Forget Gas Tax Cuts: Economist says $3.50 Gas Tax Increase Would Reduce Consumption, Boost National Security and Stimulate the E
April 15, 2008
PITTSBURGH, April 15 /PRNewswire/ --
WHO: Lester Lave, Professor of Economics at Tepper School of
Business at Carnegie Mellon, Co-Director of Carnegie Mellon
Electricity Industry Center. Lave discusses his proposal on
YouTube at http://www.youtube.com/watch?v=Q2iYuoO6z1M
(Logo: http://www.newscom.com/cgi-bin/prnh/20070425/CARNEGIELOGO)
WHAT: Lave says a $3.50 per gallon tax on fuel (bringing the
price of gas in line with prices in Europe and Japan) would
promote energy consumption and reduce the transfer of U.S.
wealth to oil-rich nations. He proposes using the gas
surcharge to "forgive" Social Security payroll taxes on the
first $20,000 of income -- generating revenue for the U.S.
Treasury and boosting consumer purchasing power,
concentrating benefits on the working poor.
"Based on the average American's purchase of 500 gallons of
gas per year, the surcharge would generate about $540
billion in revenue, whereas the forgiveness of the Social
Security payroll tax would cost only $468 billion," says
Lave. "Not only would this strategy reduce oil
consumption, but the Treasury would realize a net gain of
$72 billion. The program would also be advantageous for
wage earners of all levels. For example, an individual
earning the minimum wage would receive an additional $2,004
in income annually while spending only $1,750 more on gas
per year."
Lave believes that while this approach may not be a
permanent solution, such market incentives are the only
real way to achieve more immediate changes in consumer
behavior and move the U.S. toward a more independent energy
policy, steps he believes are critical to national
security.
WHY: Professor Lave is a leading authority on energy economics
and has consulted for a wide range of companies and
organizations, including the FTC, EPA, Xerox, Rand
Corporation, Mead, General Motors, Cummins, Witco, and the
U.S. Departments of Justice, Transportation, Labor and
Defense. Professor Lave is a member of the Institute of
Medicine of the National Academy of Science, and has been a
member of the Environmental Protection Agency's Science
Advisory Board since 1986.
AVAILABILITY: Anytime, via phone or on-camera/live interview
CONTACT: Geof Becker or Sharon Horowitz
(412) 268-3486 / (212) 220-4444
[email protected] / [email protected]
SOURCE Tepper School of Business at
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