Freedom Energy Tax Now

I don’t mean to be a broken record on this, but if the U.S. doesn’t follow Tom Friedman’s advice and install a serious energy tax on oil, the alternative energy business is going to collapse and we will be even more in the clutches of the Petrogarchs.

Advocates are concerned that if the prices for oil and gas keep falling, the incentive for utilities and consumers to buy expensive renewable energy will shrink. That is what happened in the 1980s when a decade of advances for alternative energy collapsed amid falling prices for conventional fuels.

In order for investment to flow into the Alt. Energy business there needs to be a floor under the price of oil. The Europeans and Asians already have accomplished this, but the dreams of a new American economy based around ET (energy technology) will only be realized if domestic producers of solar, wind and geothermal can compete in the near term as well as the long term. I’m aware that this is a tough sell politically, but it is worth the next President spending political capital to make it happen.

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0 Responses to Freedom Energy Tax Now

  1. Ken Ballweg says:

    Gosh, do you think the oil companies are aware of that pattern?

    No, couldn’t be.

  2. seattle steve says:

    I don’t think additonal taxes on gas are the answer. That adds to the cost of food and other necessary goods and hurts the poor people far more than the wealthy.

    Why not increase the tax credits or incenctives on ET investments instead? Maybe a capital gains tax discount for the venture capitalists that invest in renewable energy projects?

    On an unrelated subject, I’m curious to know what you and the community here think about Biden’s assurance that we’re going to have an international crisis within 6 months to test Obama’s mettle. Was that a gaffe or does he know something that the rest of us don’t?

  3. Rachel says:

    Um. Steve. One thing you should know – the country is close to broke. The US is no longer in a position to be using tax credits for stimulus. because the levels of debt it’s carrying are now significant enough to be a drain on the economy.

    The country has been borrowing beyond its means from China and others for the entire period of the Bush administration, to fund all manner of initiatives/wars/handouts while providing tax relief. At some point, this has to stop. Voodoo economics is dead.

    For every initiative that’s proposed, someone will now have to come up with a way to fund it, while also finding ways to reduce the deficit.

    As for Biden’s comment, the US has an international ‘crisis’ of some kind with Iran, Pakistan, Iraq, Syria, China/Taiwan, North Korea etc etc at least once a year. So it’s not a bad bet. It just depends on what your definition of crisis is.

  4. Mason Dixon says:

    I think he could have said the same thing about McCain, in fact, the way the world feels about the direction this country has taken in the last 8 years, it’s even more certain with McCain. But unlike Bush Co., Obama/Biden are aware of the threats, and preparing. I don’t think it was a gaffe. I think he’s being realistic.

  5. Dan says:

    You can read Biden’s remark either as some kind of admission, intentional or accidental, that he has inside knowledge of something. Or you can read it as Biden saying that he’s sure that somebody in the world, either foreign or domestic, will try something in the expectation that Obama will crumble, or his support will crumble. I think the latter is more likely but who knows.

  6. Dan says:

    As far as a gas tax, I agree wholeheartedly that it hurts the poor more. On the other hand, when you’re in a hole, the first step is to stop digging. We were in a hole back in 1974, and our response has been to hire an ever-larger succession of backhoes to make that hole as deep as we can. It might look like it’s already impossible to climb out of. However, the first rule of hole escape is to



    The only way to stop digging this hole is to stop using so much foreign oil. That means drastically cutting our use of oil, because no matter what the drill baby drill people say, we simply don’t have the oil to sustain ourselves.

    The only way to stop using so much foreign oil is to make it more expensive. Otherwise we, including the people at the bottom of the scale, will continue to use more of it every year.

    I’m all for increasing subsidies for public transportation. If I didn’t have to walk half a mile to the nearest bus stop, and if the fare wasn’t $1.50 each way, and/or if gas were $6 a gallon, I’d probably take the bus to work myself.

    I’m also for increasing tax credits for the purchase of a fuel-efficient car. Or switch it around and slap ever-higher consumption taxes on vehicles that get poor mileage. If you want a muscle car, fine, go buy one…but you have to chip in an extra ten percent in energy taxes. Don’t like it? Buy a Prius.

    But this everybody-gets-a-hulking-three-ton-pickup nonsense has to end.

  7. seattle steve says:

    Um. Rachel. Can you explain why the US is not in a position to use tax credits to stimulate investment when Congress is apparently considering spending another 300 billion on economy stimulus round 2. I don’t know what the answer is, but I would think they should be able to create investment incentives that will work better than artificially inflating the price at the pump, which as I mentioned disproportianately hurts poor people. Creating ET tax incentives would be meant to provide capital from the private sector instead of the government.

    I might agree Biden’s comment is not a bad bet…but he guaranteed it within 6 months. That seems like an odd thing to say to me, especially considering he didn’t say it about McCain as MD suggests he could or should have.

  8. Jason says:

    You can make a gas tax revenue-neutral. That might be the only way to sell it politically. The revenue can be used to lower the payroll tax, which would reduce the effect on people while encouraging work too.

    You are 100% right about the need to do this, Jon. I am doubtful it will be done though.

  9. Rick Turner says:

    I’d be for it with some sort of tax relief for the lowest 25% on the income scale. I also don’t see the problem with “spreading the wealth around”, so hated by Brother Len. That’s what trickle down economics was supposed to do…and didn’t. I’m all in favor of leveling things out a bit at the expense of the very rich. Screw ’em. They’ve been screwing us with the help of their pals in Washington and Wall St. for quite some time now. It’s payback time.

  10. seattle steve says:

    I don’t recall seeing Len complain too much about the “spreading the wealth around” comment. He is a Democrat, remember? That might have been me you are thinking of.

    I’m in favor of leveling things out a bit also, but I fear that if you try to penalize the rich too much you hurt the whole economy as well and we all lose.

  11. Rachel says:

    “Can you explain why the US is not in a position to use tax credits to stimulate investment when Congress is apparently considering spending another 300 billion on economy stimulus round 2.”

    Well, exactly. Congress is digging the nation into a deeper financial hole. The national deficit is staggeringly large. It’s going to cost at least the 300 billion to bail out the financial sector (and personally I believe it’s going to cost even more). What makes you think there’s still any room to make it even larger?

    Or are we still in the world of “buy now, pay later”? I thought that went bust a short time ago.

    As for “investment incentives”, the best way to create these would be to price carbon appropriately. That would make the path to investment in alternative energy *very* clear, with a level playing field in terms of competitive energy.

    At the very least we need to remove the subsidies for oil that already exist – they’re already in the tens of billions, and they make no sense from a strategic point of view. Perhaps we could just do that, rather than raise tax.

  12. museincognito says:

    I agree, Jon. A floor price in this country is an imperative.

    I also agree that such a tax will hurt the poorest among us, but, at that point, it is the haves who must step up to the plate and help supply the basic necessities for food and shelter and the like if need be. Or…. the oil companies will lower prices (shocking!) when demand falls, as it has, offsetting any tax. Necessity is the mother of invention.

    Gas is eight bucks or so in most of Europe and we Americans cry when it hits half that. Our way of life and priorities are so fucked up I don’t know where to begin….. I’m reminded of Jon’s post about families having to take a look at thrift and resale shops. Not perfectly good used clothes! Nooo! Maybe people can take a good hard look at how they spend their money in other areas before crying foul about high oil prices. The lawmakers and tax imposers need to educate the masses on why higher taxes on oil would be a great thing. It will be the biggest marketing gig of our day. Make it work, I say.

    I like the idea of heavily taxing our romper rooms on wheels. A lot.

    Without incentives for ET and a “fine” for using oil, I, personally, can scrap my plans for creating jobs and contributing to a cleaner, more conscious way of life without an obvious compromise. And our planet goes to hell. How selfish of me, I know. 😉 We cannot afford to let alternative energy to collapse this time. We just can’t. My personal involvement not withstanding.

    Frontline is finally back this season (PBS) and I’m eagerly anticipating the next show called “Heat” on this week. Check it out. I think it’s going to be very informative and eye opening.

  13. museincognito says:


    I love your ideas. No more subsidies for oil and a cost for carbon output. Good, good, good.

  14. museincognito says:

    If anyone is interested, “Heat” is on tonight, but will be available online afterwards at

  15. Dan says:

    Len is a Democrat to the same degree that REO Speedwagon was a quality musical act.

  16. Rick Turner says:

    Len is just besotted with Sarah Palin. His elevated pulse and heavy breathing come through over the virtual airwaves here like the vibrations and scent of a bull elephant in musth.

  17. Ken Ballweg says:

    My brain is getting full so I try to stay away from this blog for awhile, so it’s catch up time.

    Steve, two things; it is possible that Biden has the task of planting the seed of lowered expectations. Obama isn’t the one who see’s himself as messianic that’s been put around his neck like a stinkin’ albatross and it will be difficult for him to live up to realistic expectations let alone the unrealistic. Thought it was clever of Joe to tie it to Kennedy. As for the spread the wealth discouraging business, how can you be so sure. You know, it’s not really been tried, and is such a repeated meme that it’s sort of like “trickle down”, i.e. I just know it’s going to disincentivise business cus I just know it. Repeating something often doesn’t make it so; oh, for example, tax cuts for the wealthy being good for the economy. How’s that one working out now?

    I know a ton of small business people who swear that any increase in minimum wage will kill the economy. Never proven true, not once, but it gets said over and over and over – so it’s true? Same with taxes on industry, and taxes on the rich. Never saw a drop in the number of people trying to get richer regardless of where the bar is set. Unplug from the WSJ editorial assumptions and take a stroll in reality. There are no, zero, naught, nada statistics to support the notion of the flight of wealth. Moving off shore is not the same thing; companies who had every advantage in terms of tax breaks, subsidies etc. did that to maximize profits and would have done it regardless if it earned them two cents more on the widget.

    Mind, never seen a business that wouldn’t screw
    America and blame it on taxes etc. but since most of them haven’t paid significant taxes for years we know that’s a smoke screen.

    Gas tax to support alt energy: damn skippy. Never fly with our gutless pols, but should be done. Will it hurt, hell yes, but not doing it will hurt more. This country has forgotten that it is not chosen, anointed, or blessed. Work and sacrifice are going to be needed to make up for those false assumptions, and the dropping price in gas is a damn good time to put in the tax. Hell, big oil did it, and everyone accepted it. Grumbled, but did it. Think about that. Give the poor tax credits for gas use so it doesn’t have to hit them so hard (yeh, yeh cash flow and all that) but they found ways to work around it when it was a big oil tax.

    Again, repeating stuff often doesn’t make it so. It’s time to do things as radically different as Europe had to to recover from WWII. It can be done. Just spread the hurt equally, stop assuming the rich need to be pampered or else, and do what has to be done. Delay in doing that is what got us in this mess, and the piper wants his due.

  18. Jon Taplin says:

    Seattle Steve- On Biden’s Crisis comment. He’s just showing off , like he knows the inside scenarios. It was a totally pointless comment from a campaign pov. However, we have been in an international crisis for the past ten weeks if anyone noticed. Obviously they are going to have to face both economic and security crisis situations. I’m sure they could have handled the financial crisis which developed over the last few years much better than the Bush Administration.

  19. Jon Taplin says:

    Rick Turner-Len, Pat Buchanan and Rush Limbaugh are all besotted with Palin. Just turns out that 55% of the country think she’s not qualified to be President. Len is on the wrong side of history and is boring the hell out of me.

  20. Rick Turner says:

    When is there not an international crisis? There was just one in Iceland. Did anybody notice past day two of that news? How about Darfur? Zimbabwe? Burma? The ongoing crisis in North Korea? What’s Chavez up to today? What about heads in an ice chest delivered to the cops in Mexico? Who blew up whom and where yesterday?

    About 20 years ago I went to the Galapagos Islands for about two weeks. I’d been a newspaper junkie…I really kept up and thought every day’s news was important. Then I went cold turkey for three weeks…two in the islands, and one in the Andes. I came back, picked up a paper, and it all read the same…wars in foreign places, my boys, crises in the next county over, fires rage, men and women cry and die, and it’s a crisis a minute somewhere in the world. So much of it is what we bring to it all. Same as it ever was, to quote David Byrne.

  21. Rick Turner says:

    And, btw, I went back to being a news junkie, but I plan to unhook when I go back to Tasmania in about five weeks. I discovered that I can take it or leave it. Doesn’t mean I don’t care or won’t vote or express my opinions here and elsewhere, but I’ve only got so much adrenaline, and I don’t fake that anymore.

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