14 December 2008

It's Time to Raise the Gas Tax

Time makes an argument for raising the gasoline tax:
As unemployment heads toward double digits, we can use this found money to encourage people to create jobs (by lowering the FICA tax), or we can use it to encourage people to use more gasoline. It's a pretty easy choice, don't you think?


valereee said...

I'm in favor of a higher gas tax, although I feel for people who are trapped driving a gas guzzler and live far from everything. It's difficult when your choices aren't easily changed. If you've bought a house (which you now can't sell because you owe more on it than it's worth) that's not on a bus line, you have no realistic choice beyond continuing to drive.

DP said...

Not sure I agree. I'm a big fan of creating a nexus between the tax and the societal good it provides.
- If the point of the gas tax is to account for the 'costs' of obtaining oil - fine. If the point is to pay for roadway maintenance/expansion, I don't like it. While encouraging people to drive more fuel efficient cars is good, the type of car you drive has very little to do with your impact on the network. Assessing the tax on miles traveled or peak period usage would be more appropriate.
- Using a gas tax to pay for Social Security makes little sense. What's the connection? I'd love to see FICA reduced as much as anyone, but what happens when we start driving less and Social Security goes completely bankrupt?

CityKin said...

^ I understand your reticence, however, the current tax is not sufficient to cover the costs of roads and auto infrastructure, and much less does it cover the costs of paying the navy to accompany our oil tankers through the Red Sea or other costly military support of our oil supply.

Anonymous said...

The gas tax is really a blunt instrument for public policy.

Better to pay for moblity by the mile driven and by the time of time when the travel occurs.

DP said...

I have a theory:

Some people are discussing raising the gas tax as a way to encourage people to drive less (besides raising $). As I previously indicated (and John re-phrased more eloquently - "blunt instrument for public policy"), if you want people to drive less, taxing gasoline is a poor substitute for VMT or congestion-based charges.

My theory: It is more palatable to modify an existing tax mechanism than it is to introduce a new mechanism. You could propose to tax someone the same amount but if you phrase it as a 10% increase in the gas tax, they'll grumble about it a little and move on; but if you tell them that you're going to charge them 1/10 of a cent for every mile they drive, you better run fast.

Thoughts? Am I imagining this?

CityKin said...

from the: charlotteobserver.com

With gas-tax revenues plummeting, the state of North Carolina is looking seriously at taxing motorists for how far they drive.
If the “road-use tax” is implemented, it would at first be simple – with the state checking your odometer annually and taxing you based on how many miles you have driven. But transportation experts say new GPS technology could allow the state to charge people different rates based on when and where they drive, in an attempt to manage congestion.
Talk of a Vehicle Miles Traveled tax has long been discussed as a necessity in a decade or so, because cars are becoming more fuel efficient, and states and the federal government are losing gas-tax revenue.
But there is now a sense of urgency about the new VMT tax. When gas hit $4 a gallon this summer, Americans sharply curtailed their driving. And when the economy cratered this fall, the driving rollback continued, even when gas prices plummeted.
The 21st Century Transportation Committee suggested that, in addition to the gas tax, motorists pay a quarter-cent for each mile they drive, with the first 2,000 miles annually free. A motorist who drives 12,000 miles a year would pay $25 – possibly due when the driver gets the car inspected.
It's unlikely the General Assembly will add a new tax in 2009, during a recession.
But the N.C. Department of Transportation will need help soon. Revenue from the motor fuel tax of 29.9 cents per gallon is down 12 percent this year, and the state expects a three-year loss of $580 million.
The U.S. Department of Transportation reported that Americans drove 100 billion fewer miles between November 2007 and October 2008 – the largest continuous decline in history.
“The status quo isn't an option,” said Mark Finlayson, who co-chairs the transportation advocacy group N.C. Go!. “Cars are now using less fuel, but they are still putting wear and tear on the roads.”
Beyond North Carolina
North Carolina isn't the only state interested in a VMT tax. Oregon has studied it, and a number of other states and the federal government are considering road-use taxes.
“When we have plug-in hybrids, they won't be stopping at the gas pump,” said Steve Polzin of the University of South Florida's Center for Urban Transportation Research. “Everyone is looking to capture that market. If we don't, we'll see some pretty serious effects.”
The University of Iowa is conducting a study in six metro areas – including Raleigh-Durham – in which computers are placed in people's cars, and the amount of miles people drive is then uploaded to a central database.
Motorists would be billed, and the money then distributed to the states where the travel took place. So if you drive 180 miles across North Carolina on Interstate 95 but didn't buy gas in the state, the DOT here would still get money.
If states wanted to encourage people to continue driving fuel-efficient vehicles, the per-mile charge could vary depending on what you drive. A hybrid might be charged one-fifth-cent per mile, while an SUV might be charged a half-cent.
David Farren of the Southern Environmental Law Center said he supports a VMT tax. He said the tax would encourage people to live closer together, lessening the impact automobiles have on the environment. The government should not only encourage people to use less gas, but also to drive less, he said.
“The gas tax is good from an environmental perspective, because it directly taxes you based on how much you are polluting,” Farren said. “But there are other policy considerations based on water quality, and loss of open space.”
He was critical of the transportation committee's study, saying it focused on finding new ways to get money instead of considering other ways to move people.
“They want to continue a 1950s method of transportation,” Farren said. “They just throw money at old solutions, like beltways.”