Home
In this issue

Jonathan Tobin: Defending the Right to a Jewish State

Heather Hale: Compliment your kids without giving them big heads

Megan Shauri: 10 ways you are ruining your own happiness

Carolyn Bigda: 8 Best Dividend Stocks for 2015

Kiplinger's Personal Finance editors: 7 Things You Didn't Know About Paying Off Student Loans

Samantha Olson: The Crucial Mistake 55% Of Parents Are Making At Their Baby's Bedtime

Densie Well, Ph.D., R.D. Open your eyes to yellow vegetables

The Kosher Gourmet by Megan Gordon With its colorful cache of purples and oranges and reds, COLLARD GREEN SLAW is a marvelous mood booster --- not to mention just downright delish
April 18, 2014

Rabbi Yonason Goldson: Clarifying one of the greatest philosophical conundrums in theology

Caroline B. Glick: The disappearance of US will

Megan Wallgren: 10 things I've learned from my teenagers

Lizette Borreli: Green Tea Boosts Brain Power, May Help Treat Dementia

John Ericson: Trying hard to be 'positive' but never succeeding? Blame Your Brain

The Kosher Gourmet by Julie Rothman Almondy, flourless torta del re (Italian king's cake), has royal roots, is simple to make, . . . but devour it because it's simply delicious

April 14, 2014

Rabbi Dr Naftali Brawer: Passover frees us from the tyranny of time

Greg Crosby: Passing Over Religion

Eric Schulzke: First degree: How America really recovered from a murder epidemic

Georgia Lee: When love is not enough: Teaching your kids about the realities of adult relationships

Cameron Huddleston: Freebies for Your Lawn and Garden

Gordon Pape: How you can tell if your financial adviser is setting you up for potential ruin

Dana Dovey: Up to 500,000 people die each year from hepatitis C-related liver disease. New Treatment Has Over 90% Success Rate

Justin Caba: Eating Watermelon Can Help Control High Blood Pressure

The Kosher Gourmet by Joshua E. London and Lou Marmon Don't dare pass over these Pesach picks for Manischewitz!

April 11, 2014

Rabbi Hillel Goldberg: Silence is much more than golden

Caroline B. Glick: Forgetting freedom at Passover

Susan Swann: How to value a child for who he is, not just what he does

Cameron Huddleston: 7 Financial Tasks You Should Tackle Right Now

Sandra Block and Lisa Gerstner: How to Profit From Your Passion

Susan Scutti: A Simple Blood Test Might Soon Diagnose Cancer

Chris Weller: Have A Slow Metabolism? Let Science Speed It Up For You

The Kosher Gourmet by Diane Rossen Worthington Whitefish Terrine: A French take on gefilte fish

April 9, 2014

Jonathan Tobin: Why Did Kerry Lie About Israeli Blame?

Samuel G. Freedman: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Jessica Ivins: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Kim Giles: Asking for help is not weakness

Kathy Kristof and Barbara Hoch Marcus: 7 Great Growth Israeli Stocks

Matthew Mientka: How Beans, Peas, And Chickpeas Cleanse Bad Cholesterol and Lowers Risk of Heart Disease

Sabrina Bachai: 5 At-Home Treatments For Headaches

The Kosher Gourmet by Daniel Neman Have yourself a matzo ball: The secrets bubby never told you and recipes she could have never imagined

April 8, 2014

Lori Nawyn: At Your Wit's End and Back: Finding Peace

Susan B. Garland and Rachel L. Sheedy: Strategies Married Couples Can Use to Boost Benefits

David Muhlbaum: Smart Tax Deductions Non-Itemizers Can Claim

Jill Weisenberger, M.S., R.D.N., C.D.E : Before You Lose Your Mental Edge

Dana Dovey: Coffee Drinkers Rejoice! Your Cup Of Joe Can Prevent Death From Liver Disease

Chris Weller: Electric 'Thinking Cap' Puts Your Brain Power Into High Gear

The Kosher Gourmet by Marlene Parrish A gift of hazelnuts keeps giving --- for a variety of nutty recipes: Entree, side, soup, dessert

April 4, 2014

Rabbi David Gutterman: The Word for Nothing Means Everything

Charles Krauthammer: Kerry's folly, Chapter 3

Amy Peterson: A life of love: How to build lasting relationships with your children

John Ericson: Older Women: Save Your Heart, Prevent Stroke Don't Drink Diet

John Ericson: Why 50 million Americans will still have spring allergies after taking meds

Cameron Huddleston: Best and Worst Buys of April 2014

Stacy Rapacon: Great Mutual Funds for Young Investors

Sarah Boesveld: Teacher keeps promise to mail thousands of former students letters written by their past selves

The Kosher Gourmet by Sharon Thompson Anyone can make a salad, you say. But can they make a great salad? (SECRETS, TESTED TECHNIQUES + 4 RECIPES, INCLUDING DRESSINGS)

April 2, 2014

Paul Greenberg: Death and joy in the spring

Dan Barry: Should South Carolina Jews be forced to maintain this chimney built by Germans serving the Nazis?

Mayra Bitsko: Save me! An alien took over my child's personality

Frank Clayton: Get happy: 20 scientifically proven happiness activities

Susan Scutti: It's Genetic! Obesity and the 'Carb Breakdown' Gene

Lecia Bushak: Why Hand Sanitizer May Actually Harm Your Health

Stacy Rapacon: Great Funds You Can Own for $500 or Less

Cameron Huddleston: 7 Ways to Save on Home Decor

The Kosher Gourmet by Steve Petusevsky Exploring ingredients as edible-stuffed containers (TWO RECIPES + TIPS & TECHINQUES)

Jewish World Review June 21, 2005 / 14 Sivan, 5765

That Slippery Old ‘Oil Tax’

By Michael Kinsley


Printer Friendly Version
Email this article

http://www.JewishWorldReview.com | Watching the House and Senate quarrel over which favored users and which alternative suppliers will get new subsidies and tax breaks in the energy bill ought to be a hair-tearing experience for anyone with a basic understanding of economics.

But at the Bush White House — where they care more for business than for capitalism — the only frustration is that all this is distracting from the important work of enacting new tax breaks for the traditional oil industry.

Three years ago, the price of crude oil was about $27 a barrel. On Friday, it was about $57 a barrel. The United States imports about 12 million barrels a day. Do the math. A $30-a-barrel price hike adds up to $360 million a day, or $131 billion annually. That's just the extra amount we're sending abroad because of recent years' increases. The administration has no problem in calling this an "oil tax" when it is trying to explain the middling performance of the economy. "Not our fault, folks. Forces beyond our control."

But this is not your ordinary tax, for a couple of reasons. First, the revenue from an ordinary tax goes into the U.S. Treasury, where there is at least a chance that it will be used in ways that benefit millions of Americans. The revenue from this tax goes to the treasury in places such as Saudi Arabia, where it will support the decadent lifestyles of a few hundred princes.

Second, the United States actually consumes not 12 million but 20 million barrels of oil a day. The other 8 million barrels come from domestic oil extraction. I say extraction rather than production because oil "producers" don't actually produce any oil. They just pump it from the ground. That can be difficult, costly and even dangerous work, and I don't mean to demean it. But drilling and extraction are only a small part of the current $57 cost of a barrel of oil.

In the case of OPEC members, the cost of extraction is infinitesimal. Yet they can extract $57 a barrel from the rest of the world for other reasons, including some that are definitely not beyond their control.

Domestic "producers" have higher costs. But they were profitably pumping away in 2002, when the price was $27 a barrel. Now that oil goes for $57 a barrel, most of the difference must be profit. Eight million barrels a day at $30 a barrel works out to $87billion a year. If the extra $131 billion we pay to foreigners is a tax, so is the extra $87 billion we pay to the domestic oil industry. And if that $87 billion is a tax when collected from consumers, it is in effect a subsidy when pocketed by domestic oil extractors.

Donate to JWR


And the tax and spend doesn't stop there. When oil prices go up, other forms of energy go up too. This includes alternative energy sources such as windmills, cow exhaust, whatever. They all benefit from a subsidy of $30-a-barrel-equivalent, financed by the "tax" on energy consumers of an equal amount.

So it is odd, from an economic point of view (though less so from a political one), that the energy bill debate should be over who will get even more subsidies. What we should want is more energy taxes, not subsidies. This has been a theme of those irritating people, "thoughtful moderates," since at least the forgotten John Anderson presidential campaign of 1980.

The centerpiece of that campaign was a 50-cent-a-gallon gasoline tax, which would have been "rebated" by a drastic reduction in the Social Security tax. The idea was not to raise revenue, but to affect behavior. That is still the right approach, though hopeless in today's political culture. The way to get people to use less energy is to make using energy more expensive. People can then adjust in an infinite variety of ways. (And, once again, you can give the money back in other ways.) Why should you care whether someone saves energy by not buying an SUV, or by buying it and driving it less? A so-called BTU tax, which taxes all energy sources equally, would be even better than a gasoline tax, but that plummets us way too deeply into policy wonkery.

The point is that we are already paying this tax, only the money is going to foreign countries and to George W. Bush's petro-pals. As it happens, the price of gasoline has gone up just about 50 cents a gallon since 2002. That's a lot less in real terms than 50 cents was back in 1980. But still: What if a visionary president and Congress had slapped on a 50-cent tax in 2002? That might well have reduced demand, and impressed a jittery world, enough that gas prices today would be lower than they are even including the tax.

It's called market forces. These Republicans ought to read up on it.

Every weekday JewishWorldReview.com publishes what many in in the media and Washington consider "must-reading". Sign up for the daily JWR update. It's free. Just click here.

Michael Kinsley is Los Angeles Times Editorial and Opinion editor and former editor of Slate.com. Comment by clicking here.



Archives



© 2005 Los Angeles Times Distributed by Los Angeles Times Syndicate

Columnists

Toons

Lifestyles