Hawaii raises petroleum tax 2000%

[AZDDF.PK]

Hawaii State Legislature Raises Tax on Petroleum from $0.05 to $1.05 per Barrel
3 May 2009

http://www.greencarcongress.com/2009...0503.html#more

The Hawaii State Legislature has reported out of conference HB1271, which boosts what had been a state environmental response tax on petroleum of $0.05 per barrel to an environmental response, energy and food security tax of $1.05 per barrel.

Breakdown of the allocation of the proceeds of the tax hike include:

$0.05 of the tax on each barrel to an environmental response fund;
$0.55 to be deposited into an energy security special fund;
$0.10 to be deposited into an energy systems development special fund; and
$0.35 of the tax on each barrel deposited into an agricultural development and food security special fund.

The tax is to be paid by the distributor of the petroleum product.

[jkyu99]

Originally Posted by AZDDF.PK

The tax is to be paid by the distributor of the petroleum product.

Distributors never pay taxes. Guess who pays taxes.

[neoplasticity]

we need this stateside. actually what we need is a sliding tax on gas to keep gas in the $4 a gallon range.

[KarenRei]

I disagree. A price floor = a profit floor for the oil industry. I'd much rather see a gas tax pegged to a greater-than-inflation growth rate. Or perhaps pegged to how much money the tax took in over the previous year (hence making it relatively unaffected by people moving to more efficient vehicles or off gasoline until EVs make up a sizable share of the market)

[neoplasticity]

if there is a mass migration to EV, the profit for oil will be zero. if you put a price floor and there is economic pressure to move away from oil both on the consumer and producer side, the smart oil companies will move into battery technology, algae biofuels, etc. the smart companies will adapt, the poorly run companies will die.

being against a policy because it hurts a certain industry segment especially when the industry produces something that is relatively harmful to the environment, public health, national security is myopic. unless the world view is that goverment policy should not put pressure on consumer behavior. if that's the case, we should be against high taxes for tobacco products because that puts downward pressure on profits for tobacco companies.

[KarenRei]

if there is a mass migration to EV, the profit for oil will be zero.

First off, outside of our wildest fantasies, it's going to be a long, long time before most of the world's cars are EVs. Secondly, that's not true. The profit will always be whatever it costs to produce it versus whatever they can sell it at. If there's a tax-induced price floor for gasoline, every company in the US will price their gasoline right at that floor. Now, there may be lower overall *sales* if there's "mass migration to EVs", but the profit per sale will remain just as high.

if you put a price floor and there is economic pressure to move away from oil both on the consumer and producer side

On the producer side? You're guaranteeing them a fortune even if oil prices completely collapse, and you're calling that an incentive for producers to move away from it?

You can have incentives for consumers to move away from EVs that don't act as such a huge handout to the oil companies. For example, any gas tax that *isn't* based on a price floor.

the smart oil companies will move into battery technology, algae biofuels, etc.

I would like to believe that's true, but after seeing how people demonize the oil companies that *do* move into these realms, I have to question how smart of a move that is. If an oil company gets into battery tech, for example, they're automatically accused of being in a conspiracy to keep the world addicted to oil.

[neoplasticity]

ah, i see what you're saying. yes if they priced it at the price floor, that would reduce tax revenue while giving them ridiculous profits. maybe we need just a 2 dollar per gallon tax. of course, i doubt any politician can survive the public outcry from such a suggestion in the US which is why im suprised that this happened in hawaii.

[speculawyer]

They should use some of that tax money to pay for building a charging infrastructure . . . that way at least some of the extra oil tax will help fund a future replacement for that gas.

[KarenRei]

Originally Posted by neoplasticity

ah, i see what you're saying. yes if they priced it at the price floor, that would reduce tax revenue while giving them ridiculous profits. maybe we need just a 2 dollar per gallon tax. of course, i doubt any politician can survive the public outcry from such a suggestion in the US which is why im suprised that this happened in hawaii.

Well, I think the easiest way they could get a tax hike across would be to take the current tax rate, make that the starting point, and have it grow at a rate greater than inflation. Or have the rate automatically get boosted whenever certain metrics are met (or not met). For example, if 10% of our vehicles aren't low carbon by 2015, or 20% by 2020, or even things like if the arctic icecap drops below 50% of its median size.

You could even be tricky with the "greater than inflation" bit by keying it to inflation, but using a fixed inflation rate and having the starting point be a period of high inflation. Or, one interesting way to achieve it that's been discussed around here is a carbon equivalent of VAT -- CAT, so to speak. Products are taxed at each step of the way based on the embodied carbon added in that step, with a credit for exports and a tax for imports. Introduce something like that in lieu of cap and trade and you've got gasoline taken care of as well.

[paddler13]

Hawaii is already committed to being 70% renewable/alternative energy in 30 years and Maui currently gets about 10%+ of its energy from wind/biomas/hydro as it is. The push here is very strong and the utilities have, by necessity, signed on in a serious way to getting this done. Some of the solutions will be less than acceptable, for example the utilities are seriously trying to get biofuel from palm oil, but on par we'll be moving in the right direction.

Raising this tax is a good idea because the pressure has to be put on both consumers and the companies to get with the game plan. All it will take is one hiccup in the supply chain and we are seriously screwed, far worse than any cost incurred by a raise in this tax.