Persimmon Alley Press
Persimmon Alley Press
  • About Persimmon Alley Press
  • Books
    • Close Encounters with the Cold War
    • Mother's Century: A Survivor, Her People and Her Times
    • Encounters: Ten Appointments with History
    • Killer Protocols
    • Clean Coal Killers
    • The Killer Trees
    • A Feast of Famine
    • Molly Malice in Alterland
    • Alligator In My Basement
    • Sudden Addiction
    • The Flesh of the Cedarwood
  • Smoke the Dottle
  • Richard's Rants
  • Contact

Rant 678: A Palatable Price at the Pump

3/11/2022

0 Comments

 
Picture
​Both the U.S. and the European Union have taken a huge step toward sanctioning Russia for its Ukraine aggression. They are substantially reducing their Russian oil and gas imports—the U.S. to zero. While an essential sanction, this action will greatly increase the price of gas, contribute to worsening inflation and risk the ire of voters.
 
There are, however, three initiatives that the U.S. could take to temper gas prices and take some of the pressure off hard-pressed consumers: (1) encouraging an increase in domestic oil and gas production; (2) temporarily suspending federal and state gas taxes; and (3) providing means-tested tax credits/rebates to taxpayers.
 
(1)   Oil and gas production companies will hardly require government incentives to rev up production. When the oil price tanked as the planet emerged from the Great Recession and Saudi Arabia substantially increased production in order to reduce competition from America’s exploding shale oil and gas fracking industry, drilling became unprofitable. Many U.S. drillers capped their wells. Now that oil prices are skyrocketing, uncapping those wells and resuming production is a no-brainer. Visions of windfall profits are about to be realized.
 
(2)   Congress should move immediately to suspend the federal gas tax of 18.4 cents per gallon and 24.4 cents per gallon for diesel fuel. Federal gas taxes fund the Highway Trust Fund, which finances road construction and repairs. Since the recently enacted Infrastructure Investment and Jobs Act allocates much more money to highway and bridge building and maintenance than is in the Highway Trust Fund, the temporary suspension of the gas tax will hardly be felt at all.
 
The states should follow suit and also suspend their fuel taxes, which are often even higher than the federal levy, ranging from a low of 14.98 cents per gallon (Alaska) to 66.98 cents per gallon (California).
 
Doing the math, the price at the pump will be reduced by between 33 and 85 cents per gallon depending on the state.
 
(3)   The U.S. has a long history of means-tested tax credits/rebates it has allowed either to encourage certain behaviors or to alleviate pocketbook pressure in a crisis. The most recent such initiatives were prompted by the Covid-19 pandemic’s impact on family finances. Instituting such a credit based on taxpayer miles traveled or gas expenditures would lessen the added expense burden caused by higher prices.
 
So that taxpayers should not have to wait until the next tax filing season, credits could be distributed quarterly based on a sampling of miles traveled/gas consumed, with adjustments for individual taxpayers based on their annual tax filings.
 
The combination of all three initiatives would insulate the U.S. somewhat from global energy vicissitudes while also easing inflation’s impact on family pocketbooks and the national economy.
 
Dick Hermann
March 11, 2022

0 Comments



Leave a Reply.

    Picture

    Author

    Richard Hermann is the author of thirteen books, including Encounters: Ten Appointments with History and, most recently, Mother's Century: A Survivor, Her People and Her Times. Soon to be released is his upcoming Close Encounters with the Cold War, a personal reflection on growing up in the nuclear age. He is a former law professor and entrepreneur, and the founder and president of Federal Reports, Inc., a legal information and consulting firm that was sold in 2007. He has degrees from Yale University, the New School University, Cornell Law School and the U.S. Army Judge Advocate General’s School. He lives with his wife, Anne, and extraordinary dog, Barkley, in Arlington, Virginia and Canandaigua, New York.

    Archives

    February 2023
    January 2023
    December 2022
    November 2022
    October 2022
    September 2022
    August 2022
    July 2022
    June 2022
    May 2022
    April 2022
    March 2022
    February 2022
    January 2022
    December 2021
    November 2021
    October 2021
    September 2021
    August 2021
    July 2021
    June 2021
    May 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020

    Categories

    All

    RSS Feed