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2 US Senators Propose 12-Cent Gas Tax Increase
An anonymous reader writes There are several proposals on the table to stave off the impending insolvency of the Highway Trust Fund (which pays for transit, biking, and walking projects too) in two months. Just now, two senators teamed up to announce one that might actually have a chance. Senators Bob Corker (R-TN) and Chris Murphy (D-CT) have proposed increasing the gas tax by 12 cents a gallon over two years. The federal gas tax currently stands at 18.4 cents a gallon, where it has been set since 1993, when gas cost $1.16 a gallon.
Good!
a. Gas is much too cheap in the US.
b. We need a lot of infrastructure work.
Of course, I'm sure we could afford to pave all of our roads with gold, have diamond-studded bike lanes, and solid titanium sidewalks if we didn't spend half our budget on wars, but hey, I'm not holding my breath. There's not as much room for corruption in building roads in this country as there is building roads in some 3rd world country that we bombed into oblivion.
I don't respond to AC's.
er, 12 cents. Same difference....
Faster! Faster! Faster would be better!
Does your government also spend untold billions on illegal surveillance of the population, secret "black" prisons abroad, and wars against the personal freedoms of the citizens?
If so, then yea, it's terrible that our fuel tax is so much lower than yours. If not, well, then it's really a completely different situation.
An enigma, wrapped in a riddle, shrouded in bacon and cheese
12 cents won't affect me one bit. It certainly won't change my driving habits. The poor on the other hand.. well, let's just say if you're living on a fixed income and/or are already below the poverty line a nice big regressive tax might sting a little...
Defund the NSA, we'll have all the money we need for roads and infrastructure. And then some.
An enigma, wrapped in a riddle, shrouded in bacon and cheese
The issue with the gas tax is that it is a fixed amount per gallon and the real value falls over time with inflation. The only way for the gas tax to keep up is to index it to inflation. Otherwise you will continue to see the Highway funds periodically getting depleted until you have to pump up the tax again. Much better to permanently index the tax to inflation rather than have these periodic increases. Of course you could argue that there are better ways to tax in order to raise transportation infrastructure funds. But if you are going to stick with the gas tax, then index it.
Do you also have the equivalent of a state tax on gasoline?
The government only pulled in $1,934,919,000,000 this year so there's obviously not enough to go around.
Because that would take the cost directly out of our monied overlords' pockets. Instead, this way the peasants cover almost the whole bill and the ultra-rich don't even notice the difference.
"When information is power, privacy is freedom" - Jah-Wren Ryel
Walk? On what sidewalks? Our city did a cost estimate to put sidewalks in the most dangerous highway in town, and when the price exceeded three million, scrapped the idea.
And another pedestrian died just last month.
Occasionally living proof of the Ballmer peak.
Since the gas tax is ostensibly for the construction and maintenance of roads and highways, it should be compared to that. The cost of maintenance and construction scale mostly according to CPI, not the price of gas. I can't think of any reason why you'd compare the tax to the price of gas unless you're deliberately trying to mislead people into thinking it needs to go up more (political arguments about energy taxes aside).
Putting $1.16 into an inflation calculator yields $1.90 in 2014 dollars, or a 64% increase. 64% of 18.4 cents is 11.7 cents. So a 12 cent increase is exactly what's needed for the tax to keep pace with inflation.
You're on the right track but your example is not interstate commerce. The money was paid and the goods provided in just one state.
1993 average gas price: $1.16.
Since the current national average gas price is $3.675, an increase of $2.515, it would seem only fair that instead of a gas tax increase, they should propose a tax credit of $2.331/gallon ($2.515, less the 1993 tax rate of $0.184).
Just sayin...
Authority questions you. Return the favor. -- d474
Since we subsidize the energy sector with tax payer dollars already to the tune of $2.4B per year, why don't we simply reduce the subsidy to pay for new infrastructure?
Too easy?
Subsides? Don't you mean TAX CREDITS?
You do know that we collect BILLIONS from energy companies in taxes right? Exxon Mobil paid 24 BILLION in income taxes in 2013 on 57 Billion in profit according to their latest 10-K. I don't understand how that's being subsidized... Seems like they are paying lots of taxes to me, nearly 50%. And I just picked Exxon out of the air, knowing it was a US company. I'm sure the others paid similar amounts. On the other hand GE paid, according to their 10-K only 4.2% in income taxes, mainly because they move money offshore and do their business there.
I think your barking up the wrong subsidy tree myself.
"File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
Why is it the only time Ds and Rs can agree on something is when they're reaching their grubby little hands into my wallet?
Mod me down with all of your hatred and your journey towards the dark side will be complete!
The US population is much more spread out. Our land area is over twice the size of the entire EU but we have only about 63% as much people. What works there doesn't necessarily work here.
"People who think they know everything are very annoying to those of us who do."-Mark Twain
Yes it does actually, its the UK.... I made a typo of course, thats 128cents tax per LITRE
The US Government has spent over a trillion dollars funding a war in Iraq and Afghanistan, over 6 billion dollars funding a revolt in the Ukraine, at least 9 million dollars funding rebels in Syria (I have not looked at any numbers past what Obama did last September), Billions in beefing up US Local police forces, Billions more on DHS, FEMA, and the TSA, Billions more funding Egypt's various revolutions, and untold amounts in "black budgets" all over Africa. Even the GOA who is supposed to ensure accountability for spent tax dollars, spends millions on a lavish party for 33 people in Las Vegas.
And you think average people who's salaries and average wealth has gone down by nearly 30% in the last decade alone should pay even more money because they could not spent anything on Roads and Infrastructure whilst they pissed away your money everywhere else?
-The wise argue that there are few absolutes, the fool argues that there are no probabilities.
Instead of taking a hard look at where the money in the Highway Trust Fund is going, their solution is to simply bring in more money. The HTF was originally set up to fund the building of the Interstate Highway system. Period. That was it's sole purpose. Those funds were transferred to various States to build and expand the IH system as needed.
Fast forward to today and the HTF resources are being funneled into Transit systems, ferry boats, bike paths, and nature trails. All worthy causes but the money should not come out of the HTF. That's why it is underfunded.
This is the same trick that politicians play time and again. It happens with Education, Social Security and other items.
The tax-per-gallon is over 2x as much as the oil companies themselves get from it in profit (currently $0.184 for the feds vs. ~$0.08 for the so-called evil oil companies).
So yeah, what the hell - let's nearly double the gas taxes *and* jack up prices for everything else at the same time - after all, these chumps in congress don't have to pay it (their transportation is almost fully provided either gratis or reimbursed, for as long as they're senators...)
Fuckheads. I'd rather see a direct income tax hike - at least that way it's an honest attempt, and it doesn't jack up the price of everything else.
By the way... did someone forget to inform these dummies that the economy hasn't exactly recovered yet?
Quo usque tandem abutere, Nimbus, patientia nostra?
Gas is too cheap so the government must artificially raise the price.
No, infrastructure is too expensive for the funding we have in place. Gas is the best proxy we have for usage of that infrastructure so it's reasonable to tax that. More gas used means more infrastructure repairs needed and less gas used means less use of said infrastructure.
We have set aside funds for infrastructure. 18.4 cents of every single gallon of gas sold in the US! Where does that money actually go?
To maintain the infrastructure - duh. That's pretty much a matter of public record. It's a big country and we have a lot of crumbling roads. Furthermore 18.4 cents doesn't go as far as it did 20 years ago. In fact it is roughly equivalent to $0.11 cents in 1993 dollars once you adjust for inflation. Much of this infrastructure is paid for with federal dollars so it makes sense to tax it at the federal level.
Well over 25% of gas tax funds go to side walks and bike trails and shit like that.
Citation needed. That number smells like you just pulled it out from where the sun don't shine.
Fuckheads. I'd rather see a direct income tax hike - at least that way it's an honest attempt, and it doesn't jack up the price of everything else.
Besides, the gas tax is regressive, because it hits the poor hardest. At least the income tax is designed to be progressive (even though most of the elites at the top pay very little or none at all, thanks to tax code favoritism).
"Somebody has to do something. It's just incredibly pathetic it has to be us."
--- Jerry Garcia
And if its going to scale to anything it should be correlated to vehicle weight.
And what good is that if the vehicle rarely gets driven? Gas is a reasonable proxy on average for vehicle weight. Bigger cars generally consume more fuel. Yes there are some gas guzzlers that consume more than their share but there also are some fuel sippers that consume less. There are environmental benefits to taxing those who needlessly consume more of a resource than necessary.
A Ferrari may drink 4x as much gas as a Honda Civic, but it causes the same wear on the infrastructure.
You're looking for a perfect proxy for road usage. Stop. There isn't any perfect measure you could use that is practically feasible. Gas usage is about as good as it gets. Bigger cars generally consume more gas and cars that drive more consume more gas. You price for the average and adjust for inflation. Perfect is the enemy of good here.
Why would you do that? There're the primary source of targeting data for the 700 Billion we spend every year on the military. It would be like buying a brand new GPS and then not loading it with any maps to save money.
Is it just my observation, or are there way too many stupid people in the world?
I don't even notice when gas changes by $.12 per gallon any more. The change in gas prices does not change my need to buy it. Not that I would rather not spend that much, but $.12 per gallon on a 15 gallon tank is only $1.80. Considering I pay $3.50 - $4 per gallon, that is roughly the cost of half a gallon or less. I won't notice it. Even if I fill up every week, $1.80 * 52 weeks is only $93.60 over the course of a year which still is not a large pile of money. If I drank coffee I would probably spend that much on coffee in a month or less.
Damn_registrars has no butt-hole. Damn_registrars has no use for a butt-hole.
America, where poor people drive cars.
Gas tax increases are a good pricing signal to increase fuel efficiency (better than CAFE standards or cash for clunkers).
There are two philosophies behind taxation.
One says that taxes are a necessary evil in order to pay for the things that government does. This is what the founding fathers felt. This is the reason for gas taxes in the first place: to pay for roads built by the government.
The other says that taxation is necessary for the reduction of evil, for whatever some group currently defines as evil. You believe that the use of fossil fuels is evil, therefore the taxes should be consistently increased to force a decline in use. This is not what the gas tax was instituted for. Some people think that simple "wealth" is evil, and thus there needs to be a tax to reduce that evil.
If we had started a decade ago today we'd have an extra 50c per gallon incentive to buy a more efficient vehicle and the insolvency of the highway trust fund would be another decade plus in the future.
Some people in both camps are always surprised to learn that taxation is not a zero sum game, despite repeated demonstrations of that effect over the years. Simply doubling a tax does not double revenues from that tax. For example, the states that thought they'd pay for their health care systems by increasing the taxes on cigarettes have learned that increased price per pack has resulted in a decrease in revenue as more people stop smoking. Increasing the gas taxes will cause less use and less tax revenue, so it will be harder to pay for the things the gas tax is intended to pay for. Part of the decrease will be from people who buy electric cars that pay NOTHING for road use. And some of the decrease will be from people who simply stop driving, which makes the idea of a tax credit for the poor people just another way to redistribute the wealth. (Yes, that is exactly what a credit to reimburse someone for paying a regressive tax when they didn't pay that tax to begin with, is.)
Those in the "eliminate evil" camp should realize that "Stop smoking" would be one result, since that was their goal in supporting that tax increase. And yet it is a surprise when revenues go down when fewer people pay such taxes.
The same thing is happening with the gasoline tax. The higher the price of gas, the less of it people buy, and more electric vehicles. The less gas people buy, the less revenue from gas taxes. It is a self-defeating game, and is dishonest to start with. Usurping a tax into a social engineering tax once it is established as a "pay for services" tax is dishonest. "We need a tax to pay for ..." "Ok, now you agreed to pay for X, we should increase the tax to convince people to behave the way I want them to..."
The correct response to "highway funding is down because of lower use of gasoline" is not "increase the tax", it is "find a way to get the other users of the roads etc. to pay for their use." A milage tax on electric vehicles, for example, and a mandatory registration fee for bicycles, perhaps. But to continually increase the costs for a dwindling fraction of the users of a service is not the right answer, nor the fair answer.
Except the bus actually lowers the road damage. Because those 50 people would otherwise drive 50 cars.
It's effectively the government subsidising buses to reduce the wear on the roads and decrease the amount of roading required.
aka Public Transport
from http://www.cbpp.org/cms/?fa=view&id=1258
Social Security: Another 24 percent of the budget, or $814 billion, paid for Social Security, which provided monthly retirement benefits averaging $1,294 to 37.9 million retired workers in December 2013. Social Security also provided benefits to 2.9 million spouses and children of retired workers, 6.2 million surviving children and spouses of deceased workers, and 11 million disabled workers and their eligible dependents in December 2013.
I know very few places where $1300/mo is enough to live on when you're over 65 and/or disabled. America doesn't have Nationalized Socialized medicine. Even if you manage to get on one of the State run programs you're laying out $100-$200/mo just for meds (God Bless the Big Pharma). Then there's Rent, food, transportation (to the doctor's appointments that are keeping you alive) etc, etc. I know a few ppl on SS Disability, and they live very, very shitty lives.
So can you tell me, why is it we can get a man on the moon but we can't take care of a few million old people and a few million disabled? Are we really that pathetic as a country that we can't just solve this problem?
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
All energy taxes hit the poor the hardest. Increases in gasoline prices cause indirect rises in all food and storebought goods because deliveries cost more. Buses charge more. Riding the bus might become a luxury in favor of buying food.
A few quick calculations, for comparison:
In UK, 1 litre of petrol (gasoline) costs about 1.2 GBP. 1 US gallon = 3.7 litres, so that works out as 7.57 USD per gallon. The OP doesn't actually say what you guys pay, but I get the impression that it is less by a wide margin. The US is also, I believe, the largest economy on the planet, and you spend more energy, per capita, than any other nation in the world. Perhaps you should tighten up a bit on the way you waste energy - I assume it must wasted, because it doesn't look like all that extra energy results in higher, actual production.
I'm sorry I haven't got loads of sympathy, but it does look like a luxury problem to me. Find a way to change the situation - fix the inequalities in your society, so the poorest don't have to struggle in hopeless poverty in order to feed the indulgencies of the rich.
Shocked you're modded insightful when you seem to have overlooked the obvious point that the idea is to reduce consumption,
Shocked that you missed my entire point that there are two philosophies behind taxation, only one of which is to "reduce consumption" of things that some people feel are evil to consume. I was referring explicitly to the unintended reduction in consumption that was a result of a desire to fund a government service through cigarette taxes. Said reduction in consumption left the service underfunded.
Also overall revenues will not necessarily go down,
"Zero sum game" does not mean that it is a certainty that the tax revenues will decrease with increasing taxes, but that it is not a simple calculation that doubling a tax will double the revenue. There are examples of the zero sum nature of taxation where revenues do go up when rates go down, however.