Time to cover the externalities: time to raise tax on fuel?

For any driver right now, it's great to see the fuel prices come down and have money go further. But would we really notice the difference between a 50% and 55% reduction in costs? What if we could reallocate that 5% to tax to specifically fund longer term global/regional/country sustainable energy initiatives. And at the same time, cut another tax, like income taxes, by the equivalent amount so the current government subsidies for those projects no longer depend on a general pot.

Even a Top Republican is open to a gas tax increase - Jan. 5, 2015: The last time the federal gas tax was increased, the price at the pump was $1.09….That was 1993. Twenty years later, lawmakers are considering an increase.

There is a cost to our choices, so in this age of fast paced information and reaction it would be great to see at least some attempt for tax codes across the world to catch up, at least a little.

The Economist back in 2011 talked about this as The best idea everyone hates (March 2011). Just as a reminder, the chairmen of the bipartisan Simpson-Bowles deficit commission recommended that the petrol tax be increased by 15 cents per gallon beginning in 2013.

Tax v Fuel Cost

Previewing The New Year's Political Landscape : NPR: Well, it's going to be very tough, obviously. But Bob Corker, a Republican from Tennessee, has proposed a 12-cents-a-gallon increase in the gas tax. And of course this is a good time for that since gas is low, is cheap. And he says it's revenue-neutral, that other taxes would be cut to pay for it.