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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."
"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.
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
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"
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.
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.