A in-descent proposal: The Freedom Tax

Let's see if I can propose a solution that will reduce U.S. consumption of oil, following President Bush's new recognition that "America is addicted to oil."

We know smoking is addictive and so we apply a hefty tax upon it, a "sin tax" if you like. We're all free to have our vices, if we're willing to pay for them.

Certainly the U.S. dependence upon oil imports is at least as much dangerous to our "way of life" as the addicted smokers in our company.

So here's a draft plan:

1. Apply a new federal "Freedom tax" to gasoline/deisel, of $1.00/gal in 2006, $1.50/gal in 2007, $2.00/gal in 2008, and so on, up to $5.00/gal in 2014 or whatever that works out.
2. Calculate a "fair use quota" of yearly consumption, perhaps assuming a 8,000 miles/year quota and 40mpg fuel economy. That's about 200 gallons, so for 2006, every income tax filing adult could get a $200 tax credit. By 2014, assuming the standards stay the same call could get a $1000 tax credit. This fair-use credit is supposed to offset the harm to the poor that a straight tax causes, but only helps to a capped limit. Sure it still hurts the poor - those poor driving 10mpg vehicles 30 miles to work every day, but so what? The'll have to work that out sooner or later.
3. The remainder of the freedom taxes collected can be allocated by the government to programs that are deemed to help in the long term "freedom" of America - whether this is the war on terrorism, or investments in mass transit systems that allow people to live without cars.

Well, it's just a proposal. Certainly it could be expanded to natural gas as well. And it should obviously apply to jet fuel. Farmers use a lot of fuel, but I don't know how to offset their costs - we still want to graduate them to other fuels, so seems best to just allow businesses to pass costs to consumers. And it gets a little tricker on products that use oil in product since taxing products may just encourage production to move to outside the country.

But even if we just pick on transportation alone, it would seem a good cause - since we have NO well-scalable alternative to run our transportation in the event of a shortage. Transportation must diversify if it is going to survive.

One disaster at a time. That's not the worst approach to policy when you can get away with it.

Our oil consumption WILL descend. The only question is whether it will be forced from the outside, or our choice.

The Freedom Tax: think about it!