Thursday, March 02, 2006

And Your Point Is?

Both The Tax Foundation and Linda Beale offer comments on a CBS/NYT poll reported on in the NYT on February 28. The headline of the NYT article was "Americans Are Cautiously Open to Gas Tax Rise, Poll Shows." The conclusion drawn by the NYT was:
Americans are overwhelmingly opposed to a higher federal gasoline tax, but a significant number would go along with an increase if it reduced global warming or made the United States less dependent on foreign oil. . . .
The Tax Foundation responded to the comments with a bit of pedantic nit-picking. I can't figure out whether Gerald Prante, the author of the post, truly does not grasp either the essential point revealed by the poll or the policy goal that the proposal to dramatically increase the tax on gasoline hopes to achieve, or whether he is just being disingenuous:
Given that the original question of favorability toward a general gas tax hike was asked, the second question is based on a false premise, making it misleading to the respondent. Here’s why:

Regardless of the definition of "dependence on foreign oil," there is nothing substantive in asking a second question about whether respondents would support a gas tax if it reduced our "dependence on foreign oil." If you define “dependence on foreign oil” as the percentage of oil that comes from other countries (compared to domestic production), then a higher gas tax at the pump is not going to reduce that number at all. That tax would apply to all oil, whether it comes from Texas or Iran, meaning the percentage “dependency” will not change.

On the other hand, if you measure “dependency on foreign oil” by the actual amount of oil coming in from other countries, then of course you will be reducing your dependence on foreign oil. But that would also be reducing our “dependence” on Alaskan oil or Texas oil. You would merely get lower oil consumption period, regardless of the location from which it comes. And you would get that same result from the general gas tax posed in the original question, where respondents overwhelmingly (85 percent) said no.
It is true that articulating the goal as "reducing dependence on foreign oil" is somewhat misleading. But I think that most Americans understand that what is meant is not really an effort to reduce the relative percentage that foreign oil bears to our total oil consumption, but rather a reduction in the total amount of cash we send abroad to buy the stuff. The relevant operative theory is that by dramatically raising the tax on gasoline we will (i) put a good portion of the cash we spend on gasoline in our (collective) pockets, rather than the pockets of foreign nations, (ii) not be in thrall to feudal despots, and (iii) reduce the total consumption of oil. Beale gets it right:
[E]nergy researchers think there is a real correlation between gas taxes and gas consumption: Severin Borenswtien at the University of California, Berkeley's energy institute suggests a 10% increase in cost could reduce consumption by 6-8% over the long term. . . So Americans are willing, after all, to think long term and to pay taxes to protect the things they value.

Robert Frank, an economist at the Johnson School of Management at Cornell, suggests that a $2-a-gallon gas tax, rebated against payroll taxes, could "produce hundreds of billions of dollars in savings for American consumers, significant reductions in traffic congestion, major improvements in urban air quality, large reductions in greenhouse gas emissions, and substantially reduced dependence on Middle East oil."
I assume that there are good arguments against a dramatically increased gasoline tax, but the silly word-play offered by The Tax Foundation and Prante is not among them.

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