The one minute summary

This is a one minute summary of everything else on this blog.

Give every man woman and child in America $500 in exchange for raising the tax on gasoline $1/gallon. At the end of one year the tax is raised to $2/gallon and each person gets $1000 plus or minus the difference between the tax and the rebate of the first year so that not a penny extra tax is collected or a penny extra rebate is paid out. With such a plan you take a huge leap forward on the road to oil independence at no net cost to the consumer. As you suggest the tax is COLAed so that its impact is not diminished by inflation.

The day such legislation is passed oil prices drop because the public would be saying we are finally going to get serious about our addiction to oil. The price would continue to drop because of the effect such a tax would have on demand. After 6 months when the price of oil is below $60/barrel tax oil at $10/barrel. If oil rises above $70/barrel the tax is put on hold. This ceiling however would also be COLAed so it would drift up with time. While consumers will be paying this tax it is part of the mechanism that will keep oil from once again going back to $100+/barrel so essentially, OPEC would be paying the bill. With that $50 to $70 billion/year we build a 21st century power grid, help American car manufacturers to retool to build plug-in hybrid carbon fiber cars that get 75 + mpg, put money into renewable energy research, and rebuild our infrastructure with emphasis on public transportation.