Save Energy, Get Punished

Who makes up these rules anyway?

by Fred E. Foldvary

Sometimes governments act so ridiculous that they clarify the true role of the state. Government chiefs claim they want to reduce environmental damage and promote energy conservation, but in practice, they punish people for doing this. A clear example came to light in a news article in the Los Angeles Times on May 6, 2008.
A mechanic was using fuel made of fryer grease for his fleet of motor vehicles. Government’s response was to slap him with fines, paper work, and taxes. Officials of the State of California told him:

* he had to get stinking badges; he needs a diesel fuel supplier’s license.
* He has to report how much grease he uses for fuel.
* And the state says he has to pay an 18-cent road tax on each gallon of grease used.

Those who advocate gasoline taxes and those who want to tax-punish consumption should take note. Environmental pioneers who contribute to energy independence, less use of the oil that finances tyrants and terrorists, and less waste and environmental damage, by recycling grease, get punished rather than rewarded by the state.

Does perhaps the fault lie in California’s state constitution, which requires state officials to be tyrants? No, don’t blame the state constitution. The preamble says that the people establish the state constitution “to secure and perpetuate” our freedom.

California’s state constitution is long, but one only has to read the first paragraph in Article I, “DECLARATION OF RIGHTS.” “SECTION 1. All people are by nature free and independent and have inalienable rights. Among these are enjoying and defending life and liberty, acquiring, possessing, and protecting property, and pursuing and obtaining safety, happiness, and privacy.”

To make sure that the rights recognized by California’s constitution are seen as inherent in the people, there is also SEC. 24. “Rights guaranteed by this Constitution are not dependent on those guaranteed by the United States Constitution... This declaration of rights may not be construed to impair or deny others retained by the people.”

Would free and independent persons enjoying liberty, property, and natural rights get smacked with a tax for seeking to reduce environmental damage and oil imports? Free people with property rights should not get taxed for any peaceful and honest exertion, period.

The environmental pioneer also

* needs a license from the state Meat and Poultry Inspection Branch to carry kitchen grease from restaurants.
* The state forces him to have $1 million in liability insurance.
* He also needs a permit from the state Air Resources Board to burn fat.

With gasoline in California selling for over $4 per gallon, some drivers would like to convert their vehicles to use vegetable oil or used grease. They would pay only $1 per gallon if not for the state’s taxes, permits, and regulations. Those who save fuel and help save the earth from destruction in California do it secretly, hoping that Big Brother is not watching. The State of California is violating the spirit of its constitution by punishing activities that don’t harm others.

To truly defend liberty and human rights, the state should abolish the tax on fuel and shift public revenue to pollution, congestion, and benefits received. Landowners get higher rent and site values from public works and civic services, so to avoid this subsidy, their land value should be tapped for public revenue. Then the state could eliminate its taxes on sales and on income from labor and enterprise.

The ridiculous policy of taxing and restricting those who recycle grease for fuel is only a more blatant example of the foolishness of taxing productive and beneficial activity in general. It is logical that we increase our well being by not taxing good things and instead making those who receive government benefits or inflict costs on others pay for these. California should charge tolls on congested roads, levies on polluting activity, and assessments on land rent or land value.

There is a theorem in public finance about the “median voter,” which says that the views of the average guy is what government uses for policy. But ask 20 people whether the state should tax-punish those who recycle grease for fuel, and they will say no, of course not. Evidently the median voter is not really in charge. We need a new theory, one about the median tyrant.

This article first appeared in the Progress Report, www.progress.org. Reprinted with permission.

Dr. Fred Foldvary teaches economics at Santa Clara University and is the author of several books: The Soul of Liberty, Public Goods and Private Communities, and the Dictionary of Free-Market Economics.