higher gas prices are beneficial

yes, it’s true… the recent spike in gas prices is indeed beneficial to us in the long run regardless of whether you see it or not. in fact, i would argue that prices need to increase even more in order to prevent them from falling below $3-4/gallon ever again. by now you probably think i’ve lost it (which i may have). so why do i say this?

basically we need to dramatically increase the tax on gas here in the united states. for a point of reference on just how low our tax is on gasoline, “taxes add $4 to the price of a gallon of gas in Europe and $3.25 in Japan, but only 40 cents or so in the United States.” before we all start complaining about how the cost has soared to over $3/gallon average, just look at how much foreign countries are paying and have been paying for quite some time. now relate this to fuel efficiency of automobiles in those countries and the poor performance we are doing here in the states. “Cars average 36 mpg in Europe and 31 mpg in Japan vs. only 21 mpg in the United States.”

the reason that those countries vehicles are so much more fuel efficient is because as common sense would tell you, higher taxes cause drivers to pay more for gas. having to pay more for gas will crimp demand and lead to lower wholesale prices.

“Lower wholesale prices, which would mean less profits for oil firms, combined with a higher tax could transfer money from Big Oil to the government, which could then use the cash for public programs. Consumers would have to pay the same amount – or even more than now – but at least that extra cash could be returned to them in some way… It might be used as a tax credit to offset the sting for those with a lower income, countering one of the most common arguments against such a tax. It could also go towards improvements in mass transit, expanded student loans or lower health insurance premiums.”

and this is definitely the direction we want to go. since we, the consumers, aren’t willing to conserve gas voluntarily by buying more fuel efficient cars (we’re obsessed too much over the “glitzier” features like “fancy cupholders”) the government should step in and play a larger controlling role in that. in other words, if you aren’t willing to conserve gasoline, then you’re going to pay for it in much higher fuel costs! the government should also place greater restrictions on the car manufacturers, which also includes upholding those restrictions which the government has had a problem of actually doing as of late.

“Raising taxes in the United States, say, ten cents a year until they reach $2, would stop people from driving their Hummers to get a quart of milk. For those who would be economically impacted, the extra money they pay in gas taxes could be returned to them as a tax rebate.

But any system so simple and so fair hasn’t got a prayer of becoming law in the current political climate, where politicians quake at the thought of asking voters to make sacrifices. And without incentives, consumers will continue to choose cupholders over good citizenship.”

something definitely needs to be done as it’s pretty obvious most people don’t care about anything but themselves (ignoring their social responsibility) and won’t take the initiative to seek more efficient modes of transportation. thankfully higher gas prices may force them to react, but i don’t think the prices are high enough to bring about a drastic change quite yet.

references: this and this