Gas tax.

Fed gas tax is now the same 18.4 ¢ it was in 1993. Then it was about 18% of a surcharge on gas purchases; now it is about 6% of a surcharge. Fed gas tax was designed as a “user fee” to fund infrastructure maintenance on the nation’s highways. The costs of doing that maintenance have gone up dramatically but gas tax has not. Higher gas prices encourage the purchase of more gas efficient vehicles, such as hybrids, the new diesels, and the emerging class of EV’s including extended range hybrids and full BEVs.

By any metric other than political pandering the gas tax n America should be significantly higher than it is, perhaps 45¢ a gallon or more. Some of those revenues could help offset the tax credits to encourage purchase of EVs.


Why stop at 45c? If your idea is sound (which I disagree) then charge a federal tax of $10 a gallon on gas. Then everyone in their right mind will buy a hybrid vehicle, while raising extra money for the treasury?

My thoughts are this: Until an alternative energy source (solar, wind, electrical, etc.) can be used to produce a RELIABLE transportation alternative to gasoline vehicles, then we are all going to be slaves to oil.

Walk to the store, ride a bike, or even buy a hybrid car. It’s just delaying the inevitable…

But until then, raising the gas tax about 30 cents a gallon will do nothing except hit poor working slobs the hardest while the rich keep filling up their SUVs at 100 bucks a tank. The poor can’t afford that extra $10k on the price of a car, while the rich don’t want it…

How am I a slave to oil if I’m walking to the store?

Without oil, the store’s shelves would be bare.

I usually hear the opposite complaint here where the state gasoline tax is a percentage. When gas goes up, it represents a windfall for the state but none of the common tax-payers seem to benefit at all from it. At least, it’s not as though anyone ever says “With all this extra money, you can be assured that all your potholes will be fixed and tolls reduced by half!”

I remember reading an article written by a sociologist who worked at a minimum wage job for some time as field research on how “the other half lives” (or something of that nature.)

Anyway, this sociologist had a friend who was willing to pay something like $120 a week to live out of a shady hotel, but wasn’t willing to pay $400 a month rent on a decent apartment. The reason? The friend was very much living pay check to pay check, and as counterintuitive as it sounds, they could afford $120 a week, but they just plain couldn’t come up with a lump sum of $400 once a month to pay a land lord.

I don’t know much about the auto market, but it’s my understanding that currently hybrids are a good chunk more expensive than non-hybrids. I’ve even read that some of them probably won’t even be cheaper than non-hybrids even in the long run because their initial cost is so much higher.

But anyway, even if a hybrid is cheaper over the life of a vehicle, a lot of people who live paycheck to paycheck can’t afford to think long-term like that. They certainly can’t afford to sell an old car just to get an expensive new hybrid, so raising the price of gas at the pump will hurt them the most and further squeeze what marginal disposable income they have.

I’m not a fan of raising the direct gas tax as a method of reducing oil consumption. For starters, it’s regressive and can be a real hardship on people that need to commute to work but have little in the way of extra income. Secondly, its only a small percentage of the price of gas, which has proven to be a pretty inelastic commodity over the last few years (the price has almost tripled over the last decade or so, with little drop in demand) so unless we do as jtgain suggests and raise it by 1,000% or so, it probably won’t do much, and lastly it will add an extra charge to consumer goods as the tax of transport is passed on to buyers.

Personally, I think raising CAFE standards make much more sense. It’s a measure which has been successful in the past and has fewer of these drawbacks.

I don’t see a problem with a small tax increase to support research and development of alternative energy sources. I do see a problem in raising prices to encourage (force) consumers to buy alternative technologies today. That sounds a lot like government price fixing to me, and that can only lead to more problems than it solves.

I don’t think there’s any single answer, at least not any single good answer. As Malodorous points out, a significant gasoline tax would hit the poorest the hardest, particularly given the abysmal state of public transportation in the U.S. On the other hand, simply raising the CAFE standards will help (and an increase is sorely needed), but that tends to have a rebound effect to it as well. As driving per mile costs decrease, people drive more miles. I can’t put my finger on a cite, but I have seen such studies cited before (I’ll look around some more for a cite). I think a significant tax on gasoline is needed, and I suspect we’ll see something in the next few years, although it may be in terms of a carbon tax rather than simply a gasoline tax. I like Thomas Friedman’s concept of taxing petroleum so that the revenues stay here rather than sending all those dollars to support regimes that don’t seem to like us much.

A coherent program would have to look at all these issues and try to address the pitfalls as best we can figure. My prediction is that there will be a combination of CAFE standard increase and a carbon tax, both phased in over a number of years to minimize economic shocks.

Let’s address the issues one at a time.

  1. Why should the gas tax be kept a flat cent amount over 14 years plus when the services it was designed to fund have increased inflationarily, and when other taxes (e.g. sales taxes) have stayed the same percent of the total bill? What makes the gas tax different that is should, in real money, decrease so much over the years? How can that be justified? (Besides political pandering I mean.)

  2. Especially since now more than ever excessive gas use should be discouraged. Decreasing the gas tax amount in real money is something you do if you want to encourage more consumption of a product not less.

Martin all hybrids (and EVs) are not equal. And to be sure the break-even point varies with the cost of gas, the improved economy of the vehicle, the extra cost of the vehicle, and the miles traveled per year. I’d like to see substantial and lasting breaks to help people afford that higher initial cost and I’d like to fund it in a way that further stacks the deck in balance of choosing fuel sources that do not add as much carbon and do not further foster greater dependency on foreign oil.

Oh I know that any “tax” has no chance of getting a sponsor but how about if we call it a “User Fee Revenue Enhancement”? Abbreviated as UFRE, pronounced “You Free.” Like as in “You. Free of foreign oil!” Just to help get its point across? :slight_smile:

Well, I sort of agree it would’ve made sense to link the tax to the rate of inflation. At least that’s what I would’ve done if I were congress in 1993. But I don’t think its put much pressure one way or another in people fuel consumption.

Ah, there’s the flaw. Why should the government come in and dictate (or set in motion policies which have predictable outcomes) transportation and energy policy? If Americans wish to continue to buy gas guzzlers as gas continues to climb in price, why should the government step in and try to persuade them otherwise? If we, as a society, continue to construct cities and suburban developments which are nearly impossible to use without a car, why should some government egghead step in and say “Uh, hey, this may not be a good idea”?

Whoa, that felt strangely satisfying. I can see the appeal.

Besides, we don’t even really need a gas tax. As demand continues to outstrip the supply of oil more and more each year the price will continue to climb until demand falls. Whether this is the result of an economic recession (a la the oil shocks of the '70s) or consumers demanding alternatives, well, mission accomplished, right?

If we wanted we could begin construction of mass transit in the form of electric trains and buses like other sane industrial nations. Initially the electricity would mostly come from coal and natgas but it could slowly be replaced with renewables over time. However, if we started such a project right now all these trains would be empty, so it’d be kinda silly. Oil is just way too cheap right now and our culture is obsessed with the happy motoring lifestyle.

The main problem is that anything we do to move away from the current system will be monstrously expensive. Over the past fifty years we have spent trillions upon trillions of dollars on car friendly infrastructure. Perhaps when the time comes we can ask China nicely for a payday loan?

And if you can’t wait that long you can move. It’s pretty easy to find other countries with better mass transit. Our train system would be an embarrassment to some third world nations.

I can see a bright political future for any Republican who, when the time is right, presents weaning the nation off oil as a matter of national security and paints naysayers as America haters. Good side: wouldn’t need to lie so much.

It was and is 100% of a surcharge, since it is a surcharge. You mean:

Delaying the inevitable is surely a good thing, if the extra time “can be used to produce a RELIABLE transportation alternative to gasoline vehicles”?

Pretty sure there were stores before oil.

On the other hand, if we raised the tax 30 cents a gallon back when it was $1.50, and used the money for research in alternate energy sources and fuel efficiency, perhaps we’d be in better shape now. California gas prices have been the highest in the country, and that influenced people to save enough to actually reduce, in real terms, not per capita, the use of gas.

As it stands, we’re paying a massive tax to the Saudis, the Iranians, and Hugo Chavez, which I’m sure thrills you as much as it thrills me.

Pretty sure your local store wasn’t one of them. Without knowing your local store, I’ll wager that it’s almost entirely dependant on oil to get its wares to it (not to mention the manufacture or farming of those wares). And that you shopping – whether you walked there or not – there encourages the store to buy more product, thus using more oil.

And we can go back to that business model pretty easily.

By the way, we’re piling all of the horseshit that results in your yard. :slight_smile:

As I view gas prices in the USA from across the border, I have a chuckle at the US reaction. Here in most of Canada we pay at least a dollar more per gallon and I know Europeans pay even more.

Guess what? Oil is running out. AGW is a fact.

If the US doubled the price of oil with taxes, the market will respond with providing alternatives. The extra revenue could be used to reduce the clearly regressive income tax and provide relief to the poor who don’t get taxed.

I don’t suggest that gas taxes should be raised all at once.

Sooner or later the price of oil will hit $200 a barrel, and the rich oil producing countries and oil companies will reap the benefit of the price increase. Better the US citizen, wouldn’t you say?

The federal gas tax is only one part of the equation. States also impose gas taxes. Furthermore, most of the funding for transportation infrastructure is paid for by states, so the first premise of the OP is off-base. State gas taxes have been rising over the years.

A better system is to do away with the federal gas tax completely and let states assume the full burden of infrastructure costs, to be paid for by raising state gas taxes. There is no reason to have the money to go Washington, D.C., and then be given back to states for transportation needs. It only means that when the federal transportation authorization bill is passed every six years or so, Congressmen have the chance to introduce a variety of earmarks (Bridge to Nowhere, anyone?) to fund worthless projects.

When oil is truly becoming scarce, prices will rise on their own.

The gas tax should stay dedicated to funding infrastructure, not to paying for social programs. Also, how is our income tax “clearly regressive”? The richest people in our country pay the overwhelming share of taxes and most low-income people pay nothing.