Some comments from readers of the proposals

The first comment was from an old friend, Doug, to whom I sent an early version of these proposals as an attachment to an e-mail. Doug, who was obviously biased, wrote "Marvelous! Please put them on your web-site."

I didn't have a web-side except for one put together by friendly students at MIT, and I didn't think it appropriate for me to use an MIT site to preach my political gospel. After many months, with some skilled help, I have rather ineptly produced the web-site to which you are being exposed.

The first very crude version of the web-site went to a few friends. One sent it on to Jed, a young friend of his, who wrote that the engineering angle seemed inappropriate. (Apologies for not giving his exact comments! My e-mail system in which I thought that I had stored all comments in fact impartially eliminated either the comments or my responses.) He also felt that my proposal to tax all non-renewable sources equally would produce no incentive to develop pollution-reducing technologies. He stated that there were large examples of waste and pollution outside the US that would be unaffected by my proposals. I responded (I've done some editing) as follows.

"Thank you Jed for your helpful comments!

"As soon as I had sent the message out I thought "I should have explained the 'blame-the-engineer angle'.

"I used it, somewhat tongue-in-cheek, because I've found that policy types and economists resent engineering and scientific people proposing policy. So I thought that this approach might spike their guns. I was also crediting, as well as blaming, engineers and scientists for the amazing standard of life that we now enjoy. I could be wrong about the effects of this approach. It seems from your reactions that I should soften it somewhat.

"There are indeed huge amounts of pollution and waste outside the US. I believe that we must put our own house in order before we try an Iraq approach on the rest of the world. In many respects we set the standards and the fashions, and if we in the US really started going green I believe that there would be major changes everywhere on earth.

"I don't understand your statement: "By taxing all non-renewable sources equally, there will be no (economic) incentive for the development of pollution-reducing technologies." It seems to me that there would be huge incentives to change. There are generally two responses to changes in taxation, prices etc. One is the short-term change that is fairly easy to follow, equivalent to cutting out a lot of waste. (We have fit youngish friends who live 150 yards away who have never visited us except in one of their two SUVs. There would be no hardship if they felt that they needed to abandon this habit.) The second response are the long-term changes such as moving house or changing jobs so that, e.g., one doesn't have to travel 50 miles each way to one's workplace, or buying a smaller house, putting on a solar roof etc.

"When DOE carried out an experiment in rural California outlawing the provision by employers of free parking, automobile use dropped instantly by nearly fifty percent, even though there were no public transit services. The employees had started car-pooling.

"I have to nail my colors to the mast regarding emissions trading. In my opinion, it's better than draconian regulation, but it's still a "Mickey Mouse" way to tackle the problem. Why not just tax the emissions? The Economist of June 10, 2006, p. 69 had a piece called "Gaming gases - why a scheme designed to punish polluters is rewarding them" that describes the problems with emissions trading and justifies my feeling that it's carried out by a bunch of industries to benefit each other, without peons like us getting much from it.

"I confess that I do strongly believe that redistribution of wealth is what is needed to give incentives to the poor to work more and to have pride. The enormous success of Clinton's scheme cutting down on welfare has shown that incentives work. The rich have redistributed wealth in their own direction for long enough through skewing taxation, so there's nothing impure about skewing it back while at the same time producing powerful incentives for rich and poor alike to move in directions that improve the country and eventually the world."

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Another comment came from Scott, an economist, who stated "Those no worse off have no incentive to conserve, it is "tit for tat". Importantly, but for the use of more efficient appliances, etc., the income disadvantaged, or the lowest 25-30% of the population in your model, have a income elasticity of more than 1.0 - they consume proportionately more of everything (including fuel) for every extra dollar of income. Bottom line: as proposed, your tax runs the chance of actually increasing energy use, not decreasing energy use." He felt that I had exaggerated price elasticity in response to tax increases. Also he thought that my understanding of inflation was flawed. "The one area where I would expect the effect you suggest would be on industrial use of electricity so long as real-time electricity meters were in place. Businesses today reduce energy use when it benefits them to do so by monitoring their consumption by the hour. So, as long as your tax were somehow tailored to grow when energy use is highest during the day (rather than a flat tax like 25 cents per gallon) then industrials will react."

In my answer I wrote

"Your most serious criticism is on inflation. It is true that there are different reasons for inflation to occur. I am concerned with only one of these. The Dept. of Labor compiles a consumer price index, and publishes tools to derive the inflation resulting from changes in the CPI. The CPI does not include the price of income taxes. If we were to switch from taxing income to taxing consumption, as many economists recommend, the CPI would rise sharply as if there was a sudden inflation. I am concerned with this measurement of supposed inflation because a whole lot of payments (e.g., social-security disbursements) are connected to the CPI and to what is generally known as "inflation." I want to correct this measure, which in my opinion is faulty and misleading, and, if uncorrected, would lead to gross distortions.

"Regarding price elasticity, it is, I think, greater than most economists expect. There have been many reports of rather dramatic changes in people's behavior, purchasing directions, investments etc. resulting from the mild increases in energy prices of the last few months [i.e., in the spring and summer of 2006]. There are always a few rich people who wouldn't change their habits in any way, and I suppose it is possible that a few poor people would spend their "windfall" income on buying the more expensive nonrenewable energy [and products the prices of which would increase with those of nonrenewable energy], etc, but these people would be close to being the lunatic fringe. One should not bend policy to account for these. Bad cases make bad law. "____________________________________________

Some more comments came through in July 2007 as a result of some publicity in magazines. _______________________

AK wrote on July 9, 2007:

"Thank you for your personal response! Now I get it.   Since higher energy users pay in more but the fund is paid out in equal portions, there is an element of redistribution.   Very simple.  If we can get the governent to implement this as stated without syphoning off the cash flow or redistributing it to their favored constituencies this will be a good plan. I will be happy to share this and hope it gets some positive support. Thanks for your efforts."_________________________

DJS wrote on July 9, 2007:

"I agree with your reasoning and your positive mental perspective. I'll think about this and give you positive suggestions to implement your concept in the future, as may occur to me. Thank you for your efforts on all our behalf."

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JW wrote on July 13, 2007:

"Your overall plan is great.  If the general population consisted of more than chimpanzees, I think it would be adopted and would work."

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A different JW wrote on July 18, 2007:

"Hi Dave, I saw your letter in ME Magazine, and took a look at davidgordonwilson.net. There's nothing there that I would disagree with, except to add to your introductory paragraphs that the customers of engineers share the  blame.  This is especially so, given that your rational thoughtful  engineering solution is being ignored by the customers.

I'm glad to see you are still trying to get people to listen.  When I  work to spread the word, I explain that I've owned only 45 MPG cars  ever since the eighties when they first came on the market.  It is  crazy that our nation is stuck on the petroleum dependence because  gigantic vehicles are a source of personal pride."

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MM wrote August 6, 2007:

"I like your suggestions, very much. I have been advocating a similar approach (fuel taxes and rebates) for years. 

"I keep wishing US politicians had the balls of the European politicians and would actually do the right thing.  No one has been able to explain how public pressure has not been able to lower fuel taxes in Europe, but it has blocked it from happening here in the US. "

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In September 2007, PC, a (legal) resident from Brazil and a very successful designer/manufacturer, whom I asked particularly to comment on the implications of the policy on illegal aliens, wrote as follows. (Modesty should require me to edit out the first sentence, but I'm not that modest.)

"You have a brilliant mind, an incredible awareness of the world mechanisms, and the creativity and vision to link them together. I understand from your proposal that it basically suggests to raise [prices for polluting, for using nonrenewable resources, etc.] a notch or two in this country. . . . . .I couldn't agree more. It is rather shocking and even sad to observe the amount of cheap unneeded junk [that is bought.] Middle-class families will buy a $5000 lawnmower rather than pay for someone who needs a job to mow their lawns. Affluent families may own a $100,000 car yet complain about the price of gas or the utilities' charges for running their 60-inch plasma TVs. It bothers me seeing people consuming and wasting natural resources because they can pay for them, and therefore, in their opinion, they own them.

"Your idea of distributing the tax trust fund in equal shares among all citizens is an incredible assumption, a beautiful and powerful concept that grabbed most of my interest. . . ..I agree that it would also address, for better or worse, the current illegal immigration issue. Even though I feel sorry for most of these, and because they are in the majority honest hard-working people, we should call them "undocumented immigrants" not illegal."

© Copyright 2007 by David Gordon Wilson
last modified August 7, 2007