My daughter asked me the other day why the birds couldn’t breathe. It took me awhile to figure out that she was talking about what’s going on in the Gulf.
We’re going on day 46 of the BP spill. So far, BP has tried robots, drilling a relief well, a contaminant dome, “Top Hat”, “Top Kill”, a riser insertion tube, the “Junk Shot” and two versions of “Cut and Cap.” None of the efforts have worked and oil continues to gush into the ocean at an estimated rate of 504,000 gallons per day (estimates actually range from 210,000 gallons per day to BP’s concession that it could be as high as 2.5 million gallons per day). PBS has prepared an interactive ticker so that you can see the magnitude of the estimates:
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The Obama administration has already sent a $69 million bill to BP for the government’s costs to handle this whole thing. It’s said to represent about 75% of the total bill so far. BP claims that their costs to date are nearly $1 billion – and their stock shares are plummeting.
It’s not a pretty picture all the way round.
When President Obama addressed the matter this week, he reiterated his desire for more clean energy options and less dependency on oil. He would not, however, rule out more offshore drilling. He emphasized that domestic oil production is important, one of a handful of political notes that he shares with Sarah Palin.
So yeah… massive oil spill, increased clean-up costs, regulations… As I hear these sound bites focusing on increased domestic oil production with more oversight from the government, I’m nervous. I do think that oil companies have been allowed too much leeway to make decisions that impact our taxpayers without any consequences. But increased oversight in political speak really means more costs. And the government just doesn’t have any money right now. Taxing the oil companies won’t help – the tax will just be passed along to consumers with perhaps a little mark-up for their pockets for good measure (a la the cigarette companies when the cigarette tax increased). Plus it will tick off the oil company lobbyists and we just can’t have that.
So where does that leave us? And then it hit me. For at least two years now, many in Washington have been clamoring for an increase in the federal gas tax. The federal gas tax hasn’t moved from its 18.4 cents per gallon mark in nearly twenty years. I can’t help but wonder if much of the posturing about costs right now isn’t another way of asking: is it time to raise the federal gas tax?
The federal gas tax was a pretty significant issue during the race to the presidency but efforts to both increase – and decrease – the tax went nowhere because it’s political dynamite. Folks don’t take kindly to tax increases without some compelling reason. A war thousands of miles away wasn’t enough. But an oil spill on our own shores? During peak beach season? That just might do it.
Before you fire off your nasty emails, I’m actually not making light of the oil spill. I’m being critical of the politics surrounding it. I simply fear the consequences of a rush to “fix” an imperfect system.
For the record, I’m not altogether opposed to a bump in the gas tax. In my opinion, it should at least keep pace with inflation (if it had, it would be 27 cents per gallon now) since the purpose of the tax is to maintain infrastructure – and the cost of supplies and labor sure go up. I’m just worried about the timing. When you make tax policy reactionary, it often comes across to taxpayers as ridiculous and irrational. This, for example, could become the “blame BP tax” instead of a thoughtful increase to support rising costs.
I will admit, however, that sometimes it takes *something big* to make taxpayers accept what is otherwise distasteful.
So, what do you think? Is now the time to raise the federal gas tax?
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