Friday, February 22, 2013

The Case for a Higher Gasoline Tax -

It absolutely galled me that in the wake of 9/11 we had an incredible opportunity to make major structural changes to wean America off fossil fuel dependence but, due to a deeply flawed President and his black-hearted puppeteer Dick Cheney, we got wars of choice and tax cuts instead.  

Of course higher gas taxes help change behavior.  But even better if we dedicate the funds raised to improving transit accessibility, transit efficiency and walkability of communities.  One policy change could do so much for this country.  I'll never forgive Bush 43 for failing us all. But look, if Ronald Reagan could do it, and Bush 41 could do it, we should be able to shame the modern GOP into doing it.  With no further elections on his horizon, Obama should be making the case for an increase in gas taxes

"Raising the tax has generally succeeded only when it was sold as a way to lower the deficit or improve infrastructure or both. A 1-cent federal gasoline tax was created in 1932, during the Depression. In 1983, President Ronald Reagan raised the tax to 9 cents from 4 cents, calling it a "user fee" to finance transportation improvements. The tax rose again, to 14.1 cents in 1990, and to 18.4 cents in 1993, as part of deficit-reduction deals under President George Bush and President Bill Clinton.
A higher gas tax would help fix crumbling highways while also generating money that could help offset the impact on low- and middle-income families. Increasing the tax, as part of a bipartisan budget deal, with a clear explanation to the public of its role in lowering oil imports and improving our air and highways, could be among the most important energy decisions we make."


MrAllison said...

Raising taxes on gasoline..? Thats great!! I own a gas station and I'm already paying the highest taxes any business has..Give me a break your idea is too simplistic...try taxing someone else..maybe the internet

Gary Reilly said...

Gasoline taxes are paid by the customer. The gas station owner collects the tax on behalf of the government(s).

I'll grant you, as a gas station owner this plan might not be in your immediate personal economic interests. Part of the idea is to reduce demand for gasoline, which would reduce your volume.

I'm not sure what impact it would have on margins however. At least in the medium term (and I'm talking the next decade or three) though gas stations will still be inbusiness, and to stay in business will have to price product to remain profitable on lower volume.

On the other hand, reduced aggregate demand also translates to lower input costs . . . and our ability to reduce reliance on oil from unstable areas (i.e. the Persian Gulf) should lead to greater price stability over time.

Lastly, since you as an owner already collect and pass on the tax to the government, the incremental administartive cost of the tax increase is effectively zero.

It's not simplistic. It's simple.