We Needed A Big Gas Tax

Read the following article. Makes you wonder why our government didn't
really tax the hell out of fuel during the 90's and use the proceeds to
lower other taxes or to fund quality programs.


---
At nearly $3 a gallon, gasoline prices have become a nightmare for many
Michigan consumers in recent days.

But not everyone is ready to start boycotting gas stations. In fact,
some residents are far less concerned about the current levels than
people who experienced problems such as gas rationing that arose
following the oil shocks of the 1970s.

"Higher gas prices don't affect me in terms of what I do or where I
go," said Curtis Foreman, owner of Foreman Construction LLC in Oak
Park.

The 34-year-old Foreman, who spends several hours a day on the road for
work, has a Ford F-150 and a Ford F-250 Turbo Diesel he uses for work
that he fills up regularly. But gas isn't something he worries about
too much. And he's not alone.

Experts agree that the U.S. economy is far less susceptible to energy
shocks, particularly sharp increases in crude oil prices, than it was
two decades ago. The advent of fuel economy standards that promote more
efficient vehicles that get better gas mileage has helped to temper
energy consumption.

Even though retail gasoline prices give a lot of people sticker shock,
the impact of higher fuel costs is less than it was for a growing
number of households and businesses.

"I don't even know what gas costs now," Foreman said Friday. "I just
paid $75 to fill up one of my trucks, but I don't remember what it cost
a gallon. For me, it's the cost of doing business."

For the record, regular gasoline is averaging $2.72 a gallon, while
diesel fuel costs $2.65 a gallon throughout the state, AAA Michigan
reports.

The new reality has some economists questioning some old assumptions
about the nation's economy.

"The basic theme is that the U.S. economy is less sensitive to energy
costs than 20 or 30 years ago. We're not independent of energy. We're
just less sensitive," said John Silvia, chief economist of Wachovia
Securities in Charlotte, N.C. "Why hasn't consumption fallen off? When
the price of energy goes up, it does cut into household budgets, but
it's less of a cut than 20 years ago, given that incomes have almost
tripled since the 1982."

For example, American consumers spent a total of about $95 billion for
gasoline and other petroleum products in 1984. Last year, that figure
jumped to $230.4 billion, or 142% higher. But workers saw their income
shoot up 196% from $2.26 trillion to $6.69 trillion last year, the
Bureau of Economic Analysis reports.

"Looking over the last 20 years it's clear that incomes have grown
faster than the price of energy," said Jay Wortley, senior economist
with Michigan's Senate Fiscal Agency in Lansing. "But that's not to say
that this recent run-up isn't painful."

To be sure, many Michigan workers and consumers whose incomes have not
kept up with rising energy prices are feeling the pain.

The Michigan manufacturing sector, particularly autos, has caught the
brunt of higher petroleum prices. The state's unemployment rate of 7%
is one of the highest in the country.

Higher petroleum costs also have helped push some auto suppliers into
bankruptcy and limited hiring in some delivery businesses. And with
global uncertainty pumping fear into the markets, price volatility
remains a key part of Michigan's energy equation.

In fact, crude oil jumped $2.08 to settle at $65.35 per 42-gallon
barrel Friday after a week of declines, following a refinery fire in
Venezuela and an oil protest in Ecuador.

Nevertheless, some Michiganders, while expressing some frustration
about pump prices, don't seem as outraged as one might expect if there
were a shortage of oil and gasoline.

Michelle Marrs, who recently pumped in $61 of premium gasoline at $2.98
a gallon to fill up her 2003 Land Rover at a Meijer station at 8 Mile
and Haggerty in Novi, seemed pragmatic about rising fuel prices.

The Ann Arbor attorney is on the road constantly. But given that she's
part of a successful law firm, gas prices aren't as high on her list of
priorities as they might be for others.

"I travel a lot for work, so it almost doesn't matter for me," she
said. "Now, I'd be happier if it was $2.20 or something, but what are
you going to do?"
---

Patrick
'93 Cobra

.

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