Gregg Laskoski is a senior petroleum analyst for GasBuddy.com
When you heard it the first time you may have needed some time to digest. The International Monetary Fund, as you've probably learned, is proposing that the U.S. impose a tax of $1.40 per gallon in order to pay for social programs around the world and to save the environment. "The time has come for subsidy reform and carbon taxation," the IMF's deputy director, David Lipton, said in a speech on March 26.
Congress has not increased the federal gas tax since 1993. The last time, it raised the federal tax to its current level: 18.4 cents per gallon of regular gasoline. And, to date, the Obama administration says it does not support any specific carbon taxes as a solution to repair roads and bridges or global warming.
Interestingly, Lipton noted that 159 economies worldwide subsidize energy, but his wrath was reserved for "the top three 'subsidizers' across the world: the United States (U.S.$502 billion), China ($279 billion) and Russia ($116 billion)."
Lipton said the proposed $1.40 increase in the cost per gallon of U.S. gasoline would be the "corrective tax" that would cause less consumption of fossil fuels. According to the IMF, "petroleum products (gasoline, diesel and kerosene) contribute to global warming through CO2 emissions and local pollution." So his solution is to push U.S. gas prices to levels north of $5 per gallon so Americans would have to drive less. How does that sit with you?
The resulting firestorm against him was swift and it does not appear that imposing punitive gasoline taxes to save the planet is high on Washington's to-do list. But one has to wonder… what is really compelling this ill-conceived shot across the bow? And, how did the IMF stray so far from its fundamental reason for existence?
Do you know what the IMF was created to do? It was created at the end of World War II (1945) to facilitate the rebuilding of national economies. "The IMF is charged with overseeing the international monetary system to ensure exchange rate stability and encouraging members to eliminate exchange restrictions that hinder trade," says its website.
So by the authority granted to the IMF by participating member countries, it takes money from industrial countries, assigning a quota to contributors; earns interest on all of it; and then offers funds to countries who might request IMF aid or bailouts.
Or, you could look at it this way: When the U.N. needs a loanshark it gets together with the IMF. Of 188 member countries, which nation do you think provides the greatest single portion of the IMF's operating capital? If you guessed the U.S.A., you guessed correctly. American taxpayers pay the most (18 percent of the total IMF budget). Of course.
Perhaps it's time to revise Uncle Sam's IMF arrangement. Who will bail us out when our debt comes due and our bridges are still crumbling?