Gas taxes and oil dependence
One thing the Saudis know they can count on is the inability of America’s politicians to fashion a policy that will reduce American dependence on foreign oil. Both president Bush and his challenger, John Kerry, promised to make America independent of foreign oil. So did Richard Nixon, Gerry Ford, Jimmy Carter, and Bush’s other predecessors. None could figure out how to accomplish that goal without raising taxes on gas and other oil products…
Bush’s predecessors couldn’t figure out how to do it without a tax increase because all those named (including the current Bush’s father) were fixated on the idea of taxing people so government could take the money in search of a solution. The current Bush on the other hand gets it when it comes to taxes and the law of unintended consequences. If any President in the last 40 years other than Ronald Reagan had hope of understanding that dealing with our dependence on the Saudis in the long run needs to be dealt with from the supply side, it’s W. Whether that supply side solution involves tax credits for domestic and non-OPEC production, direct subsidies to domestic producers or other tax advantages such as allowing producers to shield some of this years “excess” profits* with accelerated depreciation on new production capacity, there are lots of solutions that don’t involve increasing taxes.
(*I wanted to make clear that I don’t believe in principal that there is such a thing as “excess” profit in some sort of moral sense. I’m simply referring to the fact that some oil producers will have higher profits this year than in recent years because the price of oil went up so far, so fast and the excess income tax revenue from that increase is an unbudgeted extra. It seems to me that since any extra income taxes due to this were unbudgeted, allowing them to shield the income from taxation by investing in new production or refining capacity would be revenue neutral.)
Link to article came from Kevin who is definitely not responsible for the conclusions I drew from it.