This is gonna get ugly. The federal tax on gasoline is set to expire on Sept. 30. That’s right, in about 30 days, we’ll get to see another food fight in our dysfunctional Congress.
This time it’s different. While the debt ceiling is a kind of abstract, doesn’t-effect-me-so-why-should-I-really-care thing, the gas tax is different. Most of us drive and buy gas – who wouldn’t want to say no to a bit of a discount on the next fill up? Tea partyers will jump all over this. I can imagine what will come out of the mouth of Michele Bachmann. Will Mitt Romney say anything? Will there there be any adults in the room? The Democrats? Obama?
A little history. The gas tax, currently pegged at 18.4¢ per gallon has not been raised since 1993. The geniuses that implemented this omitted an inflationary escalator, so the buying power has been greatly reduced over time. Of course, what’s really, really dumb was having a expiration date.
I like a higher consumption tax on gasoline. It’s more efficient than CAFE standards, for example, as way to motivate drivers and the auto industry toward more efficient vehicles, reducing our dependence on fossil fuels and cutting CO2 emissions. Phase it in slowly, over a number of years so everyone is prepared. If everyone knew for sure that gas will be $5 or $6 per gallon in 2015, we’d have plenty of time to prepare. The car manufacturers would trip over themselves coming up with lightweight, efficient cars. Make it revenue neutral. Tie in the increase with a reduction in the payroll tax or create rebate for the purchase of a new vehicle.
That said, this sort of tax has problems over the long run. With drivers buying more efficient vehicles, over time the revenue generated by a gas tax will be diminished. This means less money to maintain our roads and bridges, much of it in disrepair. More innovative means of raising money will need to be looked into, perhaps a user fee tied into actual miles driven.
What do you think? Please comment.
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