CARS HOMES JOBS

After 20 years, it's about time to raise the federal gas tax

Monday, November 26, 2012
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The federal gas tax has been level, at 18.4 cents per gallon, since 1993, and lawmakers trying to reach agreement on a deficit reduction package by the end of the year are reportedly talking about raising it. While such a hike is long overdue, for political reasons it would be surprising if an increase of any substance got approved. Too bad.

Aside from raising badly needed revenue, a significant gas tax hike would steer motorists’ driving habits in the right direction. Every time there’s a spike in gas prices, they react — buying smaller, more efficient cars and fewer gas-guzzling pickup trucks and SUVs. Then, as soon as gas prices start to slide, they revert to their old habits. (For example, this September, SUV and pickup sales rose 13 percent from a year ago.)

Americans have been driving less since the recession started a few years ago, and the Obama administration has imposed tough new fuel economy standards, rising to 54.5 miles per gallon by 2025. The so-called CAFE standards will eventually resolve the issue for us, but they don’t even start being phased in until 2017. So there would be plenty to be gained by reducing fuel consumption now, and a higher gas tax would surely help.

Among the benefits of reduced fuel consumption: cleaner air and water (leading to fewer health problems and lower associated costs); reduced environmental damage from oil exploration; less traffic congestion; reduced dependence on foreign oil (we’re doing better in this area, but imports still account for roughly 42 percent of total consumption). Using less also helps keep a lid on prices, which move higher as demand increases without an accompanying increase in supply.

Higher gas taxes would also generate money for highway and transit projects, which, among other things, provide jobs. The government spends $52 billion on such projects per year, while the gas tax generates just $37 billion a year; so without an increase in the tax, the shortfall is adding to the deficit.

Perhaps that’s why the Simpson-Bowles deficit commission recommended a gas tax hike in 2010. But revenue enhancement is only one good reason to go this route.

 
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comments

November 26, 2012
7:56 a.m.
ronzo says...

If the cost of petroleum based fuel was consistent and predictable, maybe vehicle buying habits would not sway dramatically every time there is a fluctuation in price. For example - if the target price for gasoline was set at $5.00 per gallon, the tax would be adjusted based on the supply cost to keep the price consistent at $5.00. In other words, if the supply cost increased, the tax rate would be lowered and vice versa. Americans could make more informed vehicle buying decisions because we would always know what would be the cost of fuel. If diesel fuel was taxed at a rate that made its cost per gallon less than gasoline, the trucking industry would be accommodated, since there is not much difference in the fuel economy of large trucks and their choices are much less than deciding on the purchase of a SUV vs. a sedan. Whatever is the right price point should be determined by politicians and industry that are serious about this subject, not by those who pretend that the problem doesn't exist. Why do we, as the world's fuel hogs pay so much less than other countries for vehicle fuel? We do not "own" this planet.

November 26, 2012
8:19 a.m.
tonijean613 says...

Too bad Americans aren't more educated to understand the real cost of using gas (war oil profit) and extreme storms (Katrina/Sandy/Japan Tsunami et etc) and those that are educated and upper middle class are simply too selfish to do the right thing and buy the most fuel efficient car they can afford to help stop climate change from getting worse- don't all those suburban soccer moms with their SUV's even care about their children's future?? The upper middle class and the rich are the only ones who can afford the all electric cars (Tesla) and the hybrids (Prius).

November 26, 2012
12:12 p.m.
wmarincic says...

Tonnijean what do you drive and why is it any of your business or anyone elves what drive. If I want an 7 mile to the gallon 3/4 ton truck and am willing to pay to fuel it why should you care? All you have to do is look at Europe who tried doing the crap you spew and look where they are. Twelve dollar a gallon gas and a failing economy where you can go to prison for saying you don't like someone, that is the real liberal philosophy you are to blind to see. I'm visiting my daughter at Ft. Lewis because she is a warmonger in the military. We are in Washington state, very liberal with homeless people everywhere harassing you and cameras on every corner and every highway making sure you don't go more than 5 miles over the speed limit even accidentally or you will get your fine of $80 up to $500. That is your free and liberal society.

November 29, 2012
8:36 a.m.
gina99 says...

NY State already has the highest State gas tax. And some ivory tower editor wants to add to the burden on poor and middle class families nationwide? NYS gas taxes should be lowered to get in line with neighboring States. But that might mean cutting spending a big no-no here.

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