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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."
Simply change the tax structure on commercial trucks which are the ones that do all the damage to the roads and highways. You fuel efficient Toyota Prius couldn't damage the road if it tried.
https://en.wikipedia.org/wiki/...
Prior to the 1956 Highway Revenue Act and the establishment of the Highway Trust Fund roads were financed directly from the General Fund of the U.S. Treasury. The 1956 Act directed federal fuel tax to the fund to be used exclusively for highway construction and maintenance. The Highway Revenue Act mandated a tax of three cents per gallon.
It's been a political ping pong ball, and whenever I read the word "consumer" I think "stupid". seriously think of the implications of calling people " consumers, the psychology there.
It's very much like a rancher discussing his cattle.
"If any question why we died, Tell them because our fathers lied."
"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.
I wonder who's actually behind this message? I mean, most folks aren't exactly going to come up with a mythical downside to "low gas prices". Who even goes, "Oh my god, gas prices are too low!" when they wake up in the morning?
No one. No one who isn't in the gas industry. Lower gas prices mean higher possible margins for those selling gas. Low gas prices mean you get more money for your buck on your long drive to work, that your bread costs less in the store, etc, etc, ad nauseum. .
As opposed to....what.. not fixing roads?
But that's exactly the problem.
...is "broke" because we're funding a lot of things out of it that aren't highways.
If the money was used as originally intended - to fund building and maintenance of the Interstate highway system - it would be brimming with cash. Instead, it's also being used for lots of other projects, like mass transit, bicycle paths, and landscaping for roads. About a quarter of the income from the HTF goes to non-highway projects.
Oddly enough, if you moved the non-highway spending out of the Highway Trust Fund, it would be completely solvent, with a decent surplus for more highway spending on things like bridge repair.
A week back the BBC posted a chart comparing world gas prices. Might be of interest:
http://www.bbc.com/news/business-21238363
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"
Find another way of funding the HTF that doesn't rely upon bleeding more gas money from people.
People drive less and buy more fuel efficient vehicles because the price of gas is so fucking high. Lower the price and people will drive more because the amount they spend on gas every month won't be the same as their rent.
Basic Economics 101. Not surprising it goes right over their heads.
Damage to roads is usually considered proportional to the fourth power of the axle weight. Cars are generally calculated to average 2 tons, even "big" SUVs aren't usually as heavy as their size might imply. I don't like SUVs either, but that's no excuse for bad policy. According to this GAO report, a fully-loaded tractor-trailer does as much damage to the roads as at least 9,600 cars. Fuel consumption is proportional to weight at low speeds, and at higher speeds wind resistance rises as the square of velocity; it is obvious just looking at the exponents that a simple fuel tax will not tax large vehicles in proportion to the damage that they cause. 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.
Those who advocate genocide deserve every protection afforded by law, and none afforded by common human decency.
As opposed to....what.. not fixing roads?
You miss the point. If 100% of our gas tax went to roads and bridges we'd be golden. Instead it goes into the general fund, where it gets pissed away on politician's whims. Raising the gas tax in California does nothing for roads and bridges.
Semis burn 5x more fuel yet cause 80x more damage.
Cost should be passed on to those that cause it.
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.
To enter (or leave) New York by car, one has many options â" 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...
I'm guessing you don't know much about privately owned roads/bridges/tunnels, because they're de facto natural monopolies.
Not only because of the very high initial costs, but also because the private companies enter into contracts with the State that exclude the construction of alternatives. Without that exclusivity, no private company would ever recoup its initial and ongoing costs. And even if there were alternatives, the discussion has only moved from the ills of a monopoly to the almost exact same ills that exist in an oligopoly.
Honestly, it sounds like your problem is with the Constitution, which gives government the power to collect taxes and establish (post) roads.
This really isn't the best windmill to be tilting at.
[Fuck Beta]
o0t!
This does not square with the facts. Total highway spending was under $43 billion in 2012. Total gas tax was around $30 billion.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
Our current culture in the US, where unsustainable transportation (driving personal automobiles) is prioritized over sustainable transit, needs to change, and the sooner the better.
The hope would be that people would start building sustainable transit BEFORE the roadways reached their breaking point, but cities like Atlanta, LA, and Houston have proved that humans really are not that smart.
At some point, you have to stop building endless low density suburbs and start infilling with high density transit corridors. The sooner this is done, the less severe the transportation and pollution problems will be in American cities.
Also, in cities like San Francisco or New York, you can bicycle over 50 miles to work, because the metropolitan area has put in options like trains, subways, and ferries which extend the range of the bicycle.
Doesn't matter much, it's the same people that drive their cars that also buy supplies that require trucking.
So what? You're artificially buoying up industries that perhaps shouldn't be. Nearly all of our shipping is done over the road, due to cost and convenience. Make roadway shipping pay to repair its fair share of damage done to the roadway. Initially, shipping costs will rise. Costs for all products would rise across the board as those increased operating costs trickle down to consumers. Over time, those companies will find new ways to reduce costs. Money would be pumped into the rail system, expanding and modernizing it to improve speed and throughput. Manufacturing would become more regionally diverse so less has to be shipped across the country. Fewer vehicles on the road means lower traffic congestion. Less roadway maintenance further means lower traffic congestion. Locomotives are more efficient per unit of shipped material are more easily managed in terms of emissions. Fixed, limited access railways can be more easily converted to electric.
The trucking industry would suffer, unquestionably, but it's a much more complicated issue than you give it credit for, and perhaps the advantages in other areas outweigh those effects.
It also has the desirable effect of pushing people towards more efficient cars. If you want to buy a high pollution car that's your choice, within reason, but you can't expect the rest of us to subsidise the cost of your lifestyle choice.
Maybe you haven't noticed but the cool engine in the new Rustang is a 4-pot with a turbo and direct injection. The cheap engine is a V6 and it's slower than the little ecoboost and the big engine is far and away more expensive. And this is the trend in autos in general, the 12s are becoming 8s, the 8s 6s, the 6s 4s, and the 4s are just shrinking and getting more technology. All the engines will have direct injection soon and most of them will have turbochargers. And why? Fuel prices went down! But we finally have some reasonable federal efficiency standards. Too bad about our goofy emissions standards which unfairly penalize diesels, but gasoline direct injection provides most of the benefits anyway.
Of course, we would have likely had GDIs everywhere a decade ago if the federal government hadn't shit on California's own efficiency mandate plans, but eh, we're here now. And it's for the whole country. I only wish California would get over this equipment restriction nonsense, and just go by tailpipe numbers. I can live with the OBD-II connection requirement (though I'm not happy) but it seems to me like the tailpipe sniffer ought to be adequate. I always wanted to swap a CA18DET into my 1989 S13 fastback ala the JDM 180SX, but there's no legal way to do that in California so I didn't. That would have been a more efficient engine than what came with the car.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"