Would a gas tax that’s a percentage of sale price, rather than per gallon, solve the problem?
No. The real problem is that all cars burn less gas. Electric cars burn none at all. Our gas taxes were created when cars got 12 mpg. We are never going back to those days. If people don’t buy gas, it doesn’t matter whether the tax is a percentage of price or an amount per gallon. And electric cars still wouldn’t be paying anything.
I personally favor the mileage user fee as it seems the most simple to me.
As for Google cars replacing privately owned vehicles, that would only work in densely populated areas. People who live 40 miles out of town are not going to wait an hour for their car to show up. Besides, who wants to ride in a car that somebody else’s dog threw up in? How does it work for people who must carry large amounts of tools, papers, etc, with them? What do you do when you come out of the grocery store at 10pm and it is dark and rainy and there are scary people standing around and your car has wandered off?
I do think a more robust gas tax would be a good short-term tax: carbon emissions are a problem and are directly related to amount of fuel burnt, so folks with cars with better mileage (full disclosure: my car’s mileage is awful, this isn’t a self-serving idea) might justifiably pay less.
But long-term, it’s politically unfeasible, it seems.
Are tractor trailers going all electric too? And don’t they cause the vast majority of wear for bridges and road surfaces? So, if they’re remaining diesel powered for the most part, and if they cause most of the wear, then why not make up the (proposed) shortfall in highway maintenance revenues from a massive switch to electric-powered passenger vehicles with a two-fold supplement?
First, add a tax to the purchase of new electrically powered passenger cars to recapture some of the revenue loss. Second, raise the fuel tax on diesel.
(And third, figure out how you’re going to pay for the giant expansion of the electrical grid that will be necessary to pay for a significant proportion of the American public switching their vehicles to electric power from gasoline. The last time I played with some back-of-the-envelope numbers, for a 50% switch from gas/diesel to electric, I figured you needed something like 150% of the current U.S. power grid. I.e., charging automobiles will be a very large component of future electrical loads, and the current grid can’t handle such an increase.)
Cecil’s column failed to mention that the Highway Trust Fund is already depleted and has been “bailed out” several times in the last few years. It will run out again this year if nothing is done.
And in the last decade or so, about half the projects meant to be funded from the Highway Trust Fund have been funded out of general funds instead.
So we are well on our way to abandoning the gas tax, simply because the GOP Congress can’t or won’t raise the gas tax. All that talk about no new taxes and crap like that. They painted themselves into a corner.
Infrastructure is a public good, and everyone benefits – not just drivers.
Maybe it’s time to use general funds, and increase taxes regressively to cover costs?
I agree. Why should transportation have its own little separate tax and separate fund? That encourages overspending on highways when the fund is full, and underfunding when it isn’t, as is the case now. And it is a public good like any other.
I think the only reason its done this way on the federal level is that, unlike at the state level, a tax on consumption, rather than income, is unusual. To tax gas at the retail level when they don’t normally tax retail sales, they felt they had to dedicate the spending, otherwise they’d be accused of singling out gas for a special tax.
I believe electrically powered passenger cars are currently subsidized by a federal rebate program. Removing that, or adding a tax on them, would risk severely curtailing adoption rates and thus electric-car-related innovation.
Did you mean “retroactively”? Or do you actually propose people with fewer assets or less income pay more of this tax than people with more?
I mean “not progressively.” Or maybe a little progressive if you’re worried.
Cars get better gas mileage than before, so we need another way to tax miles traveled. The answer seems obvious to me. Tax tires. For new car sales, tax those tires, too.
That’s not a bad idea. My only issue with it is that I’d prefer a tax that gave an incentive to more energy-efficient cars.
I think the easiest way is an odometer tax, figured out annually when you renew your tabs.
As usual though, the devil’s in the unintended consequences. Some really sketchy math:
Rated miles for an average tire: 50,000
Average car milage per gallon: 24
Gallons of gas per tire: 2,083
Federal gas tax per gallon: $0.18
Average cost of a tire: $75
Tax that would need to be added to every tire to replace the gas tax: $375
If the cost of tires were to go up ~500%, a lot of people would likely start driving a lot farther on their tires than they should. That means more unexpected blowouts, more highway accidents, more injuries and deaths.
Nah, the tire manufacturers could simply loosen their manufacturing tolerances to make your first figure (50000 miles per tire) much smaller. They’d save on quality control expenses, and customers would spend the same amount on each tire (after including the gas tax) but at more frequent intervals. Then the cycling commuter’s experience of thin tires needing replacement every couple months can be shared with motorists as well.
Would that be a flat percentage?
There’s a perception of fairness in these types of taxes. The user who benefits the most pays the most. Another advantage is that at least these funds must go to where they’re designated. Raiding the Highway Fund to fund something else is hard to do.
Is it a good way? No. There’s a reason why we vote for a legislature whose job it is to oversee the budget and to vote on the allocation of resources. It’s the prime job of government, and when we dedicate funds that automatically go to a particular project, we lose a bit of our democratic heritage. In California, much of the budget is automatically allocated by various Initiatives and Referendum. A certain percent of this goes for that. The legislature ends up fighting over the tiny remnants and can’t reallocate resources as needed. Automatic trust funds like this also take responsibility off from the legislature. Your roads bad? Don’t blame your congressman for voting against the highway funding bill! There wasn’t one.
Besides, money is fungible, so source and destination doesn’t really matter. It’s like all the lotteries that support education. Did the amount of money that goes for education actually increase when lotteries started. No. Imagine a state with a $50 million budget for education and no lottery. The legislature allocates $50 million to education.
The next year, the state gets a lottery where all money goes towards education. That lottery raises $30 million. Does the next year education budget get $80 million? Of course not. The next year, the legislature reduces the education budget from the general revenue from $50 to $20. Then, they give education that $30 million from the lottery. Education’s budget is $50 million just like the year before.
Now, there’s an extra $30 million sitting in the budget. It gets allocated to someone’s favorite Porky Little Project. All laws were legally compiled with. All rules followed.
“Devil in the unintended consequences” indeed! I’d feel much more comfortable knowing that the nails and glass shards littering the roads are less likely to result in a 2-ton vehicle going out of control than a 300-pound bicycle+rider. If all tires were equally likely to puncture upon hitting such debris, and motorists made the same rationalizations as cyclists do for not keeping to a regular tire replacement schedule, we’d probably see a lot more fatalities on the road.
This is why our overall tax system is screwed up right now: everyone wants a loophole that benefits themselves somehow. The transportation infrastructure is a public good.
That wouldn’t account for miles spent on private roads, though.
A flat percentage of what? When I mentioned regressive tax, I meant “everyone pays.” The current system is very regressive. If you’re poor and have a car, you pay substantially more of your income in fuel taxes than someone like us. On the other hand as a public good, I’m okay with an “everyone pays” model. Since it’s not likely that we’ll sell all of the public roads to private enterprise, the best model is to simply fund the roads as needed without depending on specific earmarks, i.e., use general funds and spend less on, say, F-35’s that no one wants.
Yes, but it still comes down to implementation. Do you tax income? Do you tax fuel? Do you tax tires? Do you tax car registrations? Do you tax property? Taxing fuel isn’t fair, because electric cars use the roads but don’t use fuel. Taxing tires is better, but just taxing tires is going to make them prohibitively expensive. Taxing car registrations a flat fee is a different option than taxing car registrations per odometer mile.
Taxing fuel does encourage more fuel efficient cars. Doesn’t make it the best option.
Also, encouraging more fuel efficient cars isn’t necessarily intended as a benefit for the user. The public good benefit is less carbon dioxide and less pollution.
No plan is perfect. What about a flat fee on registration? Except that is different than taxing roads for their actual usage. A person who only uses their car back and forth to the store pays as much as someone who drives across the state every week doing sales.
You said increase taxes, so whichever taxes you were talking about increasing, increase them a flat amount versus increasing them a constant percent versus increasing them by a progressive scale based on value or whatever.
A flat amount is regressive, a flat percent means everyone’s goes up based on what they were paying, and an increasing scale based on the value is progressive.