Gas Taxes as Warfare By Other Means


At Culture11, William Yeatman and Jeremy Lott apply some pressure to recent right-wing calls for a "revenue neutral" gasoline tax hike, to be offset by Social Security tax cuts. Advocate Charles Krauthammer paints it as, among other things, a great national security move, as it would supposedly starve such nasty nations as Venezuela and Russia of gas money by pushing Americans to adopt more fuel efficient vehicles.

But would it starve those beasts?

We have some idea what would happen because the Energy Information Agency's 2008 International Energy Outlook models future gas prices in a world in which the US somehow achieves 35 miles per gallon by 2020. This decrease in demand doesn't do much to bring down gas prices.

Why not? Because, the report tells us, long-term "growing demand" in poor countries is by far "the most important factor affecting world [gasoline] consumption." Two billion people in India and China dream about driving big cars that use a lot of fuel. Their demand ensures that oil will be a profitable business no matter how much the US conserves.

While American austerity could make global demand lower than it otherwise would have been, we do not have the power to tax ourselves into lowering overall global demand such that oil regimes are going to find themselves facing crippling revenue depletion.