By Joel D. Joseph
Boycotting Russian oil and natural gas is the right thing to do to pressure Russia to stop its slaughter of innocent Ukrainians. Polls show that U.S. consumers are willing to suffer these costs to support the Ukrainian people. However, we can take steps to reduce the pain on consumers of high gas prices by suspending state and federal gasoline taxes. Eliminating the federal gas tax of 18.4 cents per gallon will help. But, state gasoline and diesel taxes are often higher than the federal tax.
California has the second-highest gasoline prices of any state on the continent with a tax of 51 cents per gallon on gasoline and 68 cents per gallon on diesel fuel. At the same time California has a budget surplus of $45 billion. If California suspends its gasoline and diesel tax for one year it will cost the state $9.5 billion, one-fifth of its budget surplus.Additionally, it is estimated that California will receive federal funding from the recently passed infrastructure law of $30 billion over five years for roads and bridges. The state gas tax is used for road and bridge maintenance and repair.
Washington State's gasoline tax is the same as California's while Pennsylvania has the highest state gasoline tax at 58.6 cents per gallon. Pennsylvania's diesel tax is a whopping 74 cents per gallon.
Diesel taxes basically increase shipping costs as most delivery vehicles use diesel fuel. Higher diesel prices directly add to the price that consumers pay for everything shipped by truck and most of our products, from groceries to consumer goods are shipped by trucks.
In the Long Run
Suspending taxes on gasoline and diesel fuel is only a short-term solution. The long-term solution is weaning our economy off fossil fuels entirely. Last year, electric cars constituted only about 3% of all vehicles sold in the United States. However, Ford, GM and Chrysler are rapidly increasing sales of electric vehicles. GM, for example, plans to introduce 30 electric vehicles by 2025. GM's goal is to produce only electric vehicles by 2035. Ford predicts that half of its cars will be electric by 2030. Chrysler's goal is to have 40% of its fleet electric by 2035. This means that we will have millions of electric vehicles in the coming decade. Where is the electricity going to come from to power these vehicles?
Fossil fuels, coal and natural gas, now produce 56% of all electricity generated in the United States. Nuclear (16%), hydro (7%) and renewables such as solar and wind (17%) make up the rest.
We can dramatically increase solar energy production by increasing the tax credit for homeowners and businesses buying solar panels. The ideal system is for homeowners (and condo and business owners) to power their vehicles from a solar panel and battery system. This will produce a 100% clean-air transportation system.
We can also mandate that all new construction include solar panels. It is far cheaper to install solar panels as part of new construction than adding it later.
We can also mandate that all buildings install solar water heaters. According to the U.S. Department of Energy, water heaters consume 17% of all energy use. In 1976, Israel mandated solar water heaters for all new residential buildings up to eight stories. The Yom Kippur War of 1973 and subsequent oil embargo made energy independence a matter of national security in Israel. It is now a matter of our national security for the United States to be energy independent. We need to plan to have an energy system that is clean, reliable, sustainable and independent of foreign sources.