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The Downside to Low Gas Prices
HughPickens.com writes Pat Garofalo writes in an op-ed in US News & World Report that with the recent drop in oil prices, there's something policymakers can do that will offset at least some of the negative effects of the currently low prices, while also removing a constant thorn in the side of American transportation and infrastructure policy: Raise the gas tax. The current 18.4 cent per gallon gas tax has not been raised since 1993, making it about 11 cents per gallon today, in constant dollars. Plus, as fuel efficiency has gotten better and Americans have started driving less, the tax has naturally raised less revenue anyway. And that's a problem because the tax fills the Highway Trust Fund, which is, not to put too fine a point on it, broke so that in recent years Congress has had to patch it time and time again to fill the gap. According to the Tax Policy Center's Howard Gleckman, if Congress doesn't make a move, "it will fumble one of those rare opportunities when the economic and policy stars align almost perfectly." The increase can be phased in slowly, a few cents per month, perhaps, so that the price of gas doesn't jump overnight. When prices eventually do creep back up thanks to economic factors, hopefully the tax will hardly be noticed.
Consumers are already starting to buy the sort of gas-guzzling vehicles, including Hummers, that had been going out of style as gas prices rose; that's bad for both the environment and consumers, because gas prices are inevitably going to increase again. According to data from the U.S. Energy Information Administration, taxes last year, even before the current drop in prices, made up 12 percent of the cost of a gallon of gasoline, down from 28 percent in 2000. And compared to other developed countries, US gas taxes are pretty much a joke. While we're at it, an even better idea, as a recent report from the Urban Institute makes clear, would be indexing the gas tax to inflation, so this problem doesn't consistently arise. "The status quo simply isn't sustainable, from an infrastructure or environmental perspective," concludes Garofalo. "So raise the gas tax now; someday down the line, it will look like a brilliant move."
Consumers are already starting to buy the sort of gas-guzzling vehicles, including Hummers, that had been going out of style as gas prices rose; that's bad for both the environment and consumers, because gas prices are inevitably going to increase again. According to data from the U.S. Energy Information Administration, taxes last year, even before the current drop in prices, made up 12 percent of the cost of a gallon of gasoline, down from 28 percent in 2000. And compared to other developed countries, US gas taxes are pretty much a joke. While we're at it, an even better idea, as a recent report from the Urban Institute makes clear, would be indexing the gas tax to inflation, so this problem doesn't consistently arise. "The status quo simply isn't sustainable, from an infrastructure or environmental perspective," concludes Garofalo. "So raise the gas tax now; someday down the line, it will look like a brilliant move."
Gee, 0.001% of consumers are now buying gas guzzlers so PANIC!!!! Meanwhile the rest of us drive as little as possible and enjoy saving $10-20 a week on gas prices. I live in California. The problem with raising the gas tax is that money goes into the cesspool that is the general fund, instead of being dedicated to roads and bridges. How can giving the bozos in Sacramento more money to piss away ever be considered a Good Thing (tm) ?
"The increase can be phased in slowly, a few cents per month, perhaps, so that the price of gas doesn't jump overnight."
Oh yeah, because that never happens today when Puxatawnie Camel farts in the wrong direction...give me a break.
Gas prices sometimes vary 10% on a weekly basis. So when prices are down by 25% for a single month, the do-gooders want to raise it back up and "hope" we won't notice when gas costs rise back to their "normal" levels? So I should expect $5 a gallon gas when prices restabilize? I pay surcharges on shipping, trash hauling and a number of other services because of high prices. Fuel prices are one on the reasons the economy has had trouble recovering.
Take your social engineering tax and go suck my balls. When I get 20% annual raises, you can ask too.
There is no downside to lower gas prices. lower prices on anything is always a positive.
we as a group are saving billions a day after a very long recession. The gas prices are still not low enough to help those who need it most, the poor and lower middle class.
have you seen my sig? there are many others like it but none that are the same
Uhm no, one Prius maybe doesn't do a lot of damage to the road. Hundreds of thousands of commuters on their private cars certainly do. I say, either implement a use tax for roads (you know toll booths even for normal roads) or tax gas at a decent level. And tax the hell out of gigantic cars (SUVs and other monstrosities that have no place on roads and inside cities).
Every dollar taken away from a citizen to be spent by the lawmakers and bureaucrats, robs the citizen of his freedom to spend that money the way he would have chosen.
Illiberals, of course, love that. Statists, as somebody put it, gonna state. Their sheep are bleating, that they "love" paying taxes because with them, you see, they are "buying civilization" — the irony of using the term referring to a volitional act to describe a mandatory wealth-transfer escaping them...
Why do the rest of us even listen to these types — instead of running them out tarred and feathered?
Yeah, and so is the Postal Service — despite raising its prices several-fold — and so is, pretty much, everything the government runs. What tax-increase would Pat Garofalo propose, to compensate the USPS for people sending fewer things by mail?
To enter (or leave) New York by car, one has many options — most of them involving a toll of $10+ (in addition to the fuel-taxes). Why can't those bridges and tunnels be privately owned and compete with each other? Maybe then they'll start treating drivers as a profit opportunity, rather than a nuisance... And fight back the toll-collectors' union thugs — those aren't exactly demanding jobs, but they pay over $30/hour, because the money does not currently come from the pockets of the people approving pay-increases.
In Soviet Washington the swamp drains you.
Rename it 'The Transport Infrastructure Trust Fund' (which is what it has become). Problem solved.
Although the world seems to focus on America, we must remember that aside from subsidized countries like Venezuela, Americans enjoy an average gas price that is much less than the global averages. That said, we must understand that the recent movement in crude prices is in direct correlation to the ongoing strategy that the United States has with choking off Russian monetary supplies. It's not a conspiracy theorist and as a pure market technician, which can be defined in my book The Market is not Random., the market foretold this sell off going all the way back to the swing sell in May...
Whenever one mentions that gas prices are so much higher elsewhere and that American's are lucky, one should also mention the why of gas prices being higher else where. It's almost always, if not always, entirely due to punitive taxation on fuel. According to the BBC filling up a 55 liter tank would currently cost about 68 pounds, of which 43 is bloody taxes. So, gas in the US isn't cheap. It just isn't taxed to death like in other parts of the world.
I was raised on the command line, bitch
"Nemo me impune lacesset"
Taxing consumers as opposed to commercial vehicles is a terrible idea; it would have the effect of subsidizing heavy vehicular traffic. If we're going to subsidize freight, we should invest in rail infrastructure.
Consumers will subsidize commercial traffic no matter what - either directly by higher fuel taxes, or indirectly through higher prices for goods. Agree 100% on expanding our rail options though.
Please stand clear of the doors, por favor mantenganse alejado de las puertas
Why do people seem to take political propaganda at face value, as if this article actually carries weight as a piece of economic advice, ha ha ha.
Because outright propaganda is what they get from the major news networks (Fox, MSNBC, et. al.), so they can't tell the difference.
"They that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety."
none of that has anything to do with our spending on roads, we have a spending problem to begin with. we would have plenty of money to fix our roads if we stopped spending it on social programs and wars and went back to the basics.
have you seen my sig? there are many others like it but none that are the same
The USPS hasn't raised prices several-fold. The price for a stamp has gone down in inflation adjusted terms since 1975. And we all know WHY the USPS is broke. Not because it can't deliver letters, but because it's being forced by Congress to prefund its pension/healthcare/workers comp funds to an absurd extent, and not permitted to invest in anything but government bonds.
Bridges have a natural monopoly over their local environment. In fact, in NYC there are completely free options to get out of the city, but most people still use the toll bridges because time equals money, and most people aren't willing to drive five miles out of their way in traffic to save $7.50 or $10.00. With that in mind, why would a private bridge owner have any incentive to lower prices? They would be like cable companies, using their monopoly to gauge consumers to the greatest extent possible. Prices would likely go up since the owners would be completely unaccountable to their customers.
And btw it might be decent in some parts of the country but $30/hr is a shitty wage in NYC.
There are two kinds of people: 1) those who start arrays with one and 1) those who start them with zero.
Except greater gas consumption and the associated pollution. But hey, profits are private, costs are public, right?
So you'd prefer Iran to have been able to afford the price of acquiring weapons-grade plutonium? Or perhaps you'd celebrate a pay cut for yourself?
You, as a group, are externalizing costs and setting yourself up for an even harder fall when the next price hike comes.
Higher minimum wage and unemployment benefits would do a lot more to help the poor while avoiding the problems associated with direct and indirect gasoline subsidies, which is what ignoring pollution ultimately amounts to.
Forget magic. Any technology distinguishable from divine power is insufficiently advanced.
Snow is not really a problem for a bicycle. Neither is carrying stuff, for that matter. That is what racks are for. Your picture of a bicycle is a bit skewed by all these fixie riding hipsters, but this kind of a bike is, thankfully, a small minority (but with loud owners).
"It's such a fine line between stupid and clever" -- David St. Hubbins, Spinal Tap
It is much better for the price of the goods to reflect the full cost of the roads the trucks use to haul them than for fuel taxes for all vehicles to provide indirect subsidies for the "road hogs". If the full cost of the road use is included in the cost of an item then there is direct pressure to make the use of roads for any particular item maximally efficient. The items which don't need to be hauled far will properly cost less, encouraging efficient use of the roads and other infrastructure. That is how pricing is supposed to work in an efficient free market.
I have done the same, in Germany though. None of your mentioned problems whatsoever.
"It's such a fine line between stupid and clever" -- David St. Hubbins, Spinal Tap
I have arthritis in both knees, my friend has a deformed hand, an acquaintance is eighty and a young man I know has asthma. Glad to see you think in broad, general terms instead of myopically focusing on solutions that work for yourself.
Gasoline is taxed by the gallon, not the dollar. Lower priced gas means more driving and more taxes for the highway funds.
Fifty years of Yippie! 1968-2018
It's almost like you have never used public transit before. They don't run empty trains, they run fewer of them. On peak hours, the trains come back to back. Other times you might wait 5-10 minutes. As far as the number of stops, again they are way ahead of you. Many cities have express trains that only stop every 5+ stops, which you take to the nearest junction and then switch to the local train to get to your final destination. Your arguments are all completely wrong.