Here’s a fresh idea that represents a real change inWashington. Interestingly it’s coming from a Republican, Richard Lugar of Indiana. In an op-ed in the Washington Post he suggested something that’s normally unthinkable among lawmakers– raising gasoline taxes – and combines it with a sweetner -- a tax cut that puts money into the pockets of working people. Or in the language of D.C., it’s a revenue-neutral way to treat our addiction to oil. Lugar makes his case this way: http://www.washingtonpost.com/wp-dyn/content/article/2009/01/30/AR2009013002728.html "The huge external costs of our oil addiction -- in terms of national security, economic vulnerability and environmental damage -- are not accounted for in the price Americans pay at the pump. Classic economics identifies two basic options to intercede where Adam Smith's invisible hand fails: Governments can regulate to force, or prevent, certain actions. The government also can impose targeted taxes, which are almost always the most efficient, least invasive and most transparent remedy for market failure." The money raised would be given back to Americans – either in the form of lower payroll taxes – which would help the working poor -- or even a check sent out based on the extra collections. This tax hike/tax cut combination was originally put forth by a conservative columnist Charles Krauthammer. And Thomas Friedman also has said a higher gasoline tax is a good approach to reducing oil demand and imports. Lugar never specifically says how big a tax, though he mentions a “$1 a gallon or more” in a sentence suggesting that is an open question. It’s interesting when a tax increase is echoed by columnists from a wide range of (moderate) political viewpoints. It suggests the notion of a high gasoline tax to manage fuel demand is now an idea that’s really possible someday. It also has the backing of the Baker Institute, which put out this piece in support of it in the Houston Chronicle. http://www.chron.com/disp/story.mpl/editorial/6222203.html All this makes sense to me, because there are all sorts of social costs associated with oil imports – rising trade deficits, global warming and ties to dangerous countries to name a few. And I’m a believer that over the long term, price is determines demand. A survey that ran in today's paper said consumers are still worried about high prices, but that will fade. And as Lugar wrote, a gasoline tax is transparent, easy to administer and targeted at the one sector that burns most of our oil. Lower demand should moderate the price of crude as well. So let’s do it. I’m looking forward to spending my gasoline tax check.