standby energy tax
Last night on the way home, I heard David Frum on Marketplace. Frum is a former speechwriter for President Bush, and a fellow at the American Enterprise Institute, so I pretty much assume that I’m going to disagree with everything that comes out of his mouth.
But this is part of what he said:
"OK, the price [of energy] is high again. This is the perfect moment to pass a
standby energy tax, a tax that would kick in when the price of oil
falls below say $60 a barrel. Consumers could feel secure that if they
make the investment in a hybrid car, or a smaller house with a shorter
commute, they won’t feel like fools in four or five years…"
This makes a great deal of sense to me. I think we’ve talked about it here before, but it’s pretty hard for most people to significantly reduce their driving in the short run in response to increased gasoline prices. As a recent CBO study shows, the highest response is in those areas where there is existing mass transit as an alternative. And if the price gets high enough, people start limiting leisure travel. And indeed, there’s some evidence that gas consumption is finally starting to drop a bit. But most people can’t just decide not to drive to work or the grocery store. However, if people know that gas prices are going to stay high for long periods, they’re more likely to make the sort of big changes that Frum mentions.
So, what am I missing? Is there a hidden problem with it that I’m not seeing? Or if it’s really something that a libertarian true believer like Frum and a green progressive like myself can agree upon, why aren’t any politicians talking about it?