Soak the Oil Cartels!
Andrew Samwick has the lowdown
on two provocative arguments about gas taxes by Jayanta Sen. Sen's first paper argues that a tax on imports of crude oil, far from crippling the economy, would "transfer wealth of $100 billion+ from [oil-producing] foreign governments to the U.S. consumers," along with decreasing oil use.
The second paper points out that if the major oil-buying countries—the U.S., EU, Japan, China, India—all formed their own cartel of oil importers, they could save further billions by bargaining down oil prices with OPEC. The U.S. alone would save some $200 billion a year. Good stuff, but I can see one downside to the second idea: uppity American seniors might start to wonder why economists all think "OPIC" should be able to ratchet down oil prices but Medicare shouldn't do the same with drugs.