Who has the best ideas: Congress or a guy named Norm?

Congress may think it comes up with great ideas, but sometimes it just takes a guy named Norm to really hit one out of the park.

The U.S. Congress’ idea is the “Cash for Clunkers” plan, which would give cash incentives of up to $4,500 to owners of gas guzzlers who want to trade up to more fuel-efficient vehicles.

It’s a solid idea and has worked well in other countries. While the idea is simple, the plan behind it has unfortunately become quite complicated. (I swear, Congress must have a rule that they can’t pass legislation that requires fewer than 500 pages to spell out.) You can read a great Q&A article about the plan here.

Enter Norm Davis, a reader of our blog who sent us this response to the Cash for Clunkers plan:

That’s a good start – it’s the “carrot.” But they left out the stick: Charge the owners of these gas guzzlers every time they re-register their vehicles. I’m thinking along the lines of $20 per mile under the national EPA average 22 MPG, per year. So if you drive a car that gets 16 MPG, you will pay an extra $160 each year. The extra registration fees collected will help pay for the cash-for-clunker program, so it won’t have to be totally funded out of the taxpayers’ pockets. I think that’s fair. What do you think?

Norm, you need to run for Congress. Your idea is brilliant. Not only does it provide funding for the Cash for Clunkers program, it provides a stronger incentive for owners of gas guzzlers to get rid of them.

The only addition I would make is an escape clause for small-business owners who need an 8.1-liter V8 for business purposes. Everyone else, pony up and pay!

What do you think of Norm’s idea to charge extra registration fees to owners of vehicles that get less than 22 miles per gallon?

-tgriffith

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  1. Shawn Hughes
    | #1

    You must be joking! The problem here is with the underlying assumption that we should regulate everything, including personal choices. If someone elects to drive a vehicle that gets 4 MPG that is their CHOICE! If someone elects to drive a vehicle that runs for days on recycled vegetable oil, that is their choice too. The free market will dictate that the first person, with the 4mpg car will have to pay an enormous amount to drive that car. SO they will eventually tire of it and get a more efficient car — of their own choice! We don’t need to have artificial incentives to buy-back vehicles, nor artificial penalties (that sound very similar to an additional tax) to make people change. And if the first person chooses not to switch vehicles then we can all celebrate the fact that we still live in a (mostly) free country!

    Shawn Hughes
    Twitter at : @shawnrayhughes

  2. Oliver
    | #2

    Sounds like a good idea to me. Gasoline costs all americans much more than it’s market price. If you add in government spending to clean up, protect, and subsidize oil it probably doubles the cost of a barrel. Not to mention the environmental impact. If someone wants to drive a gas guzzler, they should have that option, but they should have to compensate everyone else for the damages it causes. That is a better example of a market economy. If you want oil, great. Then you should pay for our wars in the middle east, tax subsidies, and other expenses for oil. I shouldn’t have to pay for that when I ride my bike to work each day. I agree less government. Have the people who want to burn oil pay for it.

  3. Randy
    | #3

    “Norm, you need to run for Congress. Your idea is brilliant. Not only does it provide funding for the Cash for Clunkers program, it provides a stronger incentive for owners of gas guzzlers to get rid of them.”

    Norm is way too smart to run for Congress. (He’s probably too honest as well.) The only problem with all this is that the states regulate vehicle registrations and the Fed’s can’t legislate this kind of program without funding it, and they also can’t force states to adopt it. (All they can do is threaten to withold federal highway funds for states that don’t comply.) Notorious energy hog states like Texas will surely refuse to go along. You’ll also see an explosion of people demanding vehicle exemptions for business purpose, of which a large number will be fraudulent. (Like “Joe the plumbers” wife’s Escalade.) Then how do you regulate that? More federal employees?

    All in all, when you follow the law of unintended consequences, you’ll see the suggestion sounds good but would be virtually impossible to implement.

    Best way to get gas guzzlers off the road is to raise the federal gas tax on all highway fuels and allow a stand-alone tax credit for people who can show ownership of fuel efficient vehicles. Even that is subject to abuse (as is everything).

  4. | #4

    So where would classic and Muscle cars fit into Norm’s plan? Why would a 1963 Corvette 427 (which gets terrible mileage) owner have to pay extra registration for the 150 miles he might drive to shows each year?

    I totally agree with increasing tax on gas guzzlers, but it should be extra fuel taxes, not registration. Registration doesn’t provide for a level playing ground. What about the guy who takes his 8 MPG F250 pickup and converts it over to propane? He’s now getting 5 times better mileage, yet he still gets dinged by this “registration” proposal.

    Just bump up the tax on gas. Double it. The only time the American public actually started thinking about fuel efficiency was when gas was $4 per gallon last year. Now that it’s back down to $2 they don’t care any more. How are car companies, with years of R&D time, supposed to follow that fickle market?

    Set a minimum price of $4 a gallon and the market will steer itself to better solutions. Much better than a “gas guzzler” tax that only attacks a small part of the problem.

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