Still, if any of the candidates were in fact serious about energy independence, they would seize on this moment of declining oil prices to announce a standby tax on oil.
The one (and probably only) thing that will promote a shift away from oil is an excise tax to ensure that the price of oil remains at or above $65 a barrel. If oil falls below that figure, the tax kicks in: $1 at $64 a barrel, $2 at $63, and so on all the way down. (NB--if our policy goal is encouraging conservation, it's important that the tax be imposed on all oil, not just imported oil.)
Consumers and businesses alike will know that they won't feel like fools in two years if they buy a smaller house closer to work or invest in developing alternative technologies.
Faster growth, less oil consumption, and a smaller deficit is worth fighting for.
Consumers will still feel the benefit of the rapid decline in oil prices from almost $150 a barrel just months ago. Halting a price decline at $65 will hurt of course, but having experienced $4 a gallon gas, we can surely make our peace with gas in the higher $2s, especially if this time some of the proceeds of that gas price are strengthening the United States rather than enriching Venezuela.
And conservatives--opposed to all new taxes--should reflect: even if John McCain miraculously should win, higher taxes are coming. The Bush tax cuts will soon expire, and the Democratic Congress will not re-enact them. (And who believes that a President McCain would push Congress very hard on this issue? He's already told us that immigration amnesty will be his first domestic priority.)
And let's not blink this: the government will need the revenue. The federal government has just assumed a huge mountain of debt, and while we all hope that the sale of assets will quickly balance those debts, it remains uncertain when the sale can begin--and the debt will have to be (expensively) serviced in the meantime.
On the other hand, an incoming Obama administration and a Democratic Congress will want political cover on the impending rise in tax rates. Republicans will not have much bargaining power after 2009. But if we can trade some cover on a new oil tax in exchange for the continuation of low tax rates on capital gains and dividends, wouldn't that be a trade worth making? Faster growth, less oil consumption, and a smaller deficit--worth fighting for, I think.
David Frum is a resident fellow at AEI.