Wednesday, June 25, 2008
The Ne Green Revolution
Saturday, June 21, 2008
China cut gasoline subsidies
If you ever visit China, you'll probably land in Beijing or Shanghai. Both are booming metropolises w/ huge and inreasingly middle class population. Yet one look at their roads you will be able to tell the difference. Beijing streets are vast traffic jams filled with noxious fumes, while Shanghai roads are mostly populated with smooth-running clean buses and very few private cars. The reason? In Beijing, you can get a private car license for $10, while in Shanghai, it costs hundreds to thousands of dollars.
The Libertarian ideal says that the government is ideally small and little involved. Yet there are cases that government taxation make a critical difference in the pattern of market behavior, for better or for worse. Taxation on car licenses and gasoline is one of these.
Sunday, June 15, 2008
Betting on Spain Updated...
Here's the gasoline price he gave me:
1.2 Euro/Gallon = $6.8/Liter
This is lower than gas prices in England, France and Germany. Yet Spain is the first to strike over gas tax. What does that mean?
Friday, June 13, 2008
State taxes on Gas
Highlights below:
- State gas taxes average $.28/gallon. 10 cents more than the federal tax $.18/gallon, which McCain proposes to do away with
- Some states like Washington, levies a fixed dollar amount on gas per gallon; these states faces a revenue shortfall, as people cutting back on gas consumption
- Some states like California, levies a percentage on gas sales; these states get an unexpected windfall of gas revenue
- Some states are moving to reduce gas tax: Georgia
- Other states are moving to hike gas tax: Minnisota (of the collapsed bridge fame), Florida, North Carolina and West Virginia, Kentucky and Maine, Connecticut and Nebraska
Betting on Spain
In fact, to be fair, I'd wager the Spain is in the lower range of major european countries in terms of gas tax: England, Germany, France, Italy, Spain (Maybe others? I don't know which other European economies are major). The $100 wager will go to a charity specified by the winner.
Thank you.
If this is what they do w/ our money...
Sunday, June 8, 2008
Guest Contributors Email Me!
Gas Price at $4 per gallon now
Congress' proposal of a complicated carbon tax is a hidden way of taxing gasoline. But it does not go all the way, and its complication is itself an invitation for corruption. Worse once put into execution, if it does not work, it's hard to roll back. A simple gas tax hike (rolled out over several years), with corresponding public transportation/alternative energy investment and income tax rebate, will do a much better job.
Friday, May 23, 2008
Oil Market Is NOT a Free Market.
So, after 30 years, the smartpants in the House finally realized that OPEC is a price fixing cartel. And when are the free-marketers going to figure out that a market where the OPEC calls the shot is NOT a free market?
To get a free market, you got to destroy OPEC first. I can't repeat this enough: OPEC must be destroyed. Whether by sueing OPEC or by banding up with fellow oil consumer nations, I do not care. Consumers have consumer advocates, it's time that oil consumer nations work together to safeguard their own rights.
Sunday, May 18, 2008
"...No one ever really does anything about it"
George Bush went begging Saudi Arabia and was rightly rebuffed, but it will be Americans like LaFave will one day turn the supply/demand table. They will not care if gas price goes up to $10/gallon, or if Saudi Arabia falls off the face of earth, they will be glad that they get to spend their gas money anywhere they liked.
Wednesday, May 14, 2008
In this era of farm subsidies for $1M/year farmer families and 2 out of 3 presidential candidates proposing gas tax holiday, there's this one guy who dares to buck the peer pressure and say the obvious. Good luck to him and I mean it!
Saturday, May 10, 2008
Gasoline Price Level vs Volatility
The answer is no. Here's why: business will always try to pass the gas price hikes to consumers, whether that price hike is due to OPEC's manipulation, speculator's bidding frenzy or government taxation. What business really care about is not the level of gas price, but the volatility of gas price.
If a business has an Oracle that tells him, that gas price will stay at $10 +/- 10% in the next year, he will devise a strategy based on this number, decide how much product to manufacture, how much inventory to carry, how many delivery trucks to deploy, how many people to hire, and ultimately, the price he's going to charge. He has certainty at least about one thing, gas price, and it's valuable.
If on the other hand, a business has no such Oracle, the price of gas can double or half in a year. Then he'd have to guess: if he guess too low, he ends up charging too little, losing money if gas prices skyrockets; if he guess too high, he may charge too much and then lose customers to competitors who may have guessed better or may have just lucked out. Look at GM and Ford with huge inventories of SUV and other gas guzzlers sitting unmoved in the lot. Gas prices moved on , so Americans passed them by.
So when untaxed gasoline prices in America moved from $1.5 to $3.7, the heavily taxed gasline prices in Europe only moved from $6 to $8/gallon. In absolute terms, European businesses are paying more. But in relative terms, their businesses are better positioned strategically and can better absorb this hike.
Friday, May 9, 2008
Income Tax or Gas Tax? Your choice!
So let's say they are right, they do pay $5/gallon, but instead they start paying it now, with 30% of $5 going towards gas tax. So how much are we talking about?
Americans consume 140B gallons gas a year. So gas tax revenue comes at $200B. This is enough for an income tax rebate for every American of $600. Or it can be used as public transportation credits and investment, energy conservation credits and green energy credit.
Now if Americans are willing to pay the European rate of $7-8 starting today. Gas tax revenue becomes $400B. That's enough for income tax rebate of $1200. And if Americans are willing to pay $10/gallons, gas tax revenue becomes $800B, almost enough to give an income tax holiday for lower/middle class Americans for a whole year.
Interestingly, there are already talks of $10/gallon. People increasingly expect it, the only difference is you will be paying the $10 all to OPEC and refiners, and still have to pay Uncle Sam. You do the math.
Sign our petition if you would like to see our gas tax hiked
Thursday, May 1, 2008
A Real Stretch
A new bill would cut the 51-cent-a-gallon ethanol subsidy to 45 cents, according to news reports. Farmers who make up to $2.5 million are eligible for subsidies, but the bill would drop eligibility to $1 million or less.
Tom Buis, president of the National Farmer's Union and a former corn farmer from Indiana, defended farmers before the committee.
"Everybody seems to be wanting to blame the farmer for everything bad happening in America and around the world," said Buis. "Some people think that profit should be a dirty word only for American farmers."
- YaoYao: Profit is not a dirty word. But profit on the back of a massive taxpayer subsidy by people earning more than $1Million a year, is dirty.
Corn farmers have been blamed for everything from the rising price of beer in the United States to pasta riots in Italy, Buis said. But, he added, half of all corn is used to cattle feed and much of it is used for soda syrup.
"To make the equation that corn is taking food out of people's mouths is a real stretch," Buis said.
- YaoYao: Right, so the cattle aren't destined for people's mouths either. The price of both meat and grain are shooting up because corn is planted instead of other grains, and corn ends up as ethanol. The real stretch is this man's believability
Alternative Universe Of Europe
Relevant quotes here:
"Out of 155 countries surveyed, U.S. gas prices were the 45th cheapest...
As of late March, U.S. gas prices averaged $3.45 a gallon. That compares to over $8 a gallon across much of Europe, $12.03 in Aruba and $18.42 in Sierra Leone."
"But those cheap gas prices - which Americans have gotten used to - mean they feel price spikes like the ones we're experiencing now more acutely than citizens from other nations which have had historically more expensive fuel.
Cheap gas prices have also lulled Americans into a cycle of buying bigger cars and bigger houses further away from their work - leaving them more exposed to rising prices, some experts say.""Revenues from Europe's high gas taxes are used to fund a variety of things. One thing they have built is better public transportation"
"Europe's stronger social safety net, including cheaper health care and higher education, is paid for partly through gas taxes"
"Oil use in the United Kingdom has basically stayed flat from 1980 to now, while in France it's dropped 17%, according to figures from the Energy Information Administration.
In the U.S., meanwhile, oil use is up 21% over the same period, although the country has added more people and seen its economy grow slightly faster."
Wednesday, April 30, 2008
The Original Clean Energy Bill Voting Record 1/2007
"Vote 40: H R 6: This bill would repeal tax cuts to oil companies and mandate that they pay a fee to remove oil from the Gulf of Mexico. It would also fund renewable energy programs. The act would repeal a tax break that oil and gas firms received in 2004. That break effectively lowered their corporate tax rates. It would also bar oil companies from bidding on new federal leases unless they pay a fee or renegotiate improperly drafted leases from the late ‘90s. Those leases did not require royalty payments on Gulf of Mexico oil production. Oil firms would pay a “conservation fee” for oil taken from the gulf.
Additionally, the bill would set aside an estimated $13 billion to $15 billion in revenues over a five-year period for tax breaks relating to renewable energy sources, according to The Washington Post.
The bill was designed to reduce the United States’ dependency on foreign oil by investing in alternative energy sources. However, critics say it actually would decrease domestic oil production so the country would rely more heavily on imported oil.
The House passed the bill on Jan. 18, 2007, with a vote of 264-163. All House Democrats except one favored the bill. They were joined by 36 Republicans. The Senate must debate the bill.
The Washington Post reported that the Bush Administration opposed repealing the tax break for oil companies when other manufacturing industries benefited from the 2004 reductions. It also frowned on forcing companies to renegotiate their Gulf of Mexico leases"
Here's WashingtonPost breakup of votes by party:
Party | Yes | No | Not Voting | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Democratic | 228 | 4 | 1 | ||||||||||
Republican | 36 | 159 | 7 | ||||||||||
Total | 264 | 163 | 8 |
Votes are mostly by party lines. Here's the list of the congressmen who voted "No" on this bill.
Democrats:
Republicans:
Obama earns my respect
1. Americans essentially get a gas tax rebate under her proposal vs Americans get a gas tax hike but a general tax rebate (or specific energy conservation tax rebate) under my proposal. Demand for gas will be stimulated under her proposal vs suppressed under mine.
2. Refiners are free to hike prices any how to make up for the windfall tax. While OPEC is not affected and can hike prices more because of increased demand for gas.
Now if Obama comes out to actually want to hike gas tax or start OPIC organization, he will get my vote too.
Monday, April 28, 2008
Tax My Gas, Please!
Let me try to get his logic correctly. We Americans are addicted to oil (as the Liar-In-Chief pointed out, not lying for once), so Senator McCain will kindly give us a Gas-tax-free summer so that we can become more addicted, until of course the OPEC or the refiners decide to take that 18cents government put up for grabs and put it into their own pockets instead. After all, it's clear that the public could afford that same 18 cents before and the demand for gasoline is inelastic in the short term.
But why stop with oil? Why don't we give smokers a cigarette-tax holiday or drunks a liquor-tax holiday? Heck, how about Senator McCain give drug addicts a legal-drug holiday at the same time? Aren't these Senator McCain's constituency too?
Ok, I got it. Gasoline is essential to our daily commute, to the American economy. It's the sworn duty of every politician especially every self-respecting candidates to attempt silly antics in the name of making this American addiction more affordable to his constituent addicts. One day McCain proposes Gas Tax Holiday, the next day more democratic congressmen try to talk America's dearest allies into cutting oil price by threatening they will block American Arms export deals. I'm sure the middle-eastern drug-cartel king, Oops, Saudis are losing sleep about it.
If Americans really want gas prices to come down, there's one way to make it happen for sure.
That one way is not complicated, it will not add to national debt (not that the congress really cares about it, but the taxpayers will care, one day). But it requires sacrifice across board, painful adjustments. Americans were ready to sacrifice after 9/11, but their LIC told them to go shop (bigger cars, bigger houses, bigger energy bills), and then go to Iraq. Now Americans do not want to sacrifice any more, they still have to pay.
What is that one way? Well, instead of lowering gas-tax, raising it; double it, triple it, better ten-times it, make it $1.80 instead of $.18; put a 30% sales tax on gas, the revenue from gas goes to train, public transportation, energy conservation investment, alternative energy investment, R&D on hybrids, electric and hydrogen cars, even given back to consumers ( or manufacturers) as energy conservation (R&D) tax credits. Better yet, the world's biggest oil importing Nations, USA, EU, China, India, Japan join in this effort, forming the new cartel OPIC (Organization of Petroleum Importer Countries). Gas prices will be higher immediately, but within 1 year, gas prices will come down and come down permanently.
You say, 1 year is surely not long enough to see results from our investments. You are right, but 1 year is long enough to change habits of a nation, and send a message to our OPEC friends (as our LIC never tires of saying). This message reads like this: OPEC is no longer the only cartel in town. It can cut production manipulate prices all it wants, but the golden goose will just die faster (accelerated with the help of us the OPIC), for once oil demand fall, it will fall permanently. And when the demand falls, the price follows.
Will this work? if any of the candidates has the guts to put this to test, he/she has my vote.