Wednesday, July 17, 2002

Congestion Relief: Fuel Taxes

Tax on fuel consumption to provoke changes in behavior and overcome our addiction to cheap fuel. Raise tax level on fuel to penalize consumption and reflect the true cost of low priced fuel consumption as it pertains to traffic congestion. Directed at encouraging conservation measures and decreasing the competitive disadvantages of promising alternate technologies. Vehicle expenses include operations, maintenance, and the capital cost of the vehicle. By increasing the price of fuel, an operating expense, the competitive balance of the three expense categories changes. Vehicles that are more fuel efficient become more attractive to buyers relative to less fuel efficient versions. At high enough tax levels spontaneous driving patterns diminish, trips become better planned, and shorter commuting distances are favored. Raising fuel taxes in a controlled fashion can better accommodate the economic impact than the pending catastrophe awaiting us when oil reserves, a non-renewable resource, become depleted. Sooner or later, controlled or uncontrolled, changes on this order are inevitable. An artificial crisis is easier to plan and survive.

A blanket effort is required. Otherwise people will drive outside the impacted area to buy fuel at depressed levels, and thus obstruct progress along these fronts. Multi-level target groups might be necessary. Exemption and partial exemption from fuel taxes would be analogous to subsidies. Freight trucks and farm equipment could be exempted to forestall inflation of food and consumer prices, whereas no personal vehicles should ever be exempted. To localize taxes, for instance higher in urban areas where more options for behavior modification exist, require all gas stations to use government sponsored and special issue credit/debit cards or non-exempt standard alternatives like cash or normal credit cards. The credit card system must be able to distinguish commercial from personal use, i.e. diesel from gasoline, and apply the appropriate tax rate based upon user residence address.

Short Term: Public notice of hardships along with requirements for sacrifice and change.
Long Term: Diminished mobility and optimized travel.

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