NYT
columnist Thomas Friedman has been beating the drums for an energy policy that seriously reduces our appetite for foreign oil. The unquenchable American consumption of oil is one of the key factors, along with increasing demand from China, India and the developing world, driving up the price of oil and buttressing fundamentalist regimes that are overtly hostile to our interests, like Iran, or covertly hostile, like Saudi Arabia.
As noted in a post in today’s Road to Ruin blog, Friedman notes that we are funding both sides of the war on terror. “It is a war against open societies mounted by Islamo-fascists, who are nurtured by mosques, charities and madrasas preaching an intolerant brand of Islam and financed by medieval regimes sustained by our oil purchases.”
So, why am I raising an issue like this in a blog about Virginia politics and policy? Because so much of our demand for oil is the direct outgrowth of our driving habits. And our driving habits are largely the result of our sprawling pattern of development. Increasing the fuel efficiency of the cars we drive is one good place to start. But that’s not enough. Individual Virginia drivers are driving, on average, 70 percent more today than they were 25 years ago (as measured by Vehicle Miles Traveled).
How can we change that, while respecting the principles of market economics and shunning social engineering? By restructuring Virginia’s tax base. We should enact a “carbon” tax on all forms of petroleum consumption — gasoline, home heating oil, diesel fuel, aviation fuel, whatever — and apply that revenue to reducing our other taxes. By taxing petroleum, we encourage petroleum conservation and shift demand to other fuels, such as coal, nuclear and green fuels. We then could apply several billion dollars to reduce corporate income taxes and personal income taxes, thus making Virginia more attractive in the competition for corporate and human capital. Or, if social equity is our concern, we could apply the revenue to eliminating the sales tax on commodities consumed disproportionately by the poor.
Here’s the sublime beauty of the petroleum tax: It indirectly taxes the mullahs and sheikhs who are so hostile to our way of life. By enacting a petroleum tax, Virginians can take a huge step towards energy independence while thumbing their noses at the radical Islamic fundamentalists who threaten our way of life.