Higher gas tax suggested - then wealth distributed

One News Now (Link) - Pete Chagnon (July 16, 2009)

A former director of the Central Intelligence Agency believes Americans should be taxed one dollar per gallon of gasoline.

Jim Woolsey is a venture partner with Vantage Point in Silicon Valley, California, and a former director of the CIA from 1993 to 1995 under President Bill Clinton. In 2008, he endorsed John McCain for president and served as one of McCain's foreign policy advisors.

Woolsey spoke with OneNewsNow about the Waxman-Markey energy bill -- also known as "cap-and-trade" -- and says he wishes the bill were more aggressive. "Uh, well the coal lobbyists got in there and tilted our near and midterm reliance for our base load electric power toward coal," he explains. "And I think that's most unfortunate."

He believes that reliance for base-load electric power should lean towards natural gas -- a fuel he says is less polluting than coal, which he says releases too much carbon dioxide.

Woolsey adds that lawmakers also need to balance taking care of the environment with pushing for energy security and independence.

He claims the cap-and-trade bill leaves too much leeway for the use of foreign oil and gasoline, and he wants to see gasoline heavily taxed in order to discourage the usage and force people to drive electric hybrid vehicles, such as the Toyota Prius he owns. "One possibility is to impose a dollar-a-gallon gasoline tax and then rebate it completely, 100 percent, to the public through the Social Security system or unemployment compensation," he suggests.

OneNewsNow asked Woolsey how taking money from one sector of the economy, namely the middle class, and giving it to the unemployed and Social Security would benefit the economy.

"Well as I said, Charles Krauthammer's idea on that, and Senator Lugar endorsed it, is not that the government keeps the tax but that the government rebates it 100 percent to the public. It just does it through the Social Security system and through unemployment compensation so that everybody shares in getting the money back," he adds. "And admittedly...the people who drive the longest and the most would be hit somewhat harder."

He was then asked about middle-class rural Americans who have to drive long distances in order to make ends meet. Could that tax be a punishment on hard-working Americans?

"If somebody drives more than average, he is going to pay somewhat more than average on that tax. But that is necessary if you're going to discourage the use of gasoline and moving towards alternative fuel," he contends. "You've got to fish or cut bait."

Woolsey argues that those who are against the tax support the notion that Americans should keep buying oil from the Middle East and other areas of the world that are unstable. He comments whether the Arctic National Wildlife Reserve (ANWR) or offshore drilling is a viable solution to energy independence. "Uh, that's nonsense. We don't have close to enough oil in ANWR and offshore to become energy-independent -- and it would be a nutty way to go at it anyway," he says.

Although he does admit that tapping into such domestic resources might help lower the cost of oil and create American jobs, Woolsey says the end result -- energy independence -- would not be achieved.

Another alternative fuel being experimented with is hydrogen fuel cells. OneNewsNow asked Woolsey if that was a viable option for the future. "I hope not, because that has been a real crash trying to run cars on hydrogen fuel cells," he notes.

Woolsey says it can be done, theoretically, but the cars would cost upwards of a million dollars each and the price would have to be drastically reduced. He also claims there is no fuel infrastructure for hydrogen cars in the U.S. A similar argument could have been used for gasoline-powered cars when they were first invented because roads did not exist then either.

On a related note, Iceland is successfully testing hydrogen fuel cell buses for use in public transportation.

Towards the end of the interview, Woolsey touted the benefits of his Toyota Prius and encouraged Americans to move toward more use of hybrid cars as these. He claims that on a single charge, he can go 30 to 40 miles before the gasoline hybrid engine kicks in and the battery needs to be recharged. The battery takes roughly five hours to recharge.