5 dollar gas...are we ready?

[Kepler]

Re: 5 dollar gas...are we ready?

I got in a discussion with someone about highway spending. I said we should raise the federal gas tax from $.18/ga to $.30/gal since it isn't indexed for inflation and hasn't increased since 1993. He said we can't do that since it'd hurt Jane Doe, the single mother with 2 kids who can barely afford to get to work.

Fine, I said, let's just raise income taxes instead. Nope, that was a non-starter. It had to come from the waste in the discretionary spending account. Of course, he couldn't tell me where this mythical waste was or how it was going to fund not only our highways but increased mass transit, too (he's all for mass transit, but not out of any new taxes - shocking, I know).

I'm sure he also wouldn't means test entitlements because "that's my money, earning interest," and he won't uncap payroll taxes because "that would be unfairly burdening the investment class."

That guy is everything that's wrong. He should get a medal or something. I love when people say "we'll just trim the fat." They may as well say, "well, I'm out of ideas..."

 

[Bakunin]

Re: 5 dollar gas...are we ready?

If you means test the benefit side, you shouldn't have to uncap payroll taxes.

 

[Kepler]

Re: 5 dollar gas...are we ready?

If you means test the benefit side, you shouldn't have to uncap payroll taxes.

Why not do both? In fact, why not just do away with the whole concept of "payroll tax" or "capital gains tax" and make everything income tax?

As we've said, the goal can't just be a zero balance. We have to run large surpluses for a very long time to pay down the debt. We've shown we know how to run a 30% deficit. Let's see a 30% surplus. Imagine the US economy unburdened by any debt.

 

[Bakunin]

Re: 5 dollar gas...are we ready?

Why not do both? In fact, why not just do away with the whole concept of "payroll tax" or "capital gains tax" and make everything income tax?

Yes, and as long as we're indulging ourselves in this fantasy, let's also scrap all credits and deductions. It'd certainly be interesting to see where the rates would be set in such a system to break even compared to the way we are currently handling it.

And attempting to get massive surpluses is something this electorate simply won't bear - the level of cuts and increased taxation necessary to accomplish that would cause both the left and right to riot.

Personally, I'd be satisfied if we turned the current debt level into the equivalent of a 30 year mortgage (but even *that* is probably out of reach with the people we have in charge).

 

[Kepler]

Re: 5 dollar gas...are we ready?

Yes, and as long as we're indulging ourselves in this fantasy, let's also scrap all credits and deductions. It'd certainly be interesting to see where the rates would be set in such a system to break even compared to the way we are currently handling it.

We pay about 15% of our tax bill in debt service right now, correct? So zeroing the debt would result in a defacto 15% income tax reduction across the board. My home mortgage interest deduction is nice, but it aint THAT nice.

My version of "fair tax" is to have 100 marginal tax brackets. All income is included, no deductions, no exemptions, no distinctions.

Say the 99th percentile of income is, I dunno, $15,000. That means the first $15,000 should be taxed at 1%. If the 98th percentile is $17,000, then income between $15,000-$17,000 is taxed at 2%. And so on to the top. If the 2nd percentile of income is $1,000,000 and the top percentile is $2,000,000, then income between $1,000,000 and $2,000,000 is taxed at 98% and over $2,000,000 at 99%.

The question then become, what's a percentile -- the number of earners? I think even better (and fairer) would be the total value of earned-dollars. So, take all total income, T, in the United State. Start aggregating from the first dollar of each earner across the full population. Go up dollar by dollar and keep adding to the provisional subtotal, S. When S = T/100, that's the dividing line for the 1% tax bracket. Continue upwards to the top.

A continuous function with continually varying rates all the way down to 10 or 20 significant digits would be even better. I'm sure some fluid dynamics engineer has that figured out for how high pressure oil pipelines work. (Ouch. Too soon?)

Fiat lux.

 

[Bakunin]

Re: 5 dollar gas...are we ready?

If you set the top rates that high, I'm guessing people who would be subjected to them would relocate to avoid paying them (even Europe has lower rates than that ).

The idea is to get people to pay more without driving up the cost of being here so much that they want to live in another country (and given the fact the ultra rich are the most mobile group on the planet, they could very easily do that).

 

[MinnFan]

Re: 5 dollar gas...are we ready?

As an aside to this thread: I just saw a volt filling up (with gas) at the local station. Thought that was kind of funny.

 

[aparch]

Re: 5 dollar gas...are we ready?

As an aside to this thread: I just saw a volt filling up (with gas) at the local station. Thought that was kind of funny.

Uhh, they do use gas, you know.

It runs a gas generator to power the car when the batteries die. Also, the gas generator will kick in to give a little extra oomph when accelerating quickly. The batteries will go for 50-80 miles, the gas generator kicks in for the next 250 or so miles.

I'd like to get one, but the 40k sticker is WAY out of my range for now.

 

[amherstblackbear]

Re: 5 dollar gas...are we ready?

Uhh, they do use gas, you know.

It runs a gas generator to power the car when the batteries die. Also, the gas generator will kick in to give a little extra oomph when accelerating quickly. The batteries will go for 50-80 miles, the gas generator kicks in for the next 250 or so miles.

I'd like to get one, but the 40k sticker is WAY out of my range for now.

To be fair, $32k after tax incentive. Which is still nutso. The thing could use better economies of scale.

That said, do you really want to own a Volt?!? You know how much it costs to replace a laptop battery. Wait 'til you replace a Volt battery Those things are meant to be leased. That's where the deals are (if there are any).

 

[state of hockey]

Re: 5 dollar gas...are we ready?

This coupon is redeemable for one gallon of gasoline:

Ridiculous.

 

[aparch]

Re: 5 dollar gas...are we ready?

To be fair, $32k after tax incentive. Which is still nutso. The thing could use better economies of scale.

That said, do you really want to own a Volt?!? You know how much it costs to replace a laptop battery. Wait 'til you replace a Volt battery Those things are meant to be leased. That's where the deals are (if there are any).

True about the lease. That likely would be the best option.

And who needs to replace the battery... it'll run off the gas generator. Though losing that extra 50 to 80 mile boost of not using gas would suck.


I do feel that GM got it right with this one. I'd feel safer being able to have a little bit of giddy up and having over a 50 mile range versus the Nissan Leaf.

 

[unh_hockey]

Re: 5 dollar gas...are we ready?

Further news that might suggest gas eclipses 5 $ per gallon. over 6 states hit 4 $ per G, and NH is at 3.99 for 93 ( in Merrimack). Its only a short time before we get there.

http://www.zerohedge.com/article/jp...uction-story-sees-crude-spiking-over-130-june

Someone posted an article back in 08 about how the prices of oil flowed through the market. I would like to see that again so I can make more sense of it. Admittedly, this whole thing makes vague sense to me now.

Many people see electric cars as a bet against high gas prices, but I think that this mindset has persisted since our grandparents days. For one thing, battery technology hasn’t improved a whole lot and is still expensive with a low energy density. Reliability , especially with the Tesla roadster is a huge issue, even though things like that get worked out during production and new engineering cycles ( again alfablue can correct me and add to this as the resident expert). Lastly, the cost keeps them out of range for most Americans.

What I can’t get my head around is the Lifecycle of an electric car. People thing that consuming electricity from a wall is somehow different than relying on dirty fuels. 40% of that juice going into your clean Roadster is coming from coal. That’s worse than oil ( by todays political standards). What’s more is that to mine the rare earths required for the batteries, one needs a good deal of energy to transport the material. Even worse, we all know that china has a stranglehold on most of the rare earth markets - OPEC on the other hand produces roughly 30% of the US’s petroleum.

Oh and Americans…get out of your SUVS. Those things are still all over the place, as if 2008 never happened. I really hope 5 dollars purges the roads of these things and hurts those short sighted idiots enough so that maybe the whole SUV market just goes away. Go to Europe. See how small the cars are there. As for me, I will probably be walking to work in 5 weeks or so, having only to rely on my car to drive me to ice hockey. It will be sweet. My next car will be the Diesel Subaru legacy which gets 50 mpg w/ an 800 mile range….but isn’t released in the USA yet = ( thank you very much EPA. I hope your funding gets cut.

 

[FlagDUDE08]

Re: 5 dollar gas...are we ready?

I have oil/gas trust shares, and am reaping in the cash distributions. Bring on the gas prices, oil corporations are paying for them.

With all this complaining about oil companies making record profits on Wall Street (I realize there isn't much of that on here, but I hear it from some of my other friends and feel a need to vent, why not use the connection I made), it makes me wonder why more people aren't just putting a few cents away each day and then investing it. A penny saved is a penny earned, and I may as well put it to good use.

 

[unofan]

Re: 5 dollar gas...are we ready?

40% of that juice going into your clean Roadster is coming from coal. That’s worse than oil ( by todays political standards).

Environmentally, sure. Geopolitically? Not even close. We're the Saudi Arabia of coal. Instead of tankers from the Middle East or pipelines from Canada, we get it on trains from Wyoming. And it's still easier to control and regulate a large single source emitter like a coal plant, than hundreds of thousands of moving internal combustion engines.

What’s more is that to mine the rare earths required for the batteries, one needs a good deal of energy to transport the material. Even worse, we all know that china has a stranglehold on most of the rare earth markets - OPEC on the other hand produces roughly 30% of the US’s petroleum.

Geologists already discovered one of the world's largest rare earths deposits in BFE Nebraska. Assuming rare earths continue to rise in price and/or become a national security concern, a mining operation will open up sooner or later. And there's probably a UP line nearby already to aid the shipping of that, as well.

 

[unh_hockey]

Re: 5 dollar gas...are we ready?

Environmentally, sure. Geopolitically? Not even close. We're the Saudi Arabia of coal. Instead of tankers from the Middle East or pipelines from Canada, we get it on trains from Wyoming. And it's still easier to control and regulate a large single source emitter like a coal plant, than hundreds of thousands of moving internal combustion engines.

I was talking only from the strip mining/ by products concern. Logistically, its simpler due to proximity - as you said. talks of carbon sequestration programs ( think a pipe going into the ground instead) are underway, but those wont go anywhere. Coal will always be bad for the environment, but cheap and readily available.



Geologists already discovered one of the world's largest rare earths deposits in BFE Nebraska. Assuming rare earths continue to rise in price and/or become a national security concern, a mining operation will open up sooner or later. And there's probably a UP line nearby already to aid the shipping of that, as well.



China has already shown that they will cut suplies as they see fit. if this is true, it gives us some room. However, given the current supply - china has anywhere between 95-99% of that market, and 0-5% in Argentina and other places in south america. It might be a good time to cowboy up on emerging exploratory mining company stock

With all this complaining about oil companies making record profits on Wall Street (I realize there isn't much of that on here, but I hear it from some of my other friends and feel a need to vent, why not use the connection I made), it makes me wonder why more people aren't just putting a few cents away each day and then investing it. A penny saved is a penny earned, and I may as well put it to good use.

Agreed, the average person complaining is very counter productive. I feel this thread, in a way, its a good dialogue of what is happening, and has some information on what one can do to take responsibility upon themselves to deal with higher gas prices. While society must change as a whole, this process will be slow and reactionary. The astute individual on the other hand can change quicker, and maybe even make a few profitable investments if they have the acumen and time to do so.

 

[amherstblackbear]

Re: 5 dollar gas...are we ready?

40% of that juice going into your clean Roadster is coming from coal. That’s worse than oil

Well, yes and no. Setting aside the domestic coal v foreign oil angle (which is real), it doesn't necessarily follow that an electric vehicle running on coal-generated power is more pollution-intensive than a vehicle with a gasoline engine. Too many other variables.

Other random thoughts:

I agree with the larger point. Electric advocates do have a tendency to forget about where electricity comes from, or how large batteries are disposed of.

On the flip side, electric opponents also tend to overstate the battery capacity critique. Almost noone refuels their gasoline powered vehicle on a daily basis. This comes with the territory with electric. Electric cars will never replace gas cars unless there are dramatic improvements in battery performance, granted. But there are a lot of people in urban areas who drive less than 30 miles per day. If you could have a battery that provided, say, a 75-mile range, there would absolutely be demand (GM wasn't that far off with the EV1, and that was 10+ years ago).

 

[Kepler]

Re: 5 dollar gas...are we ready?

The magic of carbon-based fuels is energy ROI, right: the output-to-input ratio is highest with carbon because of molecular structure. How does coal compare to oil in that regard? How do nuclear and solar compare with present technology?

Edit: God bless the internet:

Dark green is the base EROEI, light green is variation under limited circumstances / industry-claims.

Caveat: this is from a site called "www.woodheat.org," so it isn't a surprise that firewood comes out looking good.

 

[FlagDUDE08]

Re: 5 dollar gas...are we ready?

Agreed, the average person complaining is very counter productive. I feel this thread, in a way, its a good dialogue of what is happening, and has some information on what one can do to take responsibility upon themselves to deal with higher gas prices. While society must change as a whole, this process will be slow and reactionary. The astute individual on the other hand can change quicker, and maybe even make a few profitable investments if they have the acumen and time to do so.

You're absolutely correct. In an economy like this and prices being inflated, you have to do whatever you can to make ends meet. I know for me, I eat out much less; packing a couple sandwiches instead of buying from a cafeteria or a take-out location means I pay $2 a week for lunch instead of $20. However with the $18 I save, invest part of it and use the rest to pay other debts (let's face it, RPI was expensive). Find anything that is going on and use it to your advantage. Because of technology, Wall Street is so much more accessible to the common individual than it had been previously; all you need is a computer and some cash in a bank account. In speaking of bank accounts, get ones with interest yields. There's one that advertises on this site and has probably one of the highest rates available; heck, you're supporting this site as well by clicking on it. It's just like those Travel Channel specials I see about using coupons in Vegas (though I highly doubt people would be gambling all that much), and the moral you learn from watching it: The money's out there, you just have to go out and get it.

Has anyone started coupon clipping because of the gas pinch?

 

[winger]

Re: 5 dollar gas...are we ready?

Very intersting topic.

1-When gas hits 5 dollars, will major business sectors see contraction? How fast? Will it effect our short term economic growth?

My business would see the effects of gas prices as it did in 2008, but as opposed to working on the govt planning side of public transportation now I work for a private operator of public transportation.

The funny thing about when gas prices jump up like that, is that the public authorities that have to respond to the crush of new riders can't respond, either because of lack of funds (which ironicly take a plunge because the bulk funding from public transportation comes from gas tax dollars) or resources (companies can only turn out buses so fast, and with federal funds you have to by equipment made in the USA....i have other arguments for that).

So our public transportation business would see an increase in ridership, but they may end up (as in 2008) cutting service to pay for the increased fuel fees. I used to work with a transit authority with a really bright transit administrator and he managed to weather the storm of 2008 without cutting service (well we used it as an excuse to cut a really stupid route, but the intial intention was to put that amount of service on sat nights). The core of his service remains intact, and that would be the exception for the state of massachusetts (which is also f'ed up because all the RTA (minus the MBTA) are paid in arears....so they have to take out a loan to run the service. And in finacial difficults the state often comes back to them, after the service has been run to say the number of dollars they said they would give them, is actually less!!!***!~)

But I work for a big corporation now, we also have on demand services, taxis, airport shuttles, shared ride vans. They would likely take a hit.

Your food doesn't.

You know what is funny, I buy most of my meat from grass fed, local farmers. My meat has not increased at all, and maybe it is a delayed effect, but I saw how much beet cost at the grocery store and I was shocked! I have also been a member of a CSA for going on my 4th year. For 20 bucks a week I get about all the veggies I can eat for a week, and this particular one delivers! So I personally havent noticed the prices in my food, but I have noticed stuff at the grocery store jump (because it is winter and i have to get my veggies there). So I try to buy more seasonally, and I will prob look to do more canning this year. But really I was sort of heading that route anyways.

I know I wouldnt want to pay $8 a gallon for gas, but there is something to be said about having the gas prices not being so voliatle that the money we use from the gas tax can actually be planned appropriatly for both highway/road projects and public transportation and even improving bicycling and walking options (of course i want to see it all go to public transportation)

You're absolutely correct. In an economy like this and prices being inflated, you have to do whatever you can to make ends meet. I know for me, I eat out much less; packing a couple sandwiches instead of buying from a cafeteria or a take-out location means I pay $2 a week for lunch instead of $20. However with the $18 I save, invest part of it and use the rest to pay other debts (let's face it, RPI was expensive). Find anything that is going on and use it to your advantage.

Has anyone started coupon clipping because of the gas pinch?

You know what is funny, I had been clamping down and on a serious budget for about a year now. I moved out of my apartment that I was living by myself in, to a house with a roomate. Granted I travel alot for my job, so right now it didnt seem like the best use of my money. I did increase my work commute from 2 miles to 7, I know stop my whining. But because I clamped down my budget so much (trying to pay off a sizable student loan in 3 years), I have the room to absorb the increase fuel costs. Plus my new place is right near my gym, so i think overall my weekly mileage hasnt changed much, and now that it is getting nice out, i sometime ride my bike to the gym.

Very interesting thread...thanks for starting it!

 

[bigblue_dl]

Re: 5 dollar gas...are we ready?

I paid $4.15/gal for 32 gallons of diesel yesterday, I didn't die, or even go broke. I think I'm doing ok.

Also, I want to know why my Wrangler is only worth $2000 when Brent's is $10k! My Wrangler would pound the **** out of Brent's!