Comments on: Bush Passes Final CAFE Decision to Obama

By: crookmatt

crookmatt — Fri, 16 Jan 2009 02:47:47 +0000

What AP said.

I agree completely.

By: Bryce

Bryce — Sat, 10 Jan 2009 23:33:57 +0000

: )

By: AP

AP — Sat, 10 Jan 2009 12:51:42 +0000

Shines and Bryce: You’ve got it.

By: Bryce

Bryce — Sat, 10 Jan 2009 05:45:41 +0000

Actually this would work out well for those of us who drive fuel efficient cars. We would get a higher credit per amount of fuel used relative to an individual driving a larger vehicle……doubling as a market signal and a little reward for trying to be green or what have you. Doesn’t sound half bad to me.

By: Shines

Shines — Sat, 10 Jan 2009 00:55:28 +0000

Samie, I'm no expert, but from my simple view:
Since the purpose of the tax is to conserve and reduce fuel use, I would split the credits evenly per individual taxpayer. Those that do not drive but take public transportation get to use the credits to pay for their bus passes and transit tickets. Those that drive small or efficient cars can use some of the credit to offset the cost of ownership. Joe Average gets back what he spent in taxes. Joe hot dog driving his herkin' SUV with the 22 inch chrome rims ends up subsidising other more efficient drivers and transit commuters.
Businesses could get back some of the tax with an increased mileage credit for business used vehicles. Since gas stations already collect taxes the infrastructure is in place.
It is far from perfect, but something needs to be done and this method does not seem to increase the size of government as much as creating an additional organization to determine fuel efficiency per vehicle size and class and to review automakers product lines to verify CAFE standards are being met.
Higher fuel prices still leaves the individual free to make car buying and driving decisions. And automakers are free to build whatever they want (keeping in mind that more buyers will be looking for more efficiient vehicles.) Anyway - that's the ideal as I see it...

By: AP

AP — Sat, 10 Jan 2009 00:23:33 +0000

Samie, my opinion is that you'd split the tax credit up evenly, with no income minimum or maximum, or net income tax due. Then, the system has maximum transparency: tax credit = (# of gallons X $/gallon)/(# of tax filers). The governmanet can't "hide" the money.

Also, conservatives will have to give in on "not paying people who haven't paid in" and liberals will give in on "giving 'rich'people a tax credit who don't really need it." It's also no longer a regressive tax that way.

Both sides would have to give a bit, but the alternative is the status quo: mileage mandates that take many lawyers to decipher and other lawyers to get around, all the while creating unintended consequences (like SUV's, urban sprawl, etc.). With CAFE only, we would see little improvement in national petroleum consumption. Pump price, as we saw last year, is the key.

By: Samie

Samie — Fri, 09 Jan 2009 22:47:15 +0000

Maybe I need more understanding over the tax credit idea that Shines & AP support. The question I have is how do you divide up the tax credits? Do you go by income brackets, itemization, or distribute the tax credits evenly as one credit per household? It’s just as easy to claim gasoline tax distribution as government intrusion and in fact the notion of tax is used as propaganda to freak people out. Anyways agree with Bryce, its a tough spot either way Obama decides to go. But at some point there will need to be government action tax credit or better CAFE wc will eventually have some negative consequences by reducing competition or having mixed results in consumer decisions on purchasing more fuel efficient vehicles. The 25 billion Gov. loan to create fuel efficient vehicles needs to be backed up by something…. Tough decisions ahead for Obama so he may need to stock up on the Just for Men Hair dye

By: Shines

Shines — Fri, 09 Jan 2009 21:22:22 +0000

I agree with AP – CAFE is government meddling. In stead of creating a bureaucracy requiring complex rules and standards along with some type of enforcement task force, create a simpler process. The gas tax after being divided would benefit the taxpayers that drove the more efficient vehicles. I also like the idea of an excise tax based on vehicle weight. Sure hybrids would be taxed a bit more than non, but it would help out people who can’t afford the initial cost of a hybrid. They’d save money drifing their Aveos, smarts and other light cars.

By: AP

AP — Fri, 09 Jan 2009 17:27:45 +0000

After re-reading this, I noticed the section on "weight-based rules." In other words, the more a vehicle weighs, the lower the mileage requirement. Talk about unintended consequences!

I can see it now: A car is about to be released, but is just short of its CAFE requirement. If they add 30 pounds to it, it makes it into the next weight class. It will get less fuel economy, but enough to pass the less-stringent requirement. They go into a rush program to increase the thickness of sheet metal (in places that do no good for crashworthiness, since they don't have time) and sound-reducing tar on the floorpan, but "manage" to meet the weight minimum.

This is only what you can easily predict from such a stupid idea. It may take years to see the other ridiculous effects.

Is this insane or what? If we don't get real and address this with a (much simpler) higher gasoline tax, we are going to end up with the most screwed-up combination of overweight vehicles you can imagine!

By: AP

AP — Fri, 09 Jan 2009 17:00:57 +0000

What Obama should do is replace CAFE (which hasn't done what is intended) with a higher gasoline tax, phased in over, say, seven years. Divide up the revenue, and return it to all income tax filers as a tax credit. It's revenue-neutral, so it doesn't hurt the economy; it encourages the puchase of fuel-efficient vehicles; it encourages combining trips, and carpooling, etc.

More than anything, with regards to this website, it would make hybrids make economic sense without subsidies (from governments or companies), since they would pay themselves back quicker.

CAFE requires too many stipulations and arbitrary definitions (like what a car is vs. a truck), which will again cause unintended consequences, after which we will have to patch up more loopholes. We've seen this before; we'll see it again. Obama could retain CAFE along with the higher gas tax, but it wouldn't really do anything more.