gas tax to spark a move from oil

I just had this relatively simple idea. In fact, it’s so simple that it very well might have been thought of by someone before. And, when I say simple, I don’t mean that it would necessarily be easy to execute. It would be a nightmare, but the idea itself is pretty simple… Anyway, here it is:

We, the people of the United State, should immediately impose a .25$ per gallon tax on gasoline. Three-fifths of the proceeds from said sales would then be directed toward in-state research universities to help fund projects that would, either by increasing fuel efficiency or by developing alternative sources of energy so that they’re ready for market, lessen our nation’s dependence on petroleum. The remaining .10$ per gallon would be distributed as follows. Half would go toward in-state mass transit and half would be directed into a central, federally controlled institution, like the National Science Foundation. These central funds would be used to operate a governing organization charged with bringing the best and brightest scientific minds together (not unlike what was done under the Manhattan Project) to assess the various state initiatives, and to make decisions as to where to invest additional funds and resources.

Intellectual property rights would need to be worked out, as would a number of other things, but, at least on the surface, it seems like a pretty good idea to me. Not only would it spark an unprecedented amount of research in the area, but, in the process, it would create a great many jobs. Sure, the additional fuel costs would ripple through the economy, resulting in slightly higher prices on consumer goods, etc, but gas prices have already fluctuated more than 25-cents a gallon in the past year. So, it wouldn’t be raising the price of gas to a level that hasn’t been seen before. What’s more, these higher prices would be offset to some extent by the availability of less expensive public transportation. (As I mentioned, five cents would be directed toward the funding of public transportation for each gallon pumped.)

And, I almost forgot… The United States consumes 400 million gallons of gasoline each day. That would mean $100 million dollars a day being invested in alternative energy. It’s not something that the energy lobby would accept willingly, but it’s the bold kind of idea that we as a culture need to embrace right now if we plan to make it through these next few decades. Like it or not, the oil is running out, and what’s left is becoming way too costly. (See the current war in Iraq.) It’s time for us to look at the evidence realistically, raise automotive fuel efficiency standards, tax gas consumption and invest in alternative/renewable energy. It’s the only thing that makes sense.

The idea is still taking shape, but I plan to send letters to my Senators and members of Congress this week to ask for their advice on how something like this might be introduced. I know it won’t be easy, but I’m thinking that if I could get a few big research universities and environmental groups onboard that it might at least get the idea in front of people… I have tons more to say, but I’ll leave it at that for now. Please let me know if you have any thoughts.

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  1. mark
    Posted January 7, 2007 at 12:09 am | Permalink

    I meant to mention it in the piece, but I’m not the only one pushing for a gas tax. Lots of others are. I just think that my proposed division of incoming funds makes sense.

  2. murph
    Posted January 7, 2007 at 10:38 am | Permalink

    I admit that I’m somewhat skeptical of your division of funds. I could probably just refer you to Kunstler for an explanation.

    Briefly, though, I think that devoting the bulk of the funds (4/5, in two of your three branches) towards alternative energy research is barking up the wrong tree. Energy comes into earth at a set rate, and, if we’re using it up faster than it comes in, the form our use takes is just a matter of rearranging deck chairs. Keep in mind that we have to obey thermodynamics no matter what kind of energy we use – meaning that we can’t create energy, we can only squish it around from one form to another.

    Rather than researching alternative energies, to use in the same way, I’d like to see us researching alternatives to energy use – and investing in the alternatives we already have. Rebuild our mass transit infrastructure and the way we arrange our housing and jobs so that cars are not privileged. Revise our policies so that they don’t mandate high energy use and transglobal shipping of everything. Reduce,r euse, recycle, and recover materials, and thereby eliminate the energy use embedded in the extraction and processing of new materials.

    Sure, we’re probably going to see the end of cheap oil before we get the kinks ironed out on *actual* solutions, so a little bit of research into other energy sources would probably be good. But, in the meantime, there’s so much we could be doing with the technology we already have, if only we had the willingness to do so.

  3. murph
    Posted January 7, 2007 at 10:44 am | Permalink

    (I do, of course, agree that an increase in gasoline taxes is reasonable, sensible, and should be a priority. You will undoubtedly get people asking, “But won’t this create the most problems for the poor?” By way of response, I’ll point you to an article in Grist that discusses a dollar-per-gallon fuel tax that kicks in only after your 30th gallon each month – kind of like the EITC on the income tax. This way, the burden of the tax falls more heavily on the people who choose to live far out in the exurbs and drive large, inefficient, single-passenger vehicles, and less on people who are living in more efficient locations and driving economy cars when they do drive.)

  4. egpenet
    Posted January 7, 2007 at 1:02 pm | Permalink

    Consumption taxes are the ONLY taxes I prefer … you use the stuff you pay for the use … from fuels to electricity to water to toothpaste to ypsipanties … sales and v.a.t.s are the way to go! At the same time, OUT go income, capital gains, estate, etc. taxes. I’ve said all this before, but the only income-derrived tax should be social security/ medicare and the self-employment variations, which fund our retirement and medical insurance systems … and which COULD, if properly collected and managed, fund universal health care and retirement for all Americans.

    These use taxes could be devised, as well, to cover pre-school and public education, even college grant and loan programs to back up the Pell and other present programs, helping to guarantee the opportunity of at least a two-year college diploma/technical certification program, if not a four-year in-state school diploma for anyone willing to apply themselves and do the work. OUT would go property taxes to the extent that public education relies on them. Property taxes would be collected for city/county/state general purposes only … hopefully at a lower level. Governments would still face tough economic periods, as we face currently, but the education and medical care would not be the issues they are at present.

  5. DM
    Posted January 7, 2007 at 2:13 pm | Permalink

    “Necessity is the mother of invention.”

    Shut the spigot off and we’ll figure out a barrel full of solutions in no time.

  6. mark
    Posted January 7, 2007 at 2:29 pm | Permalink

    Murph, you make it sound like energy is a zero-sum kind of thing, and I don’t think that’s the case. There is waste right now in the system. The sun’s rays that are not picked up and used by plants, etc, are in essence being wasted. (And, all the sunlight not hitting the Earth is being wasted.) And the science is getting us a little bit closer every year too. The prices of solar cells are dropping, they’re becoming more reliable, they’re using less in the way of materials, and they’re becoming easier to work with. I don’t think it’s unreasonable that we could expect to see giant solar towers supplying cities with power in our lifetime. So, yes, I do believe we should invest in research. There are advances that could be made in every branch of the alternative energy sector, and we need to spur that. And, as I pointed out, doing so would create jobs.

    As for your other point on cutting usage, I agree. That’s a huge part of the equation. And, I was envisioning that a significant portion of those research dollars would be directed toward that cause. There are university projects taking place right now in the US that give us cause to think, for example, that our indoor and outdoor lighting could be more than twice as efficient in the next 5 to 10 years. That would be an enormous energy savings, and it’s clearly something we should be focusing on.

    And, I didn’t mention it in the post, but my thought behind allocating 3/5 of the dollars collected to the research universities was two-fold. On one hand, I think it’s smart because they have the history and infrastructure to handle it. On the other, however, I just thought that it was good strategy. If you had all the nation’s research institutions talking with a single voice, I think it would be very persuasive. And, while some might still see our institutions of higher learning as ivory towers, I think most of us have come to realize that they’re responsible for a lot of what we enjoy today, from the internet and Google to the medical devices that are extending our lives. People, I think, trust them. (If the government was collecting taxes to send to Halliburton, or, worse yet, were using the funds collected to start an another enormous bureaucratic entity, I don’t think people would buy into it. Universities, however, might be trusted. People in Michigan, for instance, might like knowing when they pump gas in our state, that those taxe dollars are (primarily) going to Michigan, Michigan State and Wayne State.)

    And, as for the argument about a gas tax hitting the working poor the hardest of all, I was hoping to address that by allocating .05$ per gallon to mass transportation. That would work out to $20 million a day, across the US, which should give state governments enough to make the changes necessary so that their workforce can afford to get to and from their places of employment.

  7. mark
    Posted January 7, 2007 at 2:35 pm | Permalink

    And the Grist idea of taxing everything over the 30th gallon, while an interesting idea, just seems too hard to manage to me… And I wonder how it would be enforced. Would people who don’t have cars be giving their 30 tax-free gallons to friends and family, etc?

  8. mark
    Posted January 7, 2007 at 2:39 pm | Permalink

    And as long as we’re talking about taxes, Ed, I think the inheritance tax is the most just. Inherited wealth is destructive to democracy. (And I’m not talking about family farms and a gifts or even a few million dollars. I’m talking about the empires being built within the United States by the wealthiest 1%.)

  9. mark
    Posted January 7, 2007 at 2:43 pm | Permalink

    And, Dave, before you turn the spigot off, let me know. I want to dig a big hole where my family and I can hide for at least a year. I suspect that you’re right, that eventually we’d adjust, but I’m afraid that a bloodbath would precede it. (You do remember New Orleans, right?)

  10. Hillary
    Posted January 7, 2007 at 4:06 pm | Permalink

    We need something like Germany’s 100000 Roofs program and Renewable Energy Act.,1282,45056,00.html

  11. egpenet
    Posted January 7, 2007 at 8:46 pm | Permalink

    Check the price of gas today? Look again Monday. Re-check it Tuesday. We’re drowning in gasoline at the moment. OPEC may cut production, but it never stuiks, because the Saudis cheat (thanks to Bush family bakshish.)

    The peace plan … if there is a plan … is to suck the Middle East dry and then drop our political support to all of them and walk away.

    THAT’S why Iran is pushing nuclear. They KNOW that is the West’s plan. Suck’em dry and then let them rot in the desert.

    There is hardly an Arabic country that can run its own infrastructure without Western (U.S., English, French) or Asian (Japanese, Korean) expertise. Even the day laborers are imported. And THAT’s part of our plan, as well. When the oil is gone and the money stops flowing … we’re outta there. And there won’t be a sound to be heard, but the bleating of a goat.

    The world has enough resources for energy requirements for hundreds and hundreds of years (Oil, oil sands, coal). Solar will come. Tidal will be here before solar. Nuclear is already here and should be rapidly expanded. Wind, though unreliable, is available in some places. Geothermal needs a big push. And what we can individually do is to stop WASTING what we already have … reducing our individual carbon footprints would save million$ … personally AND collectively.

  12. ol' e cross
    Posted January 7, 2007 at 11:26 pm | Permalink

    I am always in favor of taxes. Taxes make me feel fuzzy. I get to contribute to my neighbors well being. Taxes are damn good stuff. And, I’m always in favor for paying more for gas. But to Egpenet’s point, I hate consumption taxes, which, by nature, are always regressive (unless we exclusively tax caviar and $15,000 evening wear).

    Let’s put a 50 percent tax on everyone who earns more than $1 million a year and use it exactly how Mark suggested, and more. If we can bully smokers and lottery buyers in subsidizing our needs, why not the richest? We live in a democracy for Chris’ sake. There are more of us than them. But then, we don’t buy elections.

  13. DM
    Posted January 8, 2007 at 11:53 am | Permalink

    Hey Mark. I like your idea. I’m just a bit skeptical of throwing money at problems. I really believe that there is a state of mind that is conducive to invention and that it is a passion rather than something bought. The money could buy the time to maintain that state of mind as well as the equipment to conduct experiments and fabricate products, but it doesn’t produce the state of mind. The “Oh Shit” factor really is a motivator for producing this state of mind. The Manhattan Project is a good example.

    There is a husband and wife team in Troy, Michigan that were profiled in the movie “Who killed the Electric Car.” They have developed batteries, fuel cells, and solar cells there, along with many other inventions. I’d start with figuring out what makes Stan and Ira Ovshinsky tick first. You guys are lucky to have them living in your neighborhood.

    Here are a couple of articles on them:,2967,ovshinsky,00.html

    ( on the mother jones link, check out the Hydrogen Loop link )

    Their company, Ovonic Solar Solutions, makes a really interesting flexible solar cell material that fits on the roof like shingles. They sell it for residential construction too. I think it is the same material they use on the Mir space station.

    There is also the idea of the Dyson Sphere for capturing solar energy, but that is a way off. Freeman is also an advocate for the biotech development of black plants that are more efficient converters of sunlight to carbohydrates or directly to hydrocarbons.

  14. DM
    Posted January 8, 2007 at 12:28 pm | Permalink

    I just saw that Iris passed away last year. I believe Stan is still around though.

  15. murph
    Posted January 8, 2007 at 4:15 pm | Permalink

    Mark – did your post originally address improved efficiency? If so, I apologize; somehow I missed it. That makes me more favorable towards your idea.

    egpenet – The problem with purely consumption-/use-based taxes is that, as OEC notes, they’re generally regressive. If we *do* put a tax on gasoline, for example, the wealthy can afford to buy shiny new Honda hybrids or VW diesels, and slash their fuel taxes, while the poor are stuck where they are. Ditto electricity – if we raise taxes on that, the people most able to buy a new refrigerator and deck out their house in compact flourescents are the relatively well-off.

    So I think the mass transit aspect in Mark’s proposal, or its equivalent, is particularly important. Whenever you implement a consumption-based tax, you either need to build in a exemption (such as Grist’s “first 30 gallons tax-free”) or dedicate some of the money towards providing alternatives (funding mass transit, or using some of the money to provide rebates on high-efficiency refrigerators).

    As long as I’m on the topic, I’d point out the opportunity to add taxes on natural gas and electricity, as well. A straight-forward *energy* tax, as opposed to gasoline tax, would focus efforts on conservation and efficiency, rather than on merely pursuing ways to shift our energy sources.

  16. egpenet
    Posted January 8, 2007 at 10:02 pm | Permalink

    Mass transit is great … being stuck where I am is fine with me … what the hell am I gonna do with an Escalade? And it has always bothered me to see Escalades on Harriet street. I will pay tax for what I use … what I do not use … don’t bother me. The compact florescents pay for themselves twice to three times over. Us “poor” are used to getting what we need and doing without, thank you. Hybrid, schmybrid … my van with 220,000 will do fine, so far.

  17. egpenet
    Posted January 8, 2007 at 10:21 pm | Permalink

    By the way, with global warming, the price of gasoline the rest of this “winter” is going to keep going down. The head guy at Matthai Gardens is talking about planting magnolias in Michigan! Co2 … I.O.U. … thank you … my sister just moved to Seattle, and they haven’t had a ray of sunshine in three months! I’m happy as a clam here on the Huron … all the fresh water I can drink … and great blogs to boot! What ice shelf? Where? As they say just east of here … don’tmakenonevermind. Good night. And good luck.

  18. Anonymous
    Posted January 8, 2007 at 11:38 pm | Permalink

    Hey Mark,

    Love your idea for all these solar towers but where are you going to put them? NIMBY (not in my backyard) will kill you. Look at all the folks that didn’t want Hope Clinic in their neighborhood. People love the idea of Hope, but didn’t want it in their backyard.

    Now look at the attacks being launched against Mr. Pizza on Washtenaw. They have been their 6 years, and all of a sudden it has become a crisis and property values are going to plummet if the city doesn’t shut them down.

    Nothing is said about diversity and supporting businesses that cater to late night studying by students or folks that work second or third shift that want something more then a candy bar from the automat.

    OK, so somehow the city doesn’t want non-profits in our neighborhoods and the city doesn’t want businesses that stay open past 9pm, they don’t want chains, and they don’t want big box. This is just in our little town of 4.5 square miles. Yet you are leading the charge to bring new businesses, but remember 9 out of 10 small businesses fail in less than 5 years. Who is left that will come and build.

    Now with this list of what they don’t want, can you imagine the reaction from people when they start complaining about a 140 acre solar farm or complaining about the noise from wind turbines. It is already happening in other communities, just do a Google search. (

    Several years ago, on the Ann Arbor west side a development was going up. Only one neighbor was adjacent to the property. The rest of the property bounded state or other commercial property. Only one home owner. It wasn’t going to increase traffic as all the traffic would dump onto a major highway and not one car would pass one house. It wasn’t a factory, it wasn’t a giant corporate slop farm, they guy wanted to build a small office complex on his property. He had one neighbor that was a home owner and that neighbor was for the project because his road would get paved.

    And yet some 100 “neighbors” showed up to complain how it was going to change the character of the community and so the planning commission voted it down.

    I have seen neighbors in other communities that have complained about flag poles saying they didn’t like how loud the flag was when it flapped at night and their window was open.

    Until you solve the NIMBY problem, and it has to start here in Ypsi, alternative energy sources like Wind and Solar are going to be difficult to build on any property close to humans. Yet building closer to the urban centers makes sense because it reduces costs of delivery and you are building on brownfield and existing developed lands rather than new greenfields.


    – Steve

  19. mark
    Posted January 8, 2007 at 11:41 pm | Permalink

    Yes, Murph, it was there. And I’m glad to have you onboard as the second signer of my petition.

    And, Ed, I happen to quite like my hybrid schmybrid. Consistently getting over 41 miles to the gallon is pretty cool.

    And, yes, Dave, I do know about Stan Ovshinsky. I read about him about five years ago and was so inspired that I went online and bought about 25 shares in ECD (Energy Conversion Devices). I’ve been told since that it was a stupid move, as ECD/Ovonics could never be profitable due to the ways in which they’ve been financed, or some such thing, but I don’t care. It was an emotional purchase. I just wanted to show my support. (I have a few shares of Apple and Google too.)

  20. mark
    Posted January 8, 2007 at 11:47 pm | Permalink

    And, Steve, I think we’re going to see NIMBY go out the window in a few years. People will just want power, and they’ll want it desperately.

    (“Fuck the fish, dam the rivers… And let’s have that coal plant.”)

  21. Anonymous
    Posted January 9, 2007 at 12:01 am | Permalink

    Murph, just how many poor people do you think are driving 40mpg econo-boxes. None, they can’t afford a car that costs $16,000 or pay the some $200 to 400 plus a year in taxes that are based on the value of the car.

    They are driving 15 year old Buick LeSabre’s they bought for $800 because that is all they could afford and 12 MPG is as good as it gets. 30 gallons is a weeks worth of driving to work, school and the grocery store. Because when you are poor you need reliable transportation far more than you need good mileage.

    And consumption taxes on high value things like boats killed the American boating industry and put 100,000’s of American workers out of work. The rich moved their spending to real estate. The law of unintended consequences. The rich stopped buying boats and killed the jobs of the middle class workers in the industry

    Search Google for lots of stories about the boating industry dying in the U.S.

    At the same time, Italy, South Africa, and many other countries used that opportunity to launch new boating industries and now they are leaders in small craft and yacht building. An industry that even 15 years ago was dominated by American manufacturers paying excellent wages and benefits. It is all gone.

    It is the law of unintended consequences and it is why I am encouraging people to think carefully before you jump on the City Income Tax bandwagon. It will create many more problems than the empty promises they hope it will solve.


    – Steve

  22. Anonymous
    Posted January 9, 2007 at 12:03 am | Permalink

    I am trying to do my part, I drive a Hybrid built by American union workers in an American plant. – Steve

  23. Anonymous
    Posted January 9, 2007 at 12:49 am | Permalink

    If you don’t think NIMBY is a problem, then lets build a natural gas powered electricity plant at Water Street. It can get us the $100 million in property taxes we need and it will bring jobs to the community. Think about it, what if we had invested $20 million in our own utility plant. Look what it will saved in annual costs just in lighting our streets.

    Ok that is water under the bridge the City blew the $20 million and we can’t get it back.

    Now what?

    We could still attract utilities to locate here and build here through other incentives including the promise to not fight them at every turn. And if not at Water Street, how about the Ford/Visteon/ACH plant.

    At the same time, we could look at restarting the dam generator at Penn Park.

    Chelsea has their own electric utility and has the lowest electric rates in the area. They don’t do their own generation but they own the poles. If I was opening a manufacturing business, Chelsea would be my number one stop.

    We tried to talk about these alternatives for Water Street three years ago and the City and former leaders were closed minded to this saying we need residential condos at Water Street and it is too far along to make changes. It was a failed plan, now that we have new leadership, it is time for new ideas.

    It is time for a serious conversation in this community about other alternatives for Water Street and we should be talking about energy. The City will be shortly renegotiating the city’s utility contract and DTE has already warned city officials of substantial rate increases.

    The new Mayor promised a revolution in 100 days.

    Read his website
    “If elected, Schreiber says his first priority will be to form an Ypsilanti 2020 Task Force made up of local business, labor, education, community, neighborhood, and other leaders.”

    I think it has been 60+ days since the November election how is the 2020 thing going?

    Mark, if we did move forward with a new plan for Water Street, I think you would see all those NIMBY folks that don’t want rental properties next to the campus, want Hope Clinic to move out of the city to the township, and are now trying to drive Mr. Pizza out of the city would be the first to start screaming about not wanting a electricity plant at Water Street. It was the same folks that sad no to Ikea at Water Street.

    The revolution does start in Ypsilanti, but it seems like much of our leadership is still sitting on the sidelines.


    – Steve

  24. egpenet
    Posted January 9, 2007 at 6:54 pm | Permalink

    Regressive is such a liberal pejorative … bad eddie.

    What I’m po’d about is being taxed out of the one decent asset I own that does not produce any income … my property. If I want a hybrid … which is depreciating asset … I’ll buy one, pay the exhorbidant premium and pay the sales taxes and perhaps enjoy some fuel savings.

    All I’m talking about is paying a little more tax for everything we buy … exempting those at the bottom of the food chain from paying more than a small percentage … and using the excess revnue to cut property taxes and invest in your roads and energy programs.

    I the fuel I need and will gladly pay more to take me to my clients. I charge them more to cover my expenses and I tell them that. There is money in the system to cover these ups and downs. I paid $2.19 Friday and $2.11 today (Tuesday).

    As for the boat guys … the boat people in other parts of the world are good at building better boats. If we had the best boats for the money, we’d still be building them. People who want to buy boats still buy them. The west coast of Michigan is a haven for boat owners who have bought the latest and greatest boats. I have a friend on Long Island who owns several sailboats. Yippee! Your boats people should meet my boat people.

    Nancy Pelosi is ALREADY on track to cut oil company tax breaks and put the dollars into research into alternative fuels. I think she said $15 billion. You need to come up with another plan for your new revenue stream.

    What is really going on in this thread? Where is the paranoia coming from? I’m not paranoid, I AM neurotic … and what’s happening in the city isn’t helping any. But I’m not paranoid. Take your TV clicker and toss it in the Huron. Stand up, wherever you are, take one step back, take a deep breath, exhale, kick in your TV set monitor. Cancel your A2 News subscription. Get all of the empty, disgusting and negative input out of your house. Join a neighborhood association. Walk the streets. Go to the Ypsilanti Police Academy and volunteer to patrol once a month. Pick up litter as you walk to the Corner Brewery. Have some fun.

    If you want to speculate about how religion affects people in stange ways … read Cat Stevens’ biography … and then re-read The Fountainhead to get your head clear.

    Have a beer ….

  25. egpenet
    Posted January 9, 2007 at 8:54 pm | Permalink

    Did I suggest volunteering for the Ypsilanti Police? I think I did. Read the chapter, The Saint, in Camille Paglia’s book, Vamps & Tramps. Yiou’ll see a great example of what American Christianity is missing. Is this why our young men and women are leaving our shores and hurling themselves into the jaws of death in Iraq and Afghanistan, and again in Somalia?

    There is nothing suggesting the transcendent inside most Christian churches, as Camille points out. No guts, no gore, no glory. You have tio live in the ghetto or face down the Mhadhi army in Sadr City to test yourself against evil. Camille Saint did just that in his day and was canonized.

    Have another beer ….

  26. briansp
    Posted January 30, 2007 at 12:07 pm | Permalink

    The notion that we’re “using energy faster than it comes in” bothered me. I started to do some back-of-the-napkin math, and then got lazy and found this article:

    “In full sun, you can safely assume about 100 watts of solar energy per square foot. If you assume 12 hours of sun per day, this equates to 438,000 watt-hours per square foot per year. Based on 27,878,400 square feet per square mile, sunlight bestows a whopping 12.2 trillion watt-hours per square mile per year.

    With these assumptions, figuring out how much solar energy hits the entire planet is relatively simple. 12.2 trillion watt-hours converts to 12,211 gigawatt-hours, and based on 8,760 hours per year, and 197 million square miles of earth’s surface (including the oceans), the earth receives about 274 million gigawatt-years of solar energy, which translates to an astonishing 8.2 million “quads” of Btu energy per year.”

    That’s a lot, and that’s only the solar source. There’s a lot of energy out there if we can figure out how to use it.

    I don’t think its reasonable to say across the board “use less energy”. I’d say “use energy more wisely” and “get away from fossil fuels where practical”. I think Mark’s idea of a greater sin tax on gas and directed investments into research are good ones, and the framing of a “Manhattan Project” could provide the vision that would need to sustain such an effort. However I’d probably want to use a different narrative — “Apollo Project” has better connotations. :-)

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