Sarah Palin: George Bush in Lipstick

This article is right on the spot. I've been telling people how similar to Bush she is. Sarah Palin is the perfect neocon candidate. She's extremely right on issues, likable, and dim-witted enough to be led around by party elites like Cheney. I fully expect that she will continue to campaign at a low level for the next three or six years until she garners the strength to make a run as president herself.

Energy Independence Tax

Here's a proposal for an energy tax that I think can work to help our country move quickly toward true energy independence. I’m generally a Free-Trade kind of guy. However, I think we’re faced with a situation that requires a very definite and positive act of will. In most of Europe, fuel cost are still double (or more) what they are here in the US. That’s completely due to tax structure. Raw petroleum costs Europeans the same as it costs Americans. Western Europe has invested significantly in nuclear, wind, and other alternative sources of energy while we fritter away time because those alternatives are seen as too expensive or too scary. France, of all the left-leaning places, now gets a huge amount of its electricity from nuclear, while we’re still scared of it and haven’t built a new nuclear plant in over 25yrs. Deb and I visited Germany and Denmark almost 10 years ago and Denmark was covered with large wind turbines along the coast. In the end, the tax I’m proposing is not a tax on all energy sources – only imported fossil fuels. It subsidizes domestic energy. One day, any attempt to consume the amount of oil the world currently consumes will cost $150-$200/bbl. I’m recommending we make the decision that time is already here and effectively subsidize alternatives until we don’t care how much oil is.

It’s always confounded me that our nation is in a pseudo-“war with terrorism” and a real war with Iraq and my government doesn’t ask me to give up anything or contribute any sort of effort to the war other than to “go shopping”. The terrorists are funded primarily by oil money. The countries they live in are driven by oil money. We keep pouring money into those countries by our insatiable appetite for oil. This country will not adopt alternative energy sources until the price of oil is too high. Whenever we get scared by rising oil costs and it looks like alternatives will be cheaper, the oil producers can and will always drop the price by increasing production or whatever means necessary to make sure their product is cheaper. The tax assures they can’t do that. We won’t change unless we commit ourselves to change. I see this as a national security issue, an environmental issue, and a long-term economic health issue.


Energy Independence Tax
2008 Jeff Delmas


Here’s an Energy Tax Plan that provides incentives to increase domestic production of energy by any means, while making sure that foreign oil exporters cannot reduce our energy independence efforts by lowing the price of oil. In the 1970’s energy crisis, incentives were provided to invest in alternative forms of energy and many gains were made in that area. However, alternate energy stagnated when oil production increased and oil prices dropped to historic lows in the mid-1980’s. When it doesn’t make economic sense to use alternatives, we won’t use them. We’ll go down the cheapest path possible. And why not? We should be economically efficient in such areas.

“…we have a serious problem: America is addicted to oil, which is often imported from unstable parts of the world”, George Bush, 2006. We know that oil is the cheap alternative in the short run, but the long-term economic, political, and social impact of imported oil is deleterious. Our dependence on oil requires an act of will to overcome. It won’t happen on its own through normal market forces for a long, long time. By then, we’ll have paid Saudi Arabia, Iran, Venezuela, Russia, and several other hostile nations many more billions of dollars. Funding their efforts with our dollars is national suicide.

How the Tax Works

Each imported barrel of oil will be taxed at a rate that keeps a minimum price per barrel, but only for imported oil. We’ll call that price the ATBP, the After Tax Barrel Price. Each day, the price of crude on a specific exchange, or collection of exchanges, is used to set a daily fluctuating tax on each barrel of oil. We’ll call this Exchange Barrel Price EBP. Let’s call the tax T. The tax rate will be T = ATBP – EBP. If T is less than some threshold value, then set T to that minimum tax value. It’s important to note that the tax should apply only to imported oil. Domestic production should be left out of this tax plan. We may also need to tax any equivalent amount of imported refined oil product or natural gas product.

As an example, let’s set the ATBP to $150/bbl. If the spot price is $100/bbl on a given day, then the tax for the next day will be $50/bbl on imported oil. The effect of the tax would be to eliminate incentive to purchase foreign oil. Since there is not enough domestic production to meet nationwide demand, alternatives will emerge due to market forces driven primarily by competitive price incentives. The tax will effectively impact the largest consumers most in whatever market foreign oil is used, providing those consumers incentive to seek alternatives.



Development of Alternative Energy
The tax does not need to be used in conjunction with any preference for alternatives. It simply keeps the cost of conventional imported oil above a set price to provide incentives to develop alternatives that meet or beat the price of imported oil.

Determining Daily Tax Rate
The daily tax rate can be determined in any number of ways, but I recommend that it be made using an average of the spot price of oil on several markets taken at several, perhaps random, times of each day. A specific 24hr time interval should be decided for the measurement of the spot price and a specific 24hr period of application of each day’s tax rate should also be set. By averaging and using random sampling times, markets will not react as they would if a specific exchange or sampling time were used. Market fores would tend to keep the price of international oil high in order to minimize the tax, depending on how significant the US purchase of oil is in international markets.

Enforcing the Tax
The tax should be applied at the time and point of entry into the US. Imported oil arrives to the US in large shipping tankers. The tax should be applied at the moment of transfer into a US port, regardless of the cost of that oil at the source.

Uses of the Tax Revenue
Hell, we need so much revenue to pay off current debts that I don’t even want to think of new ways to spend money. But of course, some incentives for alternate energy can be developed.

Effect of the Tax on Foreign Economies
Imagine the economies of Iran, Russia, Saudi Arabia, Venezuela and others without the US as a customer.


For another practical view, see this article.

Re-awakening

OK, OK, I've taken enough time off from this blog. I think I'm ready to start posting again. I won't post every day, but I'll keep regular postings going.

The photo is a view from my kitchen window one afternoon this past summer when a small thunderstorm was headed our way. I submitted it to this blog. We'll see if she posts it.