Apropos of yesterday's gas tax report and discussion, today we bring you Alan Drake's ideas on post-peak mitigation. Alan is an engineer, former accountant, and professional researcher based in New Orleans with best hopes for many. Alan would also like to thank the lovely and talented Wendi Berman for her editing skills and assistance.

Many proponents for public spending on Post-Peak Oil mitigation are attracted to gasoline and diesel taxes or more generic oil and/or carbon taxes. In an era of rapidly increasing oil (and all other energy) prices, passing such taxes will be politically difficult and take precious time.

I would like to propose an alternative tax for Phase I of Peak Oil mitigation that adheres to Sen. Russell Long’s famous dictum “Don’t tax you, don’t tax me, let’s tax that fellow behind the tree!”

World Trade Organization (WTO) rules allow for a specific exemption that will allow the United States of America to impose a non-discriminatory tariff (it applies to all goods and taxable services, with a specific exemption for essential goods) if the funds raised are used to reduce our structural trade deficit, i.e. our oil consumption.

Specifically, the WTO allows nations with a structural balance of trade deficit (which the USA certainly has) to apply a non-discriminatory tariff if the funds from that tariff are used to reduce the structural trade deficit (which reducing oil use certainly would do). A separate section of the WTO treaty allows the importing nation to exempt “essential” goods.

In 2006, the USA imported $1.861 trillion in goods (and exported $1.023 trillion). This allows for significant revenues from a small percent tariff.

On Monday the 1st October 2007 the UK government increased the duty on a litre of petrol and diesel by two pence taking the duty to 50.35 pence per litre (ppl). This is the first of three increases announced in the last budget. Duty will be increased by a further 2 ppl on 1st April 2008 and 1.84 ppl on 1st April 2009 (Duty Rates .pdf).

The increase has been almost unanimously criticised by the UK motorist, not just because it’s a tax but because it takes UK fuel prices perilously close to the psychological barrier of £1 per litre. On the www.petrolprices.com site a survey receiving 80,000 votes in just a few days indicated 90% in favour of the following statement:

Should the government do a U turn and scrap the extra 2.35p tax on fuel because of unexpectedly high oil prices already hitting motorists hard?

Despite everyone talking about petrol prices it seems that many people don’t understand how that price comes about and certainly have no awareness of the approaching decline in global oil production.

Trust tax linked to private equity buyouts

The income trust structure was a major impediment to private equity firms buying up pieces of Corporate Canada, the Finance Department was told one day before Ottawa slapped a crippling tax on the sector.

"Private equity firms generally find it difficult to compete against the income trust alternative, said an Oct. 30, 2006, memo sent to Bob Hamilton, senior assistant deputy minister of tax policy at the Finance Department.

The memo was obtained by The Globe and Mail under access to information law.

For anyone at Finance who knew the trust tax was imminent, one conclusion that's easily drawn from the memo is that taxing trusts out of existence would likely usher in even more private equity buyouts by Canadian and foreign investors, which is what happened.

What Price Victory? (scroll down)

It’s reasonable to assume that, as professionals operating within a government department nominally charged with understanding affairs of finance, the folks working for Flaherty would have some rudimentary understanding of the way key players in the private space—private equity, for example—operate.

That is private-equity firms find undervalued, cash-generating businesses, strip them down and load them up with debt. Interest expenses basically wipe out taxes owed. That’s the nutshell.

What was that about “tax leakage”?

Either the professionals have no clue about their business, or they engineered the destruction of the trust sector. Secretive, incompetent and stupid is no way to run a government.

Searching for survivors of Spanish flu

The project is specifically targeting British Columbians, though the researchers would hope to hear from survivors from further afield as well, Dr. Skowronski said.

She believes that as well as safeguarding a piece of history, the project could help people contemplating future pandemics to understand how people cope when systems are overwhelmed and survival comes down to individuals helping individuals.

"I think it's really hard for people to appreciate -- and governments in particular -- to appreciate the potential enormity of a pandemic," she said.

"But the basic human capacity to cope, to draw on each other for support -- that hasn't really changed [since 1918]. And so we can really learn, I think, from people and what they have to describe about that."