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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.
"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.
...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.
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.
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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.
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.
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o0t!
This does not square with the facts. Total highway spending was under $43 billion in 2012. Total gas tax was around $30 billion.
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