Could higher taxes spread democracy and liberty?

If the United States were to increase fuel taxes, would America's demand for petroleum to run our vehicles and our industry lessen?  Would greater fuel taxes cause fewer dollars go into coffers of oppressive regimes or to fund terrorists?  Could taxing Americans more be the key to creating President Bush's vision of democracy and freedom around the world?

These questions were prompted by red herring's recent diary, "Friedman Gets It Right on Energy Independence."  The diary discusses the column "No Mullah Left Behind" by New York Times' Thomas Friedman, in which Friedman makes the connection between America's addiction to petroleum and the funding of oppressive regimes and terrorism.

In the context of our nation's trade, imported oil accounts for more than a quarter of the trade deficit.  When you review the Department of Commerce's recently released trade report for December 2004 (CB-05-17, BEA-05-05, FT-900 (04-12)) , it is revealed that the United States had an overall trade deficit for the year 2004 of $617.7 billion (up from $496.5 billion, or an increase of 19.62 percent over 2003).  In regard to petroleum, the net trade deficit reached $164 billion or 26.55 percent of the total trade deficit (up from $120.4 billion, or an increase of 26.58 percent over 2003). Almost 36% of the increase in the trade deficit (2004 vs. 2003) is due to petroleum imports (With the price of gasoline in the $2-a-gallon neighborhood, or better, this is not surprising.).

So, are we funding despots and terrorists?  If you take one-tenth of one percent of that $164 billion, you arrive at a yearly figure of $164 million--that can fund a lot oppression and terrorism.  

What can we, as a nation, do about importing more than $160 billion worth of petroleum?  We change the situation by consuming less imported oil, through lessening overall demand.  In the short term, the only way demand can be lessened is through market forces and taxation to increase the price for fuel.  In the long term, greater fuel efficiency and a concerted effort to conserve energy will slow the demand.  Could higher fuel taxes be patriotic--just like the rationing of World War II?

Higher fuel taxes can only be brought about in fashion that is both effective to create the desired behavioral change and at the same time does not traumatize the American economy.  

Enter a fuel taxation plan, a schedule, so that America's petroleum addiction can be gradually lessened.  To that end, a plan would work like this:

*    A fuel tax would rise gradually by pennies per gallon according to a schedule.
*    An increase in the fuel tax would reach 40 cents per gallon by the year 2025.
*    The revenue generated by the fuel tax would be equally shared by the federal and state governments.
*    The federal government could use its share of the revenue for everything from debt reduction to alternative energy research and development.
*    The states could use their share of the revenue to fund mass transit programs and infrastructure repair projects.  A state could also rebate in part, or entirely, that state's share of revenue, generated by the tax, to their citizens; thus, poorer states and western states (i.e. - those with vast geography and sparse populations) could cut the tax burden in half by returning the revenue to their citizenship (20 cents vs. the full 40 cents).
*    A known, and reasonable, schedule of an increasing fuel tax would encourage--over time--vehicle manufacturers to increase the fuel efficiency of their vehicles and consumers to purchase vehicles with greater fuel efficiency.

Fuel Tax Schedule

Are increased fuel taxes a new weapon to be used in the war on terrorism?