In the May 15 issue of Time Magazine, columnist Joe Klein takes an interesting stance. The article is called A Fair Trade for Lower Gas Prices and his suggestion is simple: raise the gasoline tax to discourage consumption, and then give the money collected back to people:

Gasoline at $4 per gal. might get the job done, but that could have a very disruptive effect on the economy. How to minimize the disruption? By sending every last penny raised through new energy taxes right back to the public.

His idea for giving the money back, however, is convoluted.

The simple way to give the money back is through a central account that distributes money to all citizens, an idea first proposed in the article Robotic Freedom. If Klien’s tax were distributed through the central account proposed in Robotic Freedom, it would be a great way to get the program started.

Americans consume something like 150 billion gallons of gasoline per year. So a tax of $1 per gallon would yield about $150 billion for distribution. $2 per gallon would yield $300 billion for distribution. The tax could be phased in over a 2 year period to minimize impact. The great thing is that people would be getting the money right back through the central account, so the net effect on the economy would be zero.

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Marshall Brain is a fellow of the IEET, and the author of The Day You Discard Your Body, Manna and the founder of HowStuffWorks.com.

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