted market and they're building the cars to meet the
standard. That's why their small cars are mostly junk now. When they sell
a
good one, it's usually because they build it overseas and imported it.

My 2001 Saturn is an excellent car. 161,000 miles and counting.

That doesn't make it an excellent car. I have an axe that I use regularly.
It's almost 90 years old and it still has the original head. g It's a
long-lived axe but I wouldn't call it excellent.

If you want to try an excellent car of about the size of your Saturn, take a
test drive in a 3-Series BMW. As I told a couple of GM engineers one year at
IMTS (admittedly, it was a long time ago), if that doesn't make you want to
come home and kick in the doors of your Chevy ****box (or Saturn), you're
not a car guy.

The engineers were not amused, BTW, but they didn't have a rejoinder,
because neither of them had ever been inside of a BMW. That didn't stop them
from bad-mouthing the "yuppies" who bought them.


Not a great winter car since Governor Grandholm is balancing the budget by
not plowing
roads. Of course that means many of us living where I do are looking at
suv's again since
we need to get to work to keep that job.

It's a funny thing, but we got along fine without SUVs for around 70 years,
so I'm not impressed with their attitude. The best snow car I ever had was a
'64 VW bug with studded tires, which carried me to the ski slopes for years,
when everyone else was stopped dead. It got 36 mpg on the highway.



This is not maliciousness, greed, or collusion on their part. They're just
following the market incentives as we've set them up, trying to keep their
heads above water. CAFE standards are better than nothing but they create
some perverse incentives that work against us in the long run. If you want
a
straightforward, clean incentive that pushes in the right direction, a
gasoline tax is the best one anyone has come up with.


That only affects the lower level classes. If I made 300K a year, I'd
drive anything I
liked. It is not clean in any way.

What are you, a communist? d8-) The object is to make the economy work for
all of us, or for as many as possible. I'm not impressed with low-income
people who tell me they're deprived because they can't fuel their SUVs.



Other than that, there will be lots for short-sighted people to bitch
about.
And they will. There's little chance any of this can happen in the US.
Most
likely we'll just go through the same old cycle again, in which we buy
bigger cars and trucks when prices are low, then prices go up and we all
bitch, and US car builders tank again. Then we'll find other people to
blame
for something we did to ourselves.

Well foolish people will buy bigger cars. Should we out law freedom of
choice?

Don't outlaw it. Just make it expensive to make choices that hurt the
whole
country. There's an external cost when thousands of people buy Hummers,
and
the external cost is higher gas prices for everyone.

The hummer drivers are unable to give these things away. At least there
were not able to
a few months ago.

Based on your logic all private jets should be outlawed too. More
efficient to fly
commercial.

Nowhere in anything I've said have you heard me suggest "outlawing"
anything. You're making that up in your head.



They did that in Germany for years, with a tax on engine displacement on
top
of their high fuel taxes. I don't think we need an engine tax. A
substantial
gasoline tax ought to do it.

The chance of me ever owning a car getting 30 mpg again is slight. I
know the roadmap a
head.

As we can see already from the truck/car sales ratio (that 45% was for
July,
BTW; the 49% was for November. I forgot to mention that), a great many
people don't. They just blame it all on market manipulation and think it's
the government's job to ferret out the evildoers and to get prices down
again. What they don't recognize is that they're the ones regulating the
market.

Good Dems.

I don't think political affiliations have anything to do with how much
people bitch about what the government is doing wrong. The ones who think
they know how to do better tend to be the ones who never graduated from high
school. They have all the answers.



We doom ourselves to this cycle. The market is just behaving like
markets
do, despite the mostly futile efforts of OPEC to control prices. They
almost
never succeed at that and they're failing big-time right now. But the
market
will do it for them, once economies bottom out of this slump.

Likely so but low energy cost may be one of those things that help us
get
out of this
slump. You seem to be advocating digging a deeper hole to climb out of
at
this time.

It will be a shot of heroin -- it can put a lid on the pain, but it
doesn't
help anything in the long run. But timing is important. If you raise taxes
quickly now, you'll stall any recovery. It has to be phased in, perhaps
adjusted to the state of the GDP.

Are you supporting the "Laufer Curve"? Seems like one side likes low
taxes and another
thinks high taxes will maximize revenue.

The Laffer Curve is a much-abused device that Laffer himself calls a
"pedagogical device" for use in the econ classes he teaches. Of course it's
valid -- the idea has been around since the 13th century. It's just that
nobody knows where the intersection point of those two curves lies. The most
expert analysis says it's at a total tax rate of 65%. I suspect that's in
the right neighborhood.




Right now I'm driving the same, putting a extra 200 bucks a month aside
for when the
economy goes over the edge. Hope it doesn't happen.

Well, if we could count on everyone to use good sense like that, there
would
be no need for any regulation and we'd be making smart choices without the
coercion of gasoline taxes. But we can't, because people don't, and we
therefore do. d8-)

Well, a lot of people use good sense. Usually the lower on the scale of
earnings the
better sense they display.

Nonsense. Their lack of sense is how they got on the bottom of the scale in
the first place.

The ones thinking they are living large will shrug off gas
taxes as they live outside their means.

If they have enough money, they *can* shrug off gas taxes.


I'm not a fan of social engineering. Social engineering is government
working backwards.

Everything that government does is social engineering, especially taxation.
And big companies that have real market power do the rest of the social
engineering for us.

--
Ed Huntress