If we increased our fuel taxes by 5 cents and put that money to green energies would it make a difference?



  1. 0 Votes

    Sure, in theory. But the effectiveness of tax revenues earmarked for particular purposes is always dependent upon how the tax is administered and where the money goes. As soon as you establish a tax for a particular purpose, you have to also establish a mechanism to make sure the revenue from that tax goes to where it’s supposed to, which increases administrative costs and the potential for bureaucratic inertia. A lot of states have been raising taxes on cigarettes in the past 20 years, to fund health care and other services disproportionately impacted by smoking-related effects. Does it work? It depends on the state and how their program is administered. I’d love to see a national-level flat tax on gasoline or other fuels that is specifically earmarked for grants and R&D for green energy technologies. Politically that would be a tough sell though, and I’m not sure who would administer it–the IRS? The EPA? The Department of Energy? It make sense in the abstract but as always with any governmental policy, particularly a fiscal one, the devil is in the details.

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