Thursday, May 1, 2008

On Gas Tax Relief

It's not giving the public a break, it's cutting them in on the take.

The whole energy system in this country is insane. The energy companies are enjoying record profits while the government of, by and for the people is suffering severe financial setbacks. That's a transfer of wealth, people. Why does it make any sense for us to be transferring all of that wealth?

Go ahead, abate the tax. Here's what will happen. Gas prices will decline sharply, by about 75% of the actual reduction per unit measure the abatement represents. Supply will quickly dry up, there will be gasoline shortages for brief periods in small pockets of the country. Prices will rise, but not to the pre-abatement levels until late August, then they will shoot up sharply, 100% and more of the cost of the taxes as the abatement is lifted. The additional price hike will be attributed to supply problems, tax breaks will be given for building additional refinery capacity.

Used hybrid vehicles resale values will equal and may *exceed* their original showroom sticker. Leasing a hybrid will be the only option within reach for a lot of people who have to have them.

So, it's just a transfer of wealth from the government to the energy companies and the producers, with a side benefit for the hybrid vehicle industry on the rebound.

What we need now is a Volkswagen for our time. A hybrid vehicle like a Prius, or an all-electric plug-in car, that is within the reach of working people, something like $10,000, or feasible with insurance, taxes and the whole enchilada for $150-$200 a month.

So, the only thing we need to make that happen is the capital. If we are going to transfer all of this wealth to the energy companies over the summer, why not require them to start building inexpensive hybrid vehicles?

Well, because they will suck. Anytime you force human beings to do something you tend not to get their best work. The energy companies just need to pay for it. That's not a bad thing, this fantasy entails that money going to improve the energy infrastructure for everybody and for making some kind of a hybrid local personal transport vehicle available to regular people, and some of those people are going to be working for the energy companies. A rising tide lifts all boats.

Ok, it's socialist central economic planning, but it looks nice in a suit, right?

So, leave the tax alone. The pain that is going to be felt this summer is on the way already. Let it come.

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