We Can Get Out of These Ruts

You would think that the Bush administration fails to see the connection between our oil addiction and the loss of American lives in Iraq. The administration apparently finds a war to sustain our oil dependence preferable to the exercise of leadership to reduce that dependence. It can muster the political will to go to war, but it can't muster the courage to tell the American people the truth about what is required of each of us to break our oil addiction. So it is enabling that addiction.

Transportation accounts for 67 percent of the oil we consume, and surface vehicles alone account for 56 percent. This fact means that a dramatic reduction in consumption is relatively simple to achieve. Cars and trucks in the United States have an average fuel efficiency of 25.2 miles per gallon. In Europe it is 43. A mandatory increase that would bring the U.S. average to 40 miles per gallon or more would reduce our oil consumption by one-fourth. In other words, a single piece of legislation would eliminate the need to import oil from OPEC. Let me repeat: No need to import oil from OPEC.

To encourage people to buy fuel-efficient cars, we should establish a fee-rebate system. The buyers of the least fuel-efficient cars should pay fees that would in turn be paid as rebates to those who buy the most fuel-efficient cars within that class -- a major incentive. Former CIA director R. James Woolsey Jr., an advocate of reducing U.S. dependence on foreign oil, noted in testimony before the Senate Energy and National Resources Committee that a hybrid vehicle such as a Toyota Prius can get 50 miles per gallon, and if it were made of lightweight carbon composites used in the manufacture of aircraft, it could get 100 miles per gallon. He went on to say that if it were a plug-in, flexible-fuel vehicle, it could get an incredible 1,000 miles per gallon. It's an industry ready to be born.

We also need to change our tax system to reduce our oil dependence. In general, we ought to reduce taxes on things we need, such as wages, and raise taxes on whatever is dangerous to us, such as pollution and resource depletion. We could implement a $1 per gallon gasoline tax; or an equivalent carbon tax, which is a tax on any energy source that emits carbon dioxide; or equivalent taxes on other major air pollutants: volatile organics, nitrogen oxide, lead, sulfurous dioxide and particulates. These taxes could be phased in over five years, with the revenue going to reduce employment taxes (Social Security, Medicare or unemployment insurance) for employees and employers alike. The gasoline or carbon tax would encourage the nation to reduce its dependence on insecure sources of foreign oil, and with payroll taxes reduced to 15 percent of labor costs, businesses would have an incentive to hire workers.

Such a shift in taxation -- away from jobs and toward pollution, energy and natural resources -- would draw many of the 24 million part-time employees into the full-time workforce, and millions more who are not working would be more likely to find jobs. After a few years of adjustment in the case of a gasoline or carbon tax, cars would be more fuel-efficient, so consumers would pay what they used to pay for the same amount of driving, and the broad middle class would continue to pay lower employment taxes. The result would be increasing demand for goods and services; shrinking dependency payments such as unemployment compensation and welfare; lowered social costs, such as crime and avoidable illness; and a more equitable tax system that encourages rising employment.

Reducing employment taxes also makes sense on grounds of competitiveness and equity. Employment taxes now hit our most successful companies hardest. A company such as Microsoft or McKinsey desperately needs talented people, and there is a limited pool of those with the requisite skills. As a part of a company's compensation package, it has to pay enough to offset the employment taxes paid by the employee. If it doesn't make up the taxes in higher wages, the employee can go somewhere else where the employer will cover the taxes. Meanwhile, at a lumberyard where there is an excess of labor, the company doesn't have to pay higher wages and the bulk of the employment taxes hit the workers. Perversely, it is the lowest-paid workers and the companies most essential to economic growth that are hit hardest by employment taxes.

We will never make these simple changes in our political system or in our energy and tax systems if we don't tell the truth about our national circumstances. Political leaders should not arrogate to themselves, based on a desire to hold onto political power, the right to hide the truth from the people. If we tell people the truth we can trust them to do the right thing. Sounds like a radical notion, but it's really just common sense.

Once we face the truth about our abysmal voter turnout, our oil addiction, our health-care and education crises, and our inadequate national savings, there is good news. There are answers to all our current problems. It's not rocket science. What's required is the political will to enact policies that can allow us to thrive in the 21st century. An administration bold enough to tell the truth will find an audience ready for bold solutions.

Bill Bradley is a Democratic former senator from New Jersey.