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Sat Feb 2, 2013, 09:11 PM

The U.S. has some of the lowest energy taxes in the developed world



"Economists often argue that thereís an elegant solution to all the pollution caused by our energy use ó just tax the stuff.

<>

A well-designed tax on fossil fuels could, in theory, help curb wasteful use and allow society to recoup the damages wrought by, say, heat-trapping carbon pollution. Itís also a way to raise revenue. Thatís the argument, at least.

But when countries try to put this idea into practice, the reality is often much messier. A big new report from the OECD looks at how developed countries actually tax their energy use and carbon emissions. Here are three notable takeaways:..."

http://www.washingtonpost.com/blogs/wonkblog/wp/2013/01/31/how-the-world-taxes-fossil-fuels-in-three-charts/

Some great graphs at link, especially check out Carbon Taxes vs. Emissions

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Reply The U.S. has some of the lowest energy taxes in the developed world (Original post)
wtmusic Feb 2013 OP
RobertEarl Feb 2013 #1
happyslug Feb 2013 #2

Response to wtmusic (Original post)

Sat Feb 2, 2013, 11:56 PM

1. Forget a carbon tax

..it ain't gonna happen.

Gasoline is already highly taxed but we are using less so the general revenue is down and roads are more expensive than ever. Coal plants are closing because they are old, dirty and wasteful and less coal is being burned.

Try taxing the sun and the wind? Ha!

What does that leave us? Natural gas gets big welfare now. But the King of government energy welfare is: The Nuke.

Taxing Nuke seems to be our only option.

Hey wahddayaknow...Nukes are gonna save us! <sarcasimo>

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Response to wtmusic (Original post)

Sun Feb 3, 2013, 12:04 AM

2. The Swiss are on top? That about right, the last time I read, they still subsided horses.

Now that was in the last days of the Cold War, since the end of the Cold War (and the end of anyone trying to use Switzerland as a short cut to some place else), I do not know. I suspect the pack horses they kept in reserves were cut since the end of the Cold War. The Swiss phased out their bicycle troops in 2000 (The Swiss role for Bicycle Troops were for a Mobile infantry reserve to quickly move into any breech, again with the end of the Cold War the fear of an invasion decreased so general military spending was cut and so went the bicycle troops).

On the other hand the Swiss remember the hard time they had getting fuel from 1942 t 1945, due to the Germany and Italy controlling all routes into Switzerland and the US refusing to ship oil to any area under German or Italian control. In short the Swiss, while neutral, access to oil was limited in those years (Some oil was shipped to Spain, another neutral country, and then to Switzerland, but some of this oil was stolen by the Germans as it went through occupied France, till the Southern France was liberated by the Allies after August 1944 and the route to Switzerland was re-opened.

Europe also remember the Arab oil embargo of 1956 and 1967, they are film of long lines at European Gasoline stations after both embargo (Related to the British-French-Israeli taking of the Suez Canal in 1956 and the Six Day war in 1967). The US was NOT affected by either embargo for the US was a net oil EXPORTER at that time (i.e. the US made money by selling it oil to Europe at a much higher price then normal).

Europe also remembers that the Western Allies won WWI (Yes I am talking 1914-1918) with oil, for while the main transport was still horse drawn, trucks were becoming more and more important as the war went on (In fact when the Armistice was agreed to on 11/11/1918 the Allies demanded that Germany turn over all of its trucks, the Germans refused telling the allies they could NOT comply with any of the withdraw agreements in the Armistice without the trucks, thus the Germans kept their trucks).

During the Second World War, the German Army ran all over Europe till it ran out of Fuel in front of Moscow in December 1941. From 1939 to June 1941 the main source of Fuel for the German Army was Russia, so Hitler decided to invade it. From 1942 onward the Germans had to deal with a severe Fuel shortage, for example evey infantry division had to do with 10% of the fuel it had used in peace time (Think about that, you use more fuel in Combat then in Training for the training site tends to be close by, where actual war is fought is much further away). The German army relied on Trains and Horses (and had one Battalion of every infantry Division converted to a bicycle battalion, to be used much like the above Swiss bicycle troops, as fillers in any break in the battle line. For you non-army people out there, In the German Army of WWII, you had 12 battalions to a Division).

Fortunately for the Germans, while the Russians had access to plenty of fuel, they had a shortage of trucks. The Americans supplied them with trucks which made the Russian army more Mobile in the Summer (In the "Freeze" that preceded the Russian Winter, Winter itself, and the subsequent "Thaw" horse drawn wagons were preferred to trucks by both armies on the Eastern Front, due to the amount of mud during the "Freeze" and "Thaw" and the shortage of parts for the trucks due to closing of Russian ports due to icing up during the winter).

Thus Europe has a long history of NOT having ready access to oil, unlike the US which except for the Oil Embargo of 1973 and the Iranian Crisis of 1979 has never really seen a shortage of oil (Except for 1973 and 1979, the US has seen prices spikes, but no actual situation where you had gasoline stations without gasoline, even in 2008 as the price of Gasoline neared $4 a gallon in most of the US).

Thus Europe has had to deal with time periods without access to oil, much more then the US. Europe has dealt with that by making sure the price of oil was high, thus discouraged its use (Horses stayed on Western European streets as late as the late 1950s and early 1960s for example, horses were gone from US Streets by the late 1930s, came back during WWII, but then disappeared again by 1946).

Bicycles were used by Europeans to a much higher degree then Americans in the 1950s through today. The high price on gasoline encouraged even people who had a car to bike (And the high taxes on gasoline was used to subsidize mass transit, which permitted low fare and frequent service so that even people with cars would opt for mass transit over driving their car). All of this was to discourage people getting into the habit of using their cars for day to day activities, and thus reduce the amount of oil Europe needed to import in.

On the other hand the US kept its Oil Taxes low so that people could drive, and use their cars instead of bikes and mass transit. On the Federal Level this was done to make sure the oil producers of Texas and other states could maximize their profits. The Texas and other oil producing state's Congressmen would only vote for a tax on Fuel, to build highways so that people could drive they cars and thus use more oil. Furthermore they had allies in major cities who would gladly take Federal highway dollars to build highways to eliminate slums. The oil producing states Congressmen had no real objections to such use of Gasoline taxes for they saw it was increase use of oil (and then fought against any other use of the Gasoline taxes if it was proposed UNLESS it had something to do with increasing people's use of oil).

On the state level, many states prior to the 1964 US Supreme Court one man one vote ruling, had legislatures dominated by rural areas (many states had NOT re-districted for years so some states had many small population rural districts and then large population urban districts. In some states the difference was so bad that one rural vote was the same as 141 urban vote when it came to the State Legislature.

See One man One vote:
http://en.wikipedia.org/wiki/Reynolds_v._Sims

Thus from the 1930s till the 1960s in much of the US Rural Voters had more power in the State Legislature then Urban Voters. For this reason State Highway Departments would actually only build roads from the edge of major cities to the next major city, the cities themselves had to maintain the state highway as it went through their town. Thus in many states any STATE highway tax went to RURAL areas only. The above One Man, One Vote Ruling killed this rural domination of states with large Urban Populations, but from the 1930s to the 1960s those same states, under Rural Domination, concentrated on roads in Rural Areas only. This encouraged increase automobile use, AND given that most of the new suburbs were in "Rural Areas", highways were built in the growing suburbs, subsidize by gasoline taxes collected from urban areas,

Side note: In my Home State of Pennsylvania this prejudice continues to this day. Each county gets so much money from the State Gasoline tax. What each county gets relates to how much oil was purchased in that county in 1927. Rural electrification only occurred in the 1930s, so most of Rural Pennsylvania was still using Oil for Lighting in 1927. Right after WWI, the auto companies determined the two biggest growth areas for cars was in Rural America AND Upper Class Urbanites (90% of people living in urban areas were NOT presumed to want to exchange they streetcar service for an automobile, and that was true till 1946). Thus the greatest increase in oil usage in the US in the 1920s was in Rural America.

The chief reason for this market opening up, was the price of wheat and other farm goods jumped in the 1920s, due to the fact the US could export those goods to Europe. Previous to WWI, Russia had a large part of the European Wheat and Agricultural market, but with the Communists taking over in 1917, the rest of Europe refused to buy Russian Wheat, which saw the US, Poland, Argentina and Australian farming communities boom. The problem is this boom ended in 1927, when Stalin decided he needed foreign money to buy foreign machinery as part of his plan to modernized the Soviet Union. Stalin did this by dumping all the wheat he could collect from Russia and the Ukraine (Even if this cause famine in those areas). With that dumping of Russian wheat and the Start of the Dust Bowl, Rural America started the Great Depression early. Thus 1927 was Rural America highest use of oil compared to the rest of America in history. While Rural America oil usage declined from 1927 onward, urban America continued on its replacement of horses with trucks AND the growth of the first Auto Suburbs, even as the US entered the Great Depression.

All told, Urban America, and especially in Pennsylvania the percentage of oil used in rural counties declined when compared to urban counties and for this reason the Pennsylvania General Assembly started to use 1927 as its base year for the Subsidizes to the Counties, for it did NOT want to cut the subsidy to the Rural Counties. When Pennsylvania had to change its elections to reflect the One Man One Vote rule, it did so in Pennsylvania's 1968 Constitution, but the General Assembly continued to use the 1927 date base for by the late 1960s the urban areas wanted support for mass transit more then part of the gasoline tax and agreed to continue to use the 1927 ratio IF the state pays a subsidy to mass transit in its urban areas. Which the State has done ever since. Every so often someone ask why they have to pay for the subsidy, but everyone then ignore him for the above is to much to tell in a 30 second ad.


Now, if you read about the early streetcar lines in America, they were of two types, first was those built to connect "Trolley Suburbs" to the Central City and Interurbans that ran through rural areas to urban centers. Some times these two overlapped, but the "Urban" lines lasted a lot longer for the simple reason the communities they served and been built around them, often by the developer of the housing (i.e. to get people to buy housing in these trolley suburbs the developer had to show buyers that they could get to work, thus the need for a streetcar to the new suburb, both were built at the same time, much like today new highways are connected to new housing developments).

This practice continues to this day, but since WWII it is NOT streetcar lines that are built so that people can get to work from the new housing development but highways. New Communities are built, as part of that development new roads are built to connect the community to what ever is the nearest major highway.

Most local politicians rely on housing developers for financial support to get elected, thus local government is almost always for development. People who oppose development get no financial support and without money they stay unknown and don't get elected. People who support Development get financial support from Developers and use that money to keep their name in the public eye and keep getting elected. The biggest obstacle to development is the price of gasoline and developers oppose increase gasoline tax for that increase the cost of someone living in their new development. Since Developers oppose higher gasoline taxes, so do the local politicians they donate to. Thus on the local level you tend to have massive opposition to higher fuel taxes, with the exceptions of the inner cities. Given that most inner cities are overwhelming Democratic, the GOP cares less about them AND know the real fight is for suburban votes (Rural America tend to vote GOP). The Democratic Party knows this same fact and thus both parties tend to avoid having to raise gasoline tax for it means turning off local suburban politicians that they need to win suburban votes.

The above also covers a lot of State level elections, developers are less concerned about politicians at the State level (Most developers know the people who most affect any development is at the local level) but will donate to a State Legislature if they believe that is what is needed to further they development. This tends to affect Suburban politicians more then rural or urban politicians, but it is a factor is keeping gasoline taxes low.

On the State level rural politicians want to keep the fuel cost low for they can not see what are the other options, other then oil, when it comes to transportation in rural America. Horses and bikes are to slow given the distances involved, and the population density is to low to support any real mass transit option. Thus rural politicians tend to oppose any increase in oil taxes.

With rural and suburban politicians at the State and Federal level opposed to higher oil taxes, the urban politicians do not see the advantage to demand a higher tax on oil. This was complicated by the use of Federal Highway Funds and state matching funds in the 1950s through 1970s for urban renewal projects (i.e. build new limited access freeways right through low income housing areas). Urban areas today have a desire more better mass transit, but with no support from Suburban and Rural Politic ans, most urban politicians decide it is better to go after some of the money from highway taxes for the use of roads then to ask for money for mass transit (and this is complicated by the fact many states in the 1940s and afterward passed State Constitutional Amendments saying any tax on gasoline or any other "motor fuel" must be spent in highways only). Thus even urban politicians tend to NOT want to increase taxes on oil (Through this is changing as many older urban areas and going through gentrification with a lot of young people AND older Americans NOT wanting to live in suburban areas but in an area where they can walk to work and to shop).

Just a comment on why the US has the lowest taxes on oil, which is the main source of carbon today, while Europe has a much lower use of oil and thus Carbon.

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