The problem with gas taxes is that they disproportionately affect poor drivers, who are not the ones who buy new cars. Even if gas prices turned European overnight, fuel would still be a relatively small part of the cost of buying and operating a new car. When compared to the huge hit you take on depreciation the first year alone, the difference in fuel spending between a 15 MPG SUV and a 40 MPG compact is pretty miniscule and still wouldn’t be that big even if gas were 8 bucks a gallon.
Most poorer drivers would love it if there were more super-high mileage cars in the used market, since gas is a large portion of the operating costs of a 10+ year old used car. Not to mention a large part of many lower-income family budgets. But they’re stuck with whatever new car buyers wanted 10 years ago, and new car buyers almost always want bigger more powerful cars and are don’t mind keeping them full of expensive fuel.
So, in my mind, this makes CAFE a brilliant way of achieving the goal of forcing car makers to sell more efficient cars without causing undue hardship to poorer drivers nor outright preventing those who really want/need less efficient cars from buying them. Ideally, CAFE should force the car makers to essentially subsidize fuel-efficient cars if they want to keep selling less efficient high-end cars. It doesn’t always work this way, but I think it has helped force car makers to pay at least some attention to a segment of the market they would normally try to ignore in the US. I think the main trouble with CAFE is just that there’s so many loopholes and the car makers who have historically spent so much time and effort fighting attempts to strengthen it.
Just raising the fuel taxes was a perfectly fine way to improve car efficiency in Europe because they don’t have the huge population of “driving poor” the US does, due to more predominantly urban poverty and less car-centric cities. CAFE makes a lot more sense for achieving that same goal in the US without risking some serious social consequences.
This is true, and highlights problems with changing policies overnight. Due to the fact that European fuel taxes have been high for a long time, there are far more fuel-efficient old vehicles available on the European market.
I don’t think the difference is as great as you are making out here. Most Europeans view car ownership as essential, and most poor households own a car, including people who live off benefits.
This seems an interesting question to me, with perhaps several partial answers. The major problem (assuming Dopers are sensible enough to view low gasoline prices as a problem) is the vicious cycle: Low prices encourage long commutes and inefficient vehicles; these lead to a “need” for low gasoline prices.
Parliamentary vs Presidential systems? A priori, I might have guessed that parliamentary systems would be more responsive to voters’ whims.
Competition among separate taxing authorities? Perhaps. A sensible country would treat government and taxes as solutions not problems, but that country is not post-rational America.
Frankly, I’d guess you could go to almost any country and ask the poll question: Would you prefer the government to raise or to lower fuel prices? and Lower would win by a large margin in most countries. Similarly my kid puts high-sugar cereal in our shopping cart and I have to tell him to look for a more nutritious brand. Adult leadership helps! U.S.A. may not be the only country where the lunatics are running the asylum, but it’s the only superpower where the more intelligent lunatics fail to grasp that that’s a problem.
In Thailand, $600/month is still considered a decent salary and gas is about $4/gallon. Most people are reluctant to make unnecessary trips, but I’ve never heard a single Thai actually complain about the high prices!
I think that’s the key. In other countries, the goverment thinks it knows better than the people; in this case, they’re probably right. If you need the money, you need the money, and no amount of populism will change that.
It’s always struck me that Americans seem more attuned to the spending of their “tax dollars” than us*, because I have never heard a British person use a phrase like “tax pounds”! Taxation levels are still a major political issue here, of course, but somehow not as immediate an issue, it seems. Also, as others have said, party discipline is more rigid in our system. People do not tend to pore over representatives’ voting records on tax bills because they almost always vote along party lines. Widespread voting against the party “whip” on a particular bill is a newsworthy event.
with some exceptions - I have asked before about sales tax not being included in sticker prices in the US, and several respondents said that they just don’t think about it. Here, we are acutely aware that VAT is included in the price of most things. Admittedly, VAT is higher than any state sales tax.
I see your point about gas taxes hitting the working poor the hardest, but I don’t agree that CAFE has been successful at getting automakers to sell more fuel efficient cars. Certainly getting the PT Cruiser classified as a “light truck” doesn’t help the situation, but in Europe, you can buy a 1.2L VW Polo, non turbo, making 70hp. In the US, VW doesn’t even bother selling the Polo, because nobody would buy it. Their smallest non-turbo engine in their smallest car is over twice the size at 2.5L.
VW isn’t selling lawnmower engines to European buyers because they like going slow, it’s because gas is effin’ expensive. CAFE hasn’t brought 1.2L engines to the states. Clearly it’s nowhere near as effective as expensive gas.
The three things I’ve noticed that allows for things like gas taxes are:
The federal government in the US doesn’t have the same level of power and capabilities. So like HCR at least one state would be up in arms and push for some sort of legal challenge.
The polarized nature of US politics lands on either side of this issue. Gas tax is “regressive” so the left has to fight it. And it’s a “tax” so the right has to fight it. It’s implementation would be met with tax credits and deductions that would eventually make the whole thing pointless.
Lack of perspective. Americans freak out at $4/gallon gas, but that’s still lower than Canada and Europe. What they think of as high gas prices are actually quite low, meaning that even with a higher tax gas in the US would still be cheap.
The new CAFE standards just started being phased in this year, so its probably too early to tell if they’ll be effective. Historically raising the CAFE standards has been a pretty effective way to raise fuel efficency. Though I agree raising gas-taxes would probably be a better one.
Err…we have gas taxes now. I guess someone might try, but I don’t think anyones going to come up with a very effective legal challenge to raising the rate of an already existing excise tax.
That might have been true in the 1990s, but the Tea Party has in general shown much more willingness to mount legal challenges to Federal authority regardless of how ill-advised those challenges are.
OK, but I don’t think we’re holding off on gas-taxes because we’re afraid there will be legal challenges that won’t go anywhere. The constitution explicitly gives Congress the power to levy excise taxes, even the most conservative judge in conservative land isn’t going to find that they can’t do so. The GOP can waste some money on lawyers to try and mount challenges if they want to, but I can’t imagine anyone will even care enough to notice.
But we’re lucky we even get what small cars we do. The profit margin on small economy cars is notoriously low and car makers hate selling them unless they absolutely have to. CAFE forces them to, even if they’re selling them at a loss. For example, Ford supposedly lost money on the 1st generation Focus, but they still sold tons and tons of them because is enabled them to sell a lot of their ever larger high-margin SUV’s. It’s also no coincidence the Prius (also initially a no-profit model) was introduced right around the same time Toyota started really pushing the high-end large SUV’s. Of course, they can also meet their standard by making all their cars more efficient with hybrids and diesels. That’s not as good for someone like me who would like to see more cheap econoboxes in the used market, but it has the same effect.
CAFE would be more effective at bringing in high-economy cars if there were the political will to really ratchet up the economy standards though. And I think raising the CAFE standards significantly is a much more politically-realistic possibility than seriously raising gas taxes. I personally think a good approach would be to stop letting car makers just pay fines for not meeting their CAFE standards (some high end marques like Ferrari just factor the fines into the purchase cost) and instead institute some sort of “cap and trade” type system where if you don’t sell enough efficient cars to meet your standard, you have to buy credits from a company that sells excess. That could encourage big car makers to bring in more of their efficient international line up, but it could also really help foster smaller companies that could specialize in efficient or alternative fuel cars (like Tesla, maybe).
The US has fixed and more frequent election cycles. A parliamentary government can pass something unpopular, then hope to hang on without calling an election until enough time has passed that the issue recedes. US House members, by contrast, are campaigning almost constantly.
Well, theoretically the Prime Minister can call an election at any point in the five year term, but in practical terms it’s always between Year 4 and 5; otherwise, you’re killing off your own government early (potentially).
Not only many levels of government, but many non-exclusive levels of taxation. In the US, a single person can pay, for example, income tax on the exact same income on up to four levels (Federal, State, County and City): in the other countries whose taxation structures I’m familiar with, that’s considered double taxation and therefore Can Not Be Done. For example, in Spain you can pay income tax to the regional government (if your address for tax purposes is in Euskadi or Navarre) or to the national one (if you live anywhere else), but you can’t be taxed at both levels.
Sure it has. GM sold a ton of Geo Metro’s with first a 1 liter and later a 1.3 liter engine.
The rub with CAFE is that it does nothing to address the consumers desire for larger vehicles with more power. So eventunally technology catches up to it. The government ratchets up the standard and for a while the manufacturers design and sell tiny engined, light weight, vehicles to meet their average until they develop sufficient technology to improve the efficiency of their power trains that the majority of customers really want to buy. Then you see them moving away from the tiny engined, tiny car market until the CAFE standard gets ratcheted up significantly again.
$7.53 / $4.15 = 1.8x fuel price difference
$9.52 / $5.68 = 1.7x Big Mac Meal difference
Leads me to believe comparing European fuel prices is not as simple as doing a straight price conversion. Maybe someone can do a gallon of fuel as a percentage of cost of living comparison?
this site I know from experience to be reasonably accurate.
** this site I have no experience with and have not been in Minneapolis for 9 months so the number is perhaps suspect.
Now we’re into the issue of how the US has the cheapest food in the world. I was in Australia last year and those numbers were easily 3x. Americans spend less of their income on food than any other country (or so I’m told).
This site
Says Americans spend about 13% on food and 15.6% on transportation. $50k worth of income buys considerably more in the US than every other country but Luxembourg.
ETA I never saw $4.18 in MN, highest I saw for regular was $3.99. MN also tends to have lower cost than the national average.
ETA 2 Closer examination shows the average American spends 4% on petrol.
A priori, I might have guessed that parliamentary systems would be more responsive to voters’ whims.