Taxing Vehicle Miles Traveled
As we wean ourselves off gasoline with alternative energy means ( electric, hydrogen or whatever), there will be a need for supplanting the current gasoline tax. A program is currently underway that proposes to install GPS computers in each and every road vehicle to measure vehicle miles traveled for the purpose of taxing such mileage (http://www.roaduserstudy.org/). You would be billed periodically for your use of the roads. This elaborate system would run well into the billions of dollars and present invasion of privacy issues.
This proposed GPS system is totally unnecessary. All vehicles (cars, trucks, busses, motorcycles) on the roads today have recorders of vehicle miles traveled. These recorders are rugged, reliable and tamper-proof. They are called tires. You want to tax vehicle miles traveled? Tax tires.
Proponents of the GPS computer scheme claim that high usage roads could be charged at higher rates. A system for doing that is already in place; it uses toll booths.
Now some people might tend to drive conservatively, within the speed limit, slowing down for curves, etc so as to get more mileage out of their tires, but think of this as a reward, like a charitable deduction on your income tax. Others may get less mileage by driving aggressively, speeding, cornering fast, etc. Think of this as sin tax. Tires on a Lincoln may not wear as well as those on a Ford Focus; think luxury tax. It all sort of makes sense, doesn’t it?
Overall, there would be increased economic pressure to buy vehicles with high tire life; they, of course, would be small and lightweight, consuming less energy.
You might think there would have to be a downside to this approach and you would be right; there is. It’s in the numbers. Let’s say you drive 20,000 miles per year and get 20 miles to the gallon; that’s 1000 gallons per year. With the current federal tax at $0.184 per gallon, that’s revenue of $184 per year. Now to get that much out of taxing tires, what would the tire tax have to be? Let’s say a set tires is good for 60,000 miles. At 20,000 miles per year, it last’s 3 years. So to get $184 per year, the tax on the set of tires would have to be $552. That’s a big chunk of dough all at once. It would take time to get used to that, so it might have to be phased in over several years as gas tax revenues decline.
With the tire tax approach, there might be a temptation to run tires beyond their safe life. Tire manufactures might need to incorporate wear indicators or alarm chips to signal owners (and police) of excessive wear. Perhaps something along the lines of red light cameras might be feasible. That is certainly more cost effective than installing an onboard GPS computer in every vehicle. Furthermore, the thought of multi-lane bumper-to-bumper commuter vehicles all continuously and simultaneously querying GPS satellites boggles the mind.
It should be noted that a federal excise tax on tires has been in effect since 1918 (except for a few years from 1926 until the Great Depression). It's scheduled expiration date is 1 October 2011. This information is taken from "Federal Excise Tax on Tires: Where the Rubber Meets the Road" available at https://www.policyarchive.org/handle/10207/957. Quoting from this source, "This excise tax is said to be easy to administer with minimal federal collection costs."
Topping it all off is the fact that the tire tax approach has no privacy issues.
In summary, the tire tax approach has the following attributes:
Zero cost
No privacy issues
No billing requirements
Simplicity
Ruggedness
Tamper-proof detectors
Detectors already installed
Reward for conservative driving
Penalty for aggressive driving
Encouragement for buying small, light vehicles
Thursday, March 12, 2009
Sunday, December 7, 2008
Economic Recovery and Energy
In terms of efficient use of government spending to spur the economy, let's look at renewable energy sources and energy conservation. When money is spent on such things as roads and bridges, jobs are created and, as a result, income tax revenues go up and the nation's deficit can be reduced. That's good.
When money is spent on renewable energy sources such as solar and wind power, the same benefits derive, but there is an additional payoff in that these facilities then continue to produce money in the form of energy. (See previous blog, "Energy 101").
Energy conservation pays off similarly; i.e., it continues to save money indefinitely. Benjamin Franklin was right: a Watt-hour saved is a Watt-hour earned.
The fact that these measures also reduce air pollution and global warming is a further economic benefit since less money then needs to be spent on attacking those problems by other means.
So when it comes to spurring the economy, the biggest bang for the buck can be had by spending on energy conservation and energy generation by renewable sources.
Sunday, July 13, 2008
Energy 101
When oil prices go up, the price of just about everything goes up, sooner or later. It isn’t just because of shipping costs, although that’s part of it. It’s because most of the cost of just about everything you buy is for energy. If energy were free, the price of a new car would probably be on the order of $100 dollars or so. Cars are made mostly of iron ore, sand and oil. Using energy, the iron ore is converted into steel, the sand into glass, and the oil into rubber. This may leave out a few ingredients, but the point is that the raw materials are almost dirt cheap and what it takes to gather those raw materials and turn them into finished materials and assembled into a car is just energy. The machines to turn those materials into a car are themselves made of steel, etc. That is, their cost is mostly for the energy it took to produce them.
When you buy a new shirt, the cost of the cotton on the plant, or wool on the sheep, or oil in the ground that went into the rayon is negligible compared with the cost of turning those raw materials into a shirt. That cost is mostly for energy.
What do you suppose you would have to pay for a potato in the ground, or a quart of milk still in the cow? Pennies. The major cost is for the energy it takes to get it to the store in a saleable form.
What about labor costs? Well, what does the laborer do with his income? He buys stuff that, again, has energy as it’s major cost. So labor costs are just energy costs at arms length.
Does solar energy have a positive payoff? Not if the additional dollar cost (which is mostly for energy) doesn’t pay back in an acceptable time. What is acceptable? That’s up to you. If you are a businessperson, you might think in terms of prevailing interest rates. If it requires government subsidy to make it saleable, there’s a clue that it doesn’t pay.
What about the hybrid car? If the extra cost has a good payback, then it’s worth it. If gasoline prices continue to rise like they have recently, then it may be well worth it.
There is, of course, a lag between the time energy, e.g., oil, prices go up and the prices of goods in general rise. Where the major cost is for fuel itself, as in seafood, the lag is short. Where a large portion of the cost is for production machinery, the lag is longer.
There is also a lag between oil prices and the price of other other fuels, since it takes time for industry to change to the cheapest fuel. So when oil prices go up suddenly, automobile prices will go up later and more slowly.
So if you are genuinely interested in minimizing your “carbon” footprint, you can do it by minimizing your expenditures on energy, since energy production (whether in power plants, airplanes or automobiles) is the major cause of that “carbon”. And since all expenditures on materials are mostly for energy, stop buying stuff. Let the Native American of yesteryear be your role model. Live in a tepee. Eat what you can harvest or kill. At least live in a small house, drive a cheap car with good gas mileage, and get your clothes from Goodwill.
When oil prices go up, the price of just about everything goes up, sooner or later. It isn’t just because of shipping costs, although that’s part of it. It’s because most of the cost of just about everything you buy is for energy. If energy were free, the price of a new car would probably be on the order of $100 dollars or so. Cars are made mostly of iron ore, sand and oil. Using energy, the iron ore is converted into steel, the sand into glass, and the oil into rubber. This may leave out a few ingredients, but the point is that the raw materials are almost dirt cheap and what it takes to gather those raw materials and turn them into finished materials and assembled into a car is just energy. The machines to turn those materials into a car are themselves made of steel, etc. That is, their cost is mostly for the energy it took to produce them.
When you buy a new shirt, the cost of the cotton on the plant, or wool on the sheep, or oil in the ground that went into the rayon is negligible compared with the cost of turning those raw materials into a shirt. That cost is mostly for energy.
What do you suppose you would have to pay for a potato in the ground, or a quart of milk still in the cow? Pennies. The major cost is for the energy it takes to get it to the store in a saleable form.
What about labor costs? Well, what does the laborer do with his income? He buys stuff that, again, has energy as it’s major cost. So labor costs are just energy costs at arms length.
Does solar energy have a positive payoff? Not if the additional dollar cost (which is mostly for energy) doesn’t pay back in an acceptable time. What is acceptable? That’s up to you. If you are a businessperson, you might think in terms of prevailing interest rates. If it requires government subsidy to make it saleable, there’s a clue that it doesn’t pay.
What about the hybrid car? If the extra cost has a good payback, then it’s worth it. If gasoline prices continue to rise like they have recently, then it may be well worth it.
There is, of course, a lag between the time energy, e.g., oil, prices go up and the prices of goods in general rise. Where the major cost is for fuel itself, as in seafood, the lag is short. Where a large portion of the cost is for production machinery, the lag is longer.
There is also a lag between oil prices and the price of other other fuels, since it takes time for industry to change to the cheapest fuel. So when oil prices go up suddenly, automobile prices will go up later and more slowly.
So if you are genuinely interested in minimizing your “carbon” footprint, you can do it by minimizing your expenditures on energy, since energy production (whether in power plants, airplanes or automobiles) is the major cause of that “carbon”. And since all expenditures on materials are mostly for energy, stop buying stuff. Let the Native American of yesteryear be your role model. Live in a tepee. Eat what you can harvest or kill. At least live in a small house, drive a cheap car with good gas mileage, and get your clothes from Goodwill.
Sunday, March 18, 2007
Super-Tax the Super-Rich
The following e-mail was sent to the New York Times in response to an article in their "Current" section of March 18, 2007:
Gregg Easterbrook's logic regarding the cause and effects of the super-rich ("A wealth of cheapskates") is convoluted. The middle class is not better off because the super-rich are much richer; both have benefited from improvements in technology and productivity. There is no good reason why those with very high incomes should not be taxed at much higher rates. Certainly anyone with a $10 million dollar annual income can get by comfortably on $6 million dollars a year. On that basis I propose the following tax rate: make the rate percent simply one-tenth of the log (to the base 10) of the annual income in thousands. So a condensed tax table would look like this:
Income....Tax Rate....Tax.....After Taxes
$10K..........10%........$1K........$9K
$100K........20%........$20K......$80K
$1M...........30%........$300K.....$700K
$10M.........40%........$4M........$6M
$100..........50%........$50M......$50M
$1B............60%........$600M....$400M
Once we have a Democratic Congress and president, and some reasonable campaign funding reform, perhaps we could get something along these lines. The middle class would see significant tax relief, thereby spurring on the economy, the national debt would be trimmed and the very rich would hardly notice the difference.
Gregg Easterbrook's logic regarding the cause and effects of the super-rich ("A wealth of cheapskates") is convoluted. The middle class is not better off because the super-rich are much richer; both have benefited from improvements in technology and productivity. There is no good reason why those with very high incomes should not be taxed at much higher rates. Certainly anyone with a $10 million dollar annual income can get by comfortably on $6 million dollars a year. On that basis I propose the following tax rate: make the rate percent simply one-tenth of the log (to the base 10) of the annual income in thousands. So a condensed tax table would look like this:
Income....Tax Rate....Tax.....After Taxes
$10K..........10%........$1K........$9K
$100K........20%........$20K......$80K
$1M...........30%........$300K.....$700K
$10M.........40%........$4M........$6M
$100..........50%........$50M......$50M
$1B............60%........$600M....$400M
Once we have a Democratic Congress and president, and some reasonable campaign funding reform, perhaps we could get something along these lines. The middle class would see significant tax relief, thereby spurring on the economy, the national debt would be trimmed and the very rich would hardly notice the difference.
Tuesday, March 13, 2007
A Simple Answer to the Iraq Debacle
We hear able-bodied men in Iraq complain about conditions there, for which they blame our presence. Our politicians and pundits tell us that there are no good options. That consensus is wrong - there is a simple, effective way to make things right. It is conscription. Not that of Americans, as actually proposed by Democratic Congressman Charles Rangel, but of Iraqis. All males between the ages of say 16 and 60 would find themselves in the army or police force. Those out of uniform would be considered insurgents and dealt with accordingly. Civilian activities would be left to the women.
This does not mean that militias should be incorporated in whole. In fact there would have to be homogenization of the Iraqi armed forces by random assignment of personnel. The development of partisan cliques would be inevitable, and would have to be treated by repeated reassignments. This homogenization might also have to be extended to the police and even local governments.
Conscription is an extreme measure, but conditions in Iraq are extreme and sometimes extreme conditions call for extreme measures.
Coalition forces would act as military trainers and advisors.
Most of our men and women could be back home in a few months.
This does not mean that militias should be incorporated in whole. In fact there would have to be homogenization of the Iraqi armed forces by random assignment of personnel. The development of partisan cliques would be inevitable, and would have to be treated by repeated reassignments. This homogenization might also have to be extended to the police and even local governments.
Conscription is an extreme measure, but conditions in Iraq are extreme and sometimes extreme conditions call for extreme measures.
Coalition forces would act as military trainers and advisors.
Most of our men and women could be back home in a few months.
New Airport for San Diego County
Selecting A Site for a New Airport in San Diego County
The San Diego County Regional Airport Authority Board tells us that LAX "is not a long-term solution for San Diego." That being the case, and since the present system has been satisfactory, why not just build another LAX out in the desert? That certainly relaxes the need to be close to San Diego population centers and obviates any sort of high-speed transit such as maglev.
Maglev is unnecessary. In any case, it is too expensive, too disruptive and too slow. Security would be a real problem; it would have to be conducted at the maglev terminal. In order to avoid another check at the airport, the airport would have to be separated into checked and unchecked areas since some access would be by road.
We would get to the new airport the same way we get to LAX; we would fly there. In fact, with a little advance planning, we should be able to set up a county-wide system of flights from all our small airports: Montgomery, Brown, Aqua Caliente, Borrego Valley, Fallbrook, Gillespie, Jacumba, Ocotillo, Palomar and Ramona. In any case, Lindbergh would stay intact. It is essential to downtown access and our tourist industry and could continue to handle West Coast flights. We could add new fields near Miramar and other places. Taking advantage of new technologies for ATC, we should be able to make all this work. Getting to the new airport would be a lot faster and more convenient than with a maglev track with only two or three stations.
What kinds of planes would handle this local traffic? There are small planes, STOL aircraft, sky-scooters, air cabs, helicopters or whatever that could do the job. The smaller commercial jets, of 100 or so passengers from Lindbergh would be in the mix.
Funding for the new airport might come in large part, from our Indian tribes if they were permitted to build and operate casinos not too far from the passenger terminals. Slot machines inside the passenger terminal could be restricted to bars where one has to be at least 21. The politics of operating gambling off the reservations might not be insurmountable when the benefits are looked at. Any problems with sacred lands would also be eased. Other possible sources of funding are the developers of the airport infrastructure.
When we vote in November, it would help if the board would present us with a vision for the new airport, not just a location. What would we be getting? Airports necessarily have infrastructures. What would that look like? For example, consider the following. The airport has three runways about a mile apart running, of course east and west. The two southern-most are for commercial traffic and the passenger terminal is just south of those. The north runway is for general aviation and freight traffic. Going north from there are, in turn, the usual freight and general aviation facilities, warehouses, shopping malls, and then residential apartments, condos and detached homes. Going south from the airport are, in turn, the casinos, an amusement park, an RV park, a car racetrack and an ATV area. The board should be talking to all those involved in these operations, especially the Indian tribes.
Call it LAX II, Las Vegas West, Desert Disneyland, or whatever, it is a plan. If there's a better one let's see it. To gain voter acceptance, the board needs to present us with a vision, not just a designated site. This might seem to be outside their charter, but in order to select a site, the whole picture must be considered.
The San Diego County Regional Airport Authority Board tells us that LAX "is not a long-term solution for San Diego." That being the case, and since the present system has been satisfactory, why not just build another LAX out in the desert? That certainly relaxes the need to be close to San Diego population centers and obviates any sort of high-speed transit such as maglev.
Maglev is unnecessary. In any case, it is too expensive, too disruptive and too slow. Security would be a real problem; it would have to be conducted at the maglev terminal. In order to avoid another check at the airport, the airport would have to be separated into checked and unchecked areas since some access would be by road.
We would get to the new airport the same way we get to LAX; we would fly there. In fact, with a little advance planning, we should be able to set up a county-wide system of flights from all our small airports: Montgomery, Brown, Aqua Caliente, Borrego Valley, Fallbrook, Gillespie, Jacumba, Ocotillo, Palomar and Ramona. In any case, Lindbergh would stay intact. It is essential to downtown access and our tourist industry and could continue to handle West Coast flights. We could add new fields near Miramar and other places. Taking advantage of new technologies for ATC, we should be able to make all this work. Getting to the new airport would be a lot faster and more convenient than with a maglev track with only two or three stations.
What kinds of planes would handle this local traffic? There are small planes, STOL aircraft, sky-scooters, air cabs, helicopters or whatever that could do the job. The smaller commercial jets, of 100 or so passengers from Lindbergh would be in the mix.
Funding for the new airport might come in large part, from our Indian tribes if they were permitted to build and operate casinos not too far from the passenger terminals. Slot machines inside the passenger terminal could be restricted to bars where one has to be at least 21. The politics of operating gambling off the reservations might not be insurmountable when the benefits are looked at. Any problems with sacred lands would also be eased. Other possible sources of funding are the developers of the airport infrastructure.
When we vote in November, it would help if the board would present us with a vision for the new airport, not just a location. What would we be getting? Airports necessarily have infrastructures. What would that look like? For example, consider the following. The airport has three runways about a mile apart running, of course east and west. The two southern-most are for commercial traffic and the passenger terminal is just south of those. The north runway is for general aviation and freight traffic. Going north from there are, in turn, the usual freight and general aviation facilities, warehouses, shopping malls, and then residential apartments, condos and detached homes. Going south from the airport are, in turn, the casinos, an amusement park, an RV park, a car racetrack and an ATV area. The board should be talking to all those involved in these operations, especially the Indian tribes.
Call it LAX II, Las Vegas West, Desert Disneyland, or whatever, it is a plan. If there's a better one let's see it. To gain voter acceptance, the board needs to present us with a vision, not just a designated site. This might seem to be outside their charter, but in order to select a site, the whole picture must be considered.
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