The Department of Transportation’s budget has been released [PDF here], and it includes (among other things):
a six-year, $556 billion surface reauthorization plan to modernize the country’s surface transportation infrastructure, create jobs, and pave the way for long-term economic growth. The President will work with the Congress to ensure that the plan will not increase the deficit.
But, the WaPo’s Ezra Klein points out
Traditionally, the underlying law — the Surface Transportation Assistance Act — was funded by increasing the gas tax. And when I say “traditionally,” I mean beginning with Ronald Reagan in 1982… if the administration is going to duck the fight on reconnecting the Surface Transportation Act and the gas tax, it’s hard to see this proposal getting funded and passed. The House GOP isn’t lockstep against infrastructure investment, but they do seem to be lockstep against new revenues. Plus: The gas tax was a sensible and smart way to fund improvements in transportation infrastructure. That’s why even Reagan signed onto it. It’s disappointing to see Bush’s irresponsible and ideological rejection of it become bipartisan policy.
Hear, hear. One of the reasons raising the gas tax is “sensible”: it makes the market more likely to play ball with President Obama’s goal to get a million plug-in electric cars on the road by 2015. Another: it makes CAFE wrangling far less fraught with drama. In fact, the only downside to raising the gas tax is that it’s unpopular. Oh well…
I have no problem with a reasonable gas tax, say 15 cents per gallon that was earmarked for road repair. Trouble is that I don’t trust the government to have the discipline to not raid the account for other purposes.
15 cents is nothing… Why not $1, or $2 or even $3? Think of all the jobs that they can then create. ;)
The gas tax is currently about 18 cents.
With the amount of gas sold, an extra penny adds a lot of revenue that could go a long way toward maintaining existing infrastructure, or building effective alternatives.
If only the gas tax is used for transportation purposes. And that’s the problem. If it’s just another slush fund, no, I see no reason to raise it.
SVX pearlie, that was the lie that came with the existing 18 cents in tax. The monsters in the federal government stole most of that for their pet projects and corruption just like they’ll steal the next 18 cents. In San Diego gas is more expensive than most parts of the country, our weather is the mildest, and our roads are garbage. Don’t confuse maintaining the roads with transportation spending. The current regime sees everything in terms of moving money where they want it, and they don’t want you driving to work.
The current gas tax is already 18¢. And 37% of this “Highway Trust Fund” is already _not_ spent on highways but on unrelated mass transport and other projects designed to benefit unions.
«I have no problem with a reasonable gas tax, say 15 cents per gallon that was earmarked for road repair» Those who do not learn from past history are doomed to repeat it.
A gas tax is a tax on everyone. Even if you don’t drive, a tax on gas is raising food prices. And what’s the point of EV?
They are stupid because they require more energy to build, maintain and deliver energy too than just using a regular 4 cylinder car.
They are stupid because they require more energy to build, maintain and deliver energy too than just using a regular 4 cylinder car.
You’re not bringing up this idiotic urban legend again – are you?
jmo,
Whether or not powering electric cars requires more energy is arguable, but there really isn’t any question that their manufacture requires more energy. Why do you think they’re so expensive? It isn’t about economies of scale. There have been batteries in every household in the developed world for all of our lives. You’re the one trying to create a myth.
<i>but there really isn’t any question that their manufacture requires more energy. </i>
So, it take more energy to build a 40k Leaf than a 40k 3-series?
Compare apples with apples. It takes more energy to produce a Leaf than a Sentra. It takes more energy to produce a Volt than a Cruze.
“I have no problem with a reasonable gas tax, say 15 cents per gallon that was earmarked for road repair. Trouble is that I don’t trust the government to have the discipline to not raid the account for other purposes.”
You are aware, are you not, that already state and Federal taxes add up to between $.35 and $52 on every gallon? How much is enough?
The whole PURPOSE of the Federal tax on gasoline was…ready for this?…TO MAINTAIN THE ROADS? What happened to this money? It was supposed to go to the Federal Highway Trust Fund – where of course lawmakers raided it and squandered it. Now we’re supposed to throw MORE money to these thieves and wastrels, to squander more of?
A gas tax…is a regressive tax. It hurts the cleaning person, more than it does the engineers and the executives. It hurts people living closer to the edge. And it hurts them in the worst way possible – it takes away their mobility; their freedom of movement.
This, IMHO, is being done for one reason: The current government hates personal transport; it hates the mobility it allows; it hates the freedom it represents. These people, who jet-set all across the country on whims, on our dime, want US to live in Little Worker-Bee housing, Soviet style, and walk to our government jobs.
I’m not having any of it.
Think those electric/battery car buyers are going to make up for lack of gasoline sales voluntarily? They just received a nice tax credit with their purchase. Guys who gets the tab? SUV and pickup drivers.
First CAFE forces the manufacturers to make efficient cars, then taxes the end user to make up for it? I thought there was no tax increase on the middle class?
Not really. For years business owners were able to buy guzzlers and depreciate them over one year. Guess who picked up the tab for that one? I’d be ok if that credit was used to buy say, a bucket truck. Instead most were extra heavy vehicles driven for personal use by the owner’s wife. Best solution to all of this is no subsidies for any vehicle.
I think that the one year depreciation schedule is something new this year and expires after this year. Before depreciation was something like 3 or 5 years. But you’re right any subsidies are usually a bad idea. And the gas tax monies are pretty much a part of the general fund and are used for any and everything.
golden2husky,
You couldn’t be more right. When I was earning my political science degree 20 years ago, the rule of unintended consequences was no mystery. Somehow, we still have big government believers willing to enable the villains in Washington, and Sacramento. People who honestly think that subsidies for H2s justify subsidies for Volts need to stop voting and reproducing.
And how are the owners of these BEV vehicles going to contribute to the maintenance of the roads that they are using? There is no road tax on electricity, and if our oh so wise government gets their wish and puts more and more of them on the street to replace the current ICE vehicles, there will be less and less revenue to maintain those streets. Should they get a free ride, on top of the tax credits and subsidies they are already getting?
As much as I should despise a gas tax on principle, I don’t. If nothing else, the seesawing in consumer preferences due to gas prices wreaks havoc on the industry. A tax could certainly stabalize that and push buyers towards smaller cars (instead of using CAFE browbeating automakers into building cars customers don’t want).
On the other hand, you can bank on the revenue from the gas tax being mismanaged by an ever-larger federal government. I’d gladly pay an extra buck a gallon if the money went straight to paying down the debt. But that makes entirely too much sense.
We’re paying an extra buck a gallon today because we elected someone who hates the freedom that cheap energy provides. You’ve allowed yourself to be manipulated into carrying your adversary’s burden.
@ CJinSD
the freedom that cheap energy provides
They didn’t teach you about externalities in “political science” then eh?
Everything has a price, but nothing has a cost to the laissez-faire utopian capitalist.
PeteMoran: They didn’t teach you about externalities in “political science” then eh?
And they didn’t teach you about the benefits that cheap energy provides, apparently? We live much better today than people did in the early 20th century, when energy was much more expensive relative to income.
And the environment is cleaner, too. The poorest American today lives in a healthier, cleaner environment than the richest Americans did in 1911.
Why do you care about pushing consumers towards anything? Shouldn’t people be able to exercise their free will without the whole process being subverted by government agencies and price controls? I love my big American car. It’s the best thing on four wheels, has given me no problems and swallows lots of people and luggage. It’s also a piece of the American dream that I believe in. A dream that says that you don’t have to be a rich man to own a big car, as you do in Europe. Everyman can and will have a V8. It’s also owned by me 100%. I pay for it already by having to buy more gas, paying more gas taxes in the process. You are welcome to love your small car, but don’t begrudge me.
I’m all for paying down the debt, but I wouldn’t give those wastrels one more cent to do it. Why is it, that with the economy in a slump and everyone having to tighten their belt, the government can increase spending, increase people on the public payroll, increase their salaries and borrow the difference? If I did that, I would have to file for bankruptcy.
@ geeber
Cheap? Like I said, the Randians tend to know the price of everything but the cost of nothing.
Relative to income, energy is cheap. And this is after we extract it in a more enviromentally friendly way than was done in the early 20th century, and have imposed far more controls to minimize the byproducts of its use.
I would think that your side would celebrate these facts – we regulate the extraction, production and use far more heavily than we did in earlier times, and energy is still very inexpensive relative to income. And we enjoy longer, healthier, more fulfilling lives than our counterparts did in 1911 or 1811 or 1711, when we didn’t heavily rely on those supposedly dirty fossil fuels. Inexpensive energy played a very large part in fueling (pardon the pun) that progress. Only someone completely ignorant of history would argue otherwise.
@ geeber
Energy costs are rising faster than inflation, while wages are stagnant. It’s been the case since the 1970s. The whole economy is structured around cheap transport (the market decided that was “best” – ie wasting energy) and in the next decades it’s going to bite HARD. All the while sending ~$250b NET overseas in hard cash for oil purchases. The costs of that folly are just starting to arrive.
As to questions of history; movement from the workhouse, (slowly) recognising the costs of an unclean environment, the shortening of the working week and tremendous jumps in education access and healthcare have more to do with your lifestyle claims.
Relative to income, energy is cheap. And this is after we extract it in a more enviromentally friendly way than was done in the early 20th century, and have imposed far more controls to minimize the byproducts of its use.
There are also issues of energy security that haven’t come close to being internalized, and the environmental costs aren’t really accounted for, either.
If you have to pay tens or hundred of billions of dollars for defence, security and such and you’re not raising taxes on oil to compensate (and let’s be honest: a lot of that spending has to do with security or you’d be single-sourcing from Canada) you’re not internalizing cost and you’re certainly socializing the costs of the energy industry.
I’m not saying it’s good or bad—there’s definite reasons you’d want to do this without it directly affecting the price of energy—but I am saying that it’s happening and that it’s mildly hypocritical to oppose the socialization of cost of public transit or suchlike while ignoring the same happening on the supply side.
PeteMoran: Energy costs are rising faster than inflation, while wages are stagnant. It’s been the case since the 1970s.
No, it hasn’t been the case since the 1970s. This is inaccurate. (And I seem to recall environmentalists saying that energy costs were too CHEAP about 5-10 years ago. Can’t have it both ways here. Your original posts seem to bemoan the availability of cheap energy, and now you appear to be saying that energy becoming more expensive is a bad thing.)
Note, for example, that gasoline, up until the most recent price rise, was CHEAPER relative to income than it was in 1962. Same with heating oil. And note that both cars and home furnaces are more efficient today than they were then, so the savings are even greater in recent times.
PeteMoran: The whole economy is structured around cheap transport (the market decided that was “best” – ie wasting energy) and in the next decades it’s going to bite HARD. All the while sending ~$250b NET overseas in hard cash for oil purchases. The costs of that folly are just starting to arrive.
ALL successful economies are structured around cheap transport – or the widespread use of cheapest transport method possible. This trend didn’t start with 1950s America and the use of widespread use of petroleum.
In the 1700s, it was ships (which was why, in this country, there were initially no major inland cities); in the 1800s we first built inland canals and improved roads and then railroads. All of these methods made transport less expensive, and freed us from having to stick near the coasts. The use of petroleum in the 20th century only continued this trend. And please note that inland canals, railroads and early roads were all subsidized by government.
And please note that energy is not wasted if it is used to improve productivity and increase living standards, which is what it did throughout the 20th century.
PeteMoran: As to questions of history; movement from the workhouse, (slowly) recognising the costs of an unclean environment, the shortening of the working week and tremendous jumps in education access and healthcare have more to do with your lifestyle claims.
All of which were made possible by the efficiency improvements brought about by less expensive, more efficient energy. You are attempting to put the cart before the horse.
Shorter work weeks and improved education access and better living conditions don’t just fall out of the sky. Someone has to pay for them, and they are made possible by increased wealth. That increased wealth has to be generated somehow, and less expensive energy is a key part of that equation.
And concern over the environment is directly correlated to increase wealth. A study by those awful libertarians has proven that when per capita income crosses a certain threshold (the exact number escapes me), the citizens of said country become more concerned about the environment. This is a fact.
Here in the United States, it’s no accident that the environmental movement gained widespread traction during the lush 1960s. In the threadbare 1930s, when the country was reeling from the Great Depression, Pittsburgh residents saw smoke pouring out of steel mill smokestacks as a sign of prosperity (i.e., jobs for workers). By the 1970s, they saw it as a sign of a degraded environment. What had changed? Rising incomes and greater expectations fueled by economic growth.
PeteMoran,
Externalities? Are those things like funding civil wars and genocides in Africa to gain access to battery materials? The important property of BEVs for politicians pushing their adoption isn’t that they do less harm in any sense, it is that they don’t work.
psarhjinian: There are also issues of energy security that haven’t come close to being internalized, and the environmental costs aren’t really accounted for, either.
We have paid – and continue to pay – billions to make the extraction, production and use of this energy as clean as possible. Which is why the environment today is cleaner than it has been at any time since the Industrial Revolution took root in this country after the Civil War. The idea that we aren’t paying the “true environmental costs” of energy use is a myth, especially since the use of petroleum represented a switch to CLEANER sources of fuel compared to the previous sources (wood and coal).
psarhjinian: If you have to pay tens or hundred of billions of dollars for defence, security and such and you’re not raising taxes on oil to compensate (and let’s be honest: a lot of that spending has to do with security or you’d be single-sourcing from Canada) you’re not internalizing cost and you’re certainly socializing the costs of the energy industry.
Considering that most of the oil used in the Middle East goes to Europe and Japan, I’d say that if anyone is not paying the full cost, it is them. Unless they are paying for the U.S. Armed Forces.
psarhjinian: I’m not saying it’s good or bad—there’s definite reasons you’d want to do this without it directly affecting the price of energy—but I am saying that it’s happening and that it’s mildly hypocritical to oppose the socialization of cost of public transit or suchlike while ignoring the same happening on the supply side.
We already do socialize the cost of public transit – users receive more subsidies than drivers do. And please note that public transit uses energy, too, so its users benefit from any subsidies afforded to the energy industry as well.
First: any gas tax should be 100% devoted to infastructure. There are a thousand ways to skim off the fund and still keep to that basic principle, and that’s life, but most of it has gotta go to fix roads and bridges.
Second: People who complain about gas and infastructure taxes need to take a harder look at the math. Of all the taxes that the Gov. can levy, a gas tax is the easiest one to avoid; just buy a more efficient car! Hell, the Gov will even PAY YOU to buy a car that uses less or no gas. You’re effectively being paid to not pay taxes. What fool wouldn’t take advantage of that?!?
Third: look at what you get for the money: Say they go nuts with a gas tax and you pay $0.60/gallon. Say you own a car that gets 30 mpg. Do you realize that you’re then paying $0.02 to use each mile of road every time you drive? That’s an insane deal! And yet somehow our government paves roads, builds bridges, and plows snow for roughly half that. Can I drive my car across your yard anytime I want at a rate of $0.02/mile? I bet not.
Fourth: Ok, here’s some macroeconomic BS, but stay with me: We’re one of the biggest oil users in the world, and the world oil market is wound so tight that price per barrel moves on the ticker when an Arabian Shiek farts. So let’s say the US jacks the price of gas via tax. And that price increase starts moving people to more efficient cars which then reduces demand. The price per barrel of oil might then drop a bit. A drop in oil prices means a drop in the price of gas. The net effect is that the gas tax might go up a bit, but the cost of the actual gas might go down a bit. We probably won’t get it all back, but say the gas tax goes up $0.30, and the price of gas goes down $0.10 based on reduced demand. The consumer only sees a $0.20 price increase at the pump. The rest is essenitally free money that just gets diverted from the oil companies’ coffers to your roads and bridges. It’s a total win-win.
Ok, eat me alive now with retorts!!
+1 for Sundowner – good points
But shouldn’t fuel tax go to pay for our middle eastern wars? I mean, why do we really care if they are stable?
“any gas tax should be 100% devoted to infastructure”
So, I guess you mean just the concrete and asphalt, not the wages of the people building it. No planning, either?
Your other argument is interesting, but look at the situation right now. US gasoline demand is still way way down. 6m b/d. Yet crude prices are still rising. China is the biggest reason. Throw in Iraq coming back online after 15 years and the picture should be down.
Probably the better answer to your point is it not just the tax rise, but how quickly the price rises.
A gas tax is a consumption tax that makes those who use more of it pay more for the roads they more frequently drive on than others or the weight of their poor gas mileage vehicle b/c they cause more wear and tear on the roads.
Add to the fact that by taxing up gas – gradually we will create a shift in the demand for fuel efficient cars by the average buying public without the need for the gas shock. OEMs make cars people demand which are gas guzzlers still to today. We need to address this issue without using the failed supply side economics model of CAFE.
Respectfully,
First: You are correct. That’s how it should work. BUT, if the tax is federal and control of roads and bridges is a state responsibility, anyone living in a region not favoured by the administration of the day will be driving over rickety bridges and bombed out roads for a long time. If you live in Chicago however….
Second: Yep, that’ll work for awhile. Eventually the increase in the cost of living caused by higher fuel prices will result in higher wages, particularly in the public sector-paid for by you. Pretty soon people will be right back driving what they want. Maybe all the ground won’t be made up but enough will. Here in Canada gas taxes are at a level that would cause a revolution in the USA. This was done partially to force us all into small cars and reduce consumption starting about 1980. 10 years later wages had almost caught up and the pickup/SUV boom was on. Today, unless you live in a large urban area, full size 4×4 pickups and SUVs are standard issue.
Third: See Second, above, and add: Our roads are sh*t and getting worse all the time. We can’t afford to fix them because the Federal Government won’t kick loose the funds to the provinces. And yes, you can try to drive your car across my yard. You’ll need a 4×4 truck though, it’s under about 2 feet of snow. A big reason why people in a lot of North America drive Silverados and not Volts/Pruis/Fit/Smartcars etc.
Fourth: I hate to tell you this, but the USA ain’t the only big dog in this market anymore. Every drop you don’t consume will simply be sold to an ever increasing developing economy in China, India and so on. The price of a barrel of oil fluctuates on a lot more than demand in the USA although that is a factor. All those Chinese Buicks need to be fed, and there are more every day.
Long story short I know Canada is not the USA, but we are similair enough that what failed here will eventually fail there in this case. But here’s the worst part. I understand that in the 70s the US federal Government forced all the states to accept the 55 mph speed limit by threatening to withhold funds for Highway maintenance and construction to anyone who did not comply. What if they tried this again with your states share of this new gas tax?
The premise of a gas tax to fund roads is to make those who consume more, pay more. Right now we are so dependent upon world oil prices it significantly affects our market. We will have to pay higher fuel prices as World demand outstrips supply (we are at that now). Yes we can drill to the ends of the Earth but that concept ignores the basic problem that we use too much oil and other forms of energy – much of it going to waste. This also completely ignores the fact that there is a finite supply of fossil fuel in the ground with an unknown of when it will be used up.
Instead of waiting for the world to dictate our gas prices…why not artificially inflate prices in a controlled fashion and fluctuate the gas tax based on oil prices so that they don’t change to dramatically. By keeping gas prices artificially high people won’t be able to afford to waste as much money on gasoline for gas guzzlers and will demand fuel efficient and non-gasoline powered vehicles such as diesel or smart hybrids or apply hybrid technologies to our normal gasoline powered cars. It is tough love but we need to wean ourselves off of waste and over consumption of oil.
I enjoy most of the enlightened comments on this site. Explaining the price elasticity of oil, negative externalities, and the gross market distortions imposed by CAFE standards instead of a simpler gasoline tax are difficult in such a short forum, but here’s my take:
At a minimum, we should increase the current gasoline tax to adjust for both inflation and the average increase in fleet efficiency since it was originally passed. Ideally, we should scrap CAFE altogether and increase gasoline taxes to the point where the true “cost” of gasoline is reflected in the price. High fuel taxes are transparent, and therefore a large and slow-moving political target. Spilling our soldiers’ blood, propping up dictators, and squelching democratic tendencies we would otherwise sympathize with to secure the free flow of “low-cost” energy (oil) our world depends upon are not only immoral, they are inefficient and exact a hight toll on all of us.
Obviously Ronald Reagan was a tax and spend liberal. Also, Nixon taxed the wealthy at 70% and promoted Government Health Care.
You forgot that Teddy Roosevelt was a tree hugging granola eater
Laugh now, but given how far political discourse has moved (shrilly) to the right I wouldn’t be surprised to see these points made in seriousness in the near future
Nixon was a liberal…and his policies (high government spending, high taxes, a wage and price freeze in 1971) left the economy in a mess by 1974. He also introduced the 55 mph speed limit, which was the dumbest and most deservedly ignored law since Prohibition. If liberals want to claim him, by all means they can have him.
Nixon was, however, conservative relative to his opponents in the 1968 and 1972 presidential elections – Hubert Humphrey and George McGovern. McGovern was a very far left liberal, and he even repudiated much of his party’s 1972 platform later in his life (it’s called “facing reality”). So the 1970s could have been even worse.
Without wading into this too deep, as I mostly loathe political ping-pong and its players, I will attempt to transcend the easy stereotypes here:
All three posters are superficially correct. Reagan talked the talk about supply-side but defense expenditures cancelled out any efforts on that front. Nixon was far from the type of conservative that is lampooned today. He was a Quaker, embodying (and sometimes acting contrary to) the nature of that faith, He came of age in the brokerage era, and stated that “we are all Keynesians now”. The Chicago School economic theories of Friedman were only barely rising to prominence during Nixon’s time in office.
In a similar vein, Teddy Roosevelt was not the type of environmentalist that is easily lampooned in our modern discourse. He was a conservationist, which is distinctive from the former. After laying waste to most of the wildlife in the American west with his rifle, Teddy saw up close the need to preserve some of that unspoiled beauty for future generations and empowered the Forest Service under Gifford Pinchot to embark on an ambition expansion of the National Park system.
So I guess in a perverse way Psar-what’s-his-nose is correct. Maybe with the advent of the internet and the 24 hour news cycle we don’t have the time to distill much and everything becomes a ridiculous caricature.
There’s a surprise, user-pays capitalism results in everything being run down when you need it.
The costs of bringing everything broken back up to standard (the whole of the USofA!!) might just be higher than having maintained it, rather than allowing the skim to the rich.
No, diverting money raised by the gas tax to mass transit systems and non-road “demonstration” projects (i.e., bicycle paths, downtown “traffic calming” projects), as is currently being done, results in roads and bridges not receiving enough for maintenance.
How appropriate, there’s a Government Motors Impaler and a Chrysler Bailoutmobile in the background.
“Quick, Geithner! To the Bailoutmobile!”
Not sorry. Couldn’t help myself. :)
Any takers on the pickup at the very back of the pick?
With the federal gas tax going up, and the state gas tax – that’s two slush funds – think getting things delivered is going to get any cheaper? say goodbye to your newspaper-nobody will be able to afford to deliver it – and then the US. Postal system- maybe 5 days of mail will become the new standard – these kind of things will get cut. Think UPS/FedEx is going to deliver that package any sooner – nope – they’ll hold onto it until they are “in the neighborhood”.
Actually, newspaper and local mail delivery are a couple of examples of activities with a pretty low impact of gas prices. A newspaper delivery guy’s incremental gasoline cost for you is as much gas as it takes to drive from one subscriber to the next (on average), so not too much per person. I’d be shocked if tripling gasoline cost more than a penny per subscriber. Mail is even better, since there are a lot more ‘subscribers’ and in the city anyway, they park the truck each block or two and walk the houses. Fed-ex/ups is a little more impacted, but they charge premium rates, they can add a couple of cents to their rates and totally cover any gas hike.
The real serious effect of fuel cost is that it makes cost of all goods go up slightly — all those long haul semi trucks feeding your local WalMart and your local grocery store have to be fueled.
I’m fine with 5 day mail delivery as opposed to feeding the USPS any more of the money we don’t have. Further, I’d like to see junk mail pay more of the freight. Most of what I get is junk mail, credit card offers, free credit card checks with usurious fees and interest rates, offers to buy me out of the timeshare that I’ve never had, reminders from the dealer to bring my car in, fancy catalogs from companies I’ve never bought from and/or even heard of, etc, etc.
Newspapers – what can I say about an industry that mows down trees, burns diesel getting them to a pulp plant that pollutes rivers, getting the newsprint to the news organization, which produces a product with a one day life span and then has it delivered by gas and diesel burning vehicles, all so my dog, if I had one, can poop on it. I canceled my local paper subscription for several reasons – the news wasn’t news anymore by the time they got around to delivering a selective version of it, their reporters were both stupid and biased (you can’t get away with both), their editorialists fawned over, and still fawn over, the crooked confederacy of dunces that run my state and so forth. The biggest consequence is that I now no longer have a huge stack of paper to recycle every few weeks. That ‘recycled’ paper, BTW, just goes to a special part of the local landfill, nobody actually reuses it. Sucks to be them, always a day late. The industry is like the guild of manuscript illuminators a short while after Gutenberg popularized the movable type printing press.
Regardless, a tax is a tax. Eventually, as small or large of a percentage on a gallon of gas is, it trickles down and effects us all, sooner or later. That 18 cents federal tax and various state tax (here in Tennessee: 21.4 cents per gallon) adds up to a nice chunk of the overall cost. Furthermore, businesses rely on large portions of diesel fuel to ship their goods, this in part trickles down to the very goods we buy. In the end we all feel the effects of over-taxed commodities.
Tennessee apparently (folklore or not) spends more in a given fiscal year on roads than on education, but we have more potholes than you can shake a tire iron at. This notion of gasoline tax being used only toward infrastructure is laughable at best. At the end of the day taxes, no matter where they come from, go toward federal or state departments, alongside pork-barrel projects written in by legislators.
The gas tax is like any other sin tax to the anti-car coalition. They insist it is to raise revenues for infrastructure, yet at the same time, hope that it also decreases miles driven and punishes the SUV and sports car owners.
However, improving and expanding the infrastructure encourages more driving according to the public transit boosters.
So there’s contradictory and irrational motives from the gas tax fans.
You see this with cigarette taxes. Purportedly to discourage smoking despite claiming those taxes are ear marked for schools. Thus if smoking declines, the children suffer.
Then there’s “making pot legal and tax the heck out of it”. If so, people would go right back to black market pot which would not have any taxes.
It would be interesting to see what percentage of the gas tax is spent on road improvement/expansion, etc. If it’s not damn near 100%, it’s hard to argue in favor of an increase. I’m guessing it’s well below 70%, but I may be wrong.
At the federal level about a third goes to non road projects.
Much of what’s left is allocated as partisan pork to the districts with Congressional seniority at the time. A $20 billion hole in the ground in Massachusetts doesn’t do a lot of good to drivers in the rest of the country.
Self-righteous exercise freaks who pay no use taxes on their bicycles have raided our gas tax coffers for bike trails(actually they are called hike-bike trails but just try to walk on one during peak hours of the wannabe Tour de France).
These people are well-organized and well-funded.
Bike trails? Really? they are bankrupting us? Come on. Stop watching fox news.
Mostly transit. In some cases that works well — transit use keeps people from using the roads. In other cases transit is just busing poor people around and folks don’t like that.
In a perfect world, we would raise the gas tax, put the money into the general fund, and spend more on both roads and transit.
Congressional appropriation is a problem, but about 1/2 of the TTF money (gas tax) is allocated to states by formula. So it is more of a state level appropriation which causes allocation issues.
When roads and bridges are crumbling, we don’t have money for bicycle paths and mass transit systems. It’s a fact that a large portion of federal motor fuels tax revenues are diverted to “demonstration” projects (non-road, which includes bicycle paths and mass transit systems).
If our roads and bridges are in this bad of shape – and I’m not the only one saying that they are; plenty of people on both sides of the partisan divide are saying this – then we need to find other sources of funds for those projects. We need to direct every available dollar raised by the federal motor fuels tax to repair and update roads and bridges.
Here in the Harrisburg area, for example, we used federal transportation money to revamp a the main street in a suburban town to “calm” traffic and spruce up the streetscape. A nice project – it does look better – but if our bridges and roads really are in dire shape, this type of expenditure is simply NOT a priority.
And the number of people lured to use mass transit systems by increased federal expenditures are not sufficient to reduce the wear and tear on roads. It just isn’t working that way.
Geeber, what if subsidizing a mass transit project is more cost effective than building a road. Are you for more roads or for the best use of money.
The House GOP isn’t lockstep against infrastructure investment, but they do seem to be lockstep against new revenues.
Give me a break! Exactly how can this moron write a statement like this without actually backing it up with at least one example of ANY political party being against new revenues?
No one is opposed to new revenues – even the stoutest conservatives.
Klein is a buffoon. He has been repeatedly called out on stuff like this on a regular basis.
Okay, no one is “opposed to new revenues”, but most conservatives only want new revenues if it doesn’t involve more taxes…which is kinda the same thing, no? What other source of revenue does the US government have? And some conservatives still believe that you can increase revenues by *cutting* taxes. Reganomics 101.
And actually, I suspect that some conservatives are very happy with the deficit. More deficit = more spending cuts = smaller government = free market capitalist nirvana. Starve the government, free the people, no?
And actually, I suspect that some conservatives are very happy with the deficit. More deficit = more spending cuts = smaller government = free market capitalist nirvana. Starve the government, free the people, no?
If conservatives actually shrank government I’d believe that, just like I’d believe gun-advocacy groups stance that keeping their guns keeps us free from tyranny. But conservatives don’t actually do that—they only cut stuff they find ideologically unpalatable or politically safe, just like pro-gun people en masse keep quiet when their guys were in office and curtailing civil liberties, largely because, as long as they get to keep their toys, they’ll sell out readily.
And before anyone pulls out the “but they’re not real conservatives” I’d point out that’s the exact same (very poor) argument that clove-cigarette-smoking, beret-wearing communists make when someone rightfully takes a poke at the former Soviet Union.
What matters is what you do when you have the opportunity, not the poster on your wall.
psarhjinian: But conservatives don’t actually do that—they only cut stuff they find ideologically unpalatable or politically safe, just like pro-gun people en masse keep quiet when their guys were in office and curtailing civil liberties, largely because, as long as they get to keep their toys, they’ll sell out readily.
Would they be like the lefty antiwar activists and “civil libertarians” who were squawking that President Bush was shredding the Constitution with the Patriot Act and other activities, and have suddenly been struck with either amnesia and laryngitis now that President Obama is continuing the same policies or even adding new ones (making it easier to assassinate people in foreign countries, for example)?
Would they be like the lefty antiwar activists and “civil libertarians” who were squawking that President Bush was shredding the Constitution with the Patriot Actand other activities, and have suddenly been struck with either amnesia and laryngitis
Yup. Exactly like them—you’ll note I said that when I took a potshot at recreational communism. Though I would note that leftist intramural criticism of Obama is far more prevalent than rightist criticism of Bush was at this point in their respective presidencies.
Though admittedly self-criticism is more of a leftist political virtue, while the right seems to prefer self-denial in recent times, given the popularity of the term RINO. Guess what: if you have to excuse people you don’t like by calling them ____-in-name-only, then perhaps your ideology isn’t actually sustainable.
Yup. Exactly like them—you’ll note I said that when I took a potshot at recreational communism. Though I would note that leftist intramural criticism of Obama is far more prevalent than rightist criticism of Bush was at this point in their respective presidencies.
And you say this based on regular reading of the National Review and the Weekly Standard, both of which severely criticized the spending policies of the Bush administration, right? There was plenty of criticism of Bush from the right regarding No Child Left Behind (education in the US is locally controlled, not mandated by Washington), the prescription drug bill, and other policy matters. Of course Bush merely overspent while Obama is being profligate. Obama is also taking the cynical political stance of proposing a budget with virtually no restraint on spending, hoping that the GOP controlled legislature will make cuts that the Dems can paint as inflicting pain.
Like the teachers in Wisconsin calling in sick and closing the schools to protest Gov. Walker’s decision to end collective bargaining with the teachers’ union, power and politics is what the left is about. Yes, tell us it’s for the children.
Though admittedly self-criticism is more of a leftist political virtue, while the right seems to prefer self-denial in recent times, given the popularity of the term RINO. Guess what: if you have to excuse people you don’t like by calling them ____-in-name-only, then perhaps your ideology isn’t actually sustainable.
Sustainable ideology? You mean like socialism and communism in Eastern Europe?
It’s interesting that you bring up an example of people on the right being critical of those on their side as supposed evidence of conservative’s lack of self-criticism. I guess when lefties complain that Obama isn’t radically left enough for their agendas that’s considered self-criticism but when conservatives point out Republican squishes, that’s an example of “epistemic closure”.
I guess when you write the rulebook of public discourse you can say whatever you want to say.
It’s also getting rather tiresome to hear lefties keep trumpeting how they are intellectually and morally superior to conservatives and libertarians. Of course you think that the “self-criticism” of the left is a “virtue”, you think being politically left wing by definition bestows moral virtuosity. You think that the profit motive is somehow evil and that you are a better person than I am simply because of our political ideologies.
You may in fact be a better person than I am, I can be a real jerk sometimes, but that has nothing to do with my politics.
To be sure, the left has engaged in things like purges and show trials, but then what appears to be enforcement of a rigid ideological orthodoxy to rational outside observers is always considered “self-criticism” by those doing the enforcing.
I live in Michigan, a test tube experiment showing just how well left-of-center policies work.
psarhjinian: Yup. Exactly like them—you’ll note I said that when I took a potshot at recreational communism. Though I would note that leftist intramural criticism of Obama is far more prevalent than rightist criticism of Bush was at this point in their respective presidencies.
That’s your opinion, not a fact. I recall plenty of criticism from the right during Bush’s term on a variety of subjects – including his level of spending on social programs (which wasn’t stingy, contrary to the left’s claims to the contrary). Of course, when the oppopsing candidate in the 2004 election was someone who promised to spend MORE than Bush did (as did every Democrat who ran during the primaries), one wonders exactly what disgruntled Republicans were supposed to do – stay home and ensure a Democratic victory (which is part of what happened in 2008)?
Plenty of conservatives were also upset with the No Child Left Behind Act, which, as they noted at the time, was heavily based on a bill by that well-known Republican, the late Senator Ted Kennedy.
psarhjinian: Though admittedly self-criticism is more of a leftist political virtue, while the right seems to prefer self-denial in recent times, given the popularity of the term RINO. Guess what: if you have to excuse people you don’t like by calling them ____-in-name-only, then perhaps your ideology isn’t actually sustainable.
Again, please provide proof that self-criticism is a more of a leftist political virtue.
You can’t dismiss the dissent highlighted by the term “RINO” and then turn around and use it as an attempt to discredit conservative views. (Using this standard, I guess the criticisms of Obama from the left prove the bankruptcy of their views as well? Fair is fair, after all.) There IS dissent among the right – that is why this term came into being in the first place.
OK, in contrast to tiredoldmechanic (who I suspect might be an Albertan – the Canadian equivalent of a Texan), I am a Canadian who thinks all of these arguments against a higher federal gas tax are ridiculous. Anyone who has ever driven across the border from Michigan or New York into Ontario will immediately notice how the mix of cars changes – far fewer full size pickups and SUVs, many more CUVs and cars. There has to be a reason for that, and it’s hard to imagine that the much higher fuel prices in Canada aren’t at least part of it. Then, take a trip to Europe where gas is *really* expensive, and look at what people are driving there. To argue that higher fuel taxes will somehow not have the intended effect because of some kind of spooky “trickle up” effect on wages is just willful ignorance.
Gas is cheap in the US. That’s why Americans burn more of it than anyone else (with Canadians admittedly not far behind – gas is too cheap here too!). You can argue either way from that point based on whether you are smart and thoughtful or you are a Fox News watching free market capitalist who thinks that “over regulation” is the biggest problem in the US and that reducing taxes will magically fix everything (?!?!?!?!), but at least start the debate from the point of undeniable and obvious fact! Cheap gas = inefficient cars. Duh.
Duck, what do you drive? Did you choose to buy it or did someone make the choice for you? Remember one thing, you aren’t special, you don’t get to decide what others buy and have. If they are willing to pay for a vehicle and all the other expenses, then they have the right to buy whatever they want.
Besides, there is no one forcing you to pay less for gas, just send a check for however much you think gas taxes ought to be to the government. I personally don’t like high taxes because it’s my money and I hate to see most of it wasted. But if you like them, pay more.
To add to this, government coercion is a bad idea in every case including transportation.
Yellowduck, the reason you’re not seeing as many trucks in Ontario is called disposable income. It’s not all cultural.
Also, as someone who has half of their family living in Alberta, and with in-laws who live and travel extensively through the Lone Star State, I can without any qualms tell you your views on Alberta=Texas are bunk.
I think Ed’s admonishments yesterday apply here: the Albertan=Texan comparision is a slur against tiredoldmechanic (not to mention trite) and lowers the tone of debate.
I’m a Canadian and paying $1.15 a litre = $4.30 to a US gallon. Yellow duck is right,we do adapt. My gas pig of a Jimmy sits in the driveway,and only used if we really need it.
However I have to agree with MikeAR. I will not be forced into driving something I don’t want.
@Mike:
“To add to this, government coercion is a bad idea in every case including transportation.”
Hey, buddy, who owns every road you drive on? Without “government interference”, you wouldn’t have a transportation infrastructure in the first place. I personally think it’s pretty obvious that the Interstate Highway System (started by that “notorious commie” Dwight Eisenhower) added more to the economy than the cost of building it, and I much prefer driving on roads and bridges that aren’t falling apart. And if those things cost money, well, I’ll pay it. TANSTAAFL.
But hey, conservatives are always looking for a free ride. “Keep your government hands off my Medicare– I mean transportation!”
No, I think that most of us are looking for something more simple – namely, federal motor fuels taxes being spent on road and bridge construction and maintenance, instead of a hefty portion being diverted to non-road projects, as they are now. That’s a good start.
Hey, buddy, who owns every road you drive on?
Is this a trick question?
I own every road I drive on.
Clever name Aristurtle, but you are wrong. You are arguing about something I never said. There is a huge difference between government coercing people into smaller vehicles and your rant about government road building programs. You ought to get out more and get to know some different people, you obviously don’t know anyone to your right politically. You should get to know some of us, we aren’t subhumans like you think.
Well, how do you propose to pay for the roads, then? Gasoline is almost exclusively used for roadway transportation; heavier vehicles cause more wear and tear on roads than ligher ones and generally consume more gas to go the same distance, so these things nicely cancel out. Right now the government’s income is way lower than its expenses, and our roads and bridges are incredibly poorly maintained. If not a gas tax, how else are you going to pay for it? It’s gotta come from somewhere.
Well, how do you propose to pay for the roads, then? Gasoline is almost exclusively used for roadway transportation; heavier vehicles cause more wear and tear on roads than ligher ones and generally consume more gas to go the same distance, so these things nicely cancel out.
Road wear and tear is highly nonlinear with weight so we do subsidize heavy trucks, but if there were a tax formula to fully account for that damage, we’d pay indirectly through higher delivery prices.
I propose to pay for roads with a gas tax. By re-diverting the 37% of gas tax money spent on other things, you will have increased the available road infrastructure funding by 59%. I don’t know how the House budget committee can reach into executive functions to force this to happen, but it needs to happen first. Then I’ll be happy to increase the gas tax further to get even better roads more quickly.
Aristurtle, why are trying to argue with me? Did I ever say that all taxes are evil or that governments should be defunded totally. My arguement was simply that too much of the gas tax revenue goes to other non-highway uses. Is that so hard to understand?
We can argue all day about tax rates and spending but that is a simple statement that shouldn’t be a bone of contention for anyone here. If you want to discuss bank bailouts, ethanol subsidies and other wastes of money then I’ll be happy to do that too, but until then quit trying to pick a fight.
Hey, buddy, who owns every road you drive on?
The people of the United States, not the government. The US Constitution does not start out “We, the government”.
Hey there yellowduck,
Nope, not an Albertan. A proud lifetime British Columbian. I suspect you are an easterner, and I wouldn’t expect you to understand. Taxes collected in your part of the country are spent there. Taxes collected in our part of the country are spent in your part of the country too. We don’t get much for our tax dollar out here and never have, so any tax we pay is certain to provide little or no benefit to us. All it does is make life more expensive. But this is the truth about cars, not the truth about Canada.
At issue here is what effect an increase in gas taxes will have on transportation choices in the USA, and my position is that it will temporarily impact choices until wages catch up with the newly increased cost of living. Then people go back to buying what they want. I think the experience here in Canada shows that, although perhaps not where you live. All I know is that one hell of a lot of people in Canada bought F-150s, Rams and Silverados last year and they are not all in Alberta. Or Texas.
Sorry, Mr. Niedermeyer. I don’t think that helping Obama’s goal of dictating the cars on the road, or making it easier for a big brother institution that does the same thing is worth an increase in gas taxes. I live in New York and pay $3.35 for regular. 28 cents of that is tax. You could even call that 3.68, because of the 10% of harmful filler that the ethanol represents. In a bad economy, increasing this price would make it hard on businesses, workers, people who might have scraped some pennies together for a weekend trip, or anyone else. In a good economy, it would hurt the bottom 50%. The price is also high enough. Rather than looking for artificial ways to make us suffer, maybe the government should promote more drilling in the US.
I’d love organize a TTAC tour of Germany – I’m sure some of you would come around after the first few miles on a perfectly maintained 36″ road bed. (U.S. uses 18″)
It is interesting to see the many delights of higher infrastructure spending.
Germany packs 1/4th (+/-) the people of the US into a land area less than 1/25th the size of the US. I still want more road infrastructure spending in the US, but let’s keep a sense of proportion.
Just for fun, find an internet city to city distance widget. Compare Berlin to Moscow and San Diego, CA to Portland, OR.
chuck,
You are totally right so we might need a $3 or $4 a gallon tax to get that level of civil engineering nirvana. I for one am 100% in favor of lavish and meticulous road maintenance.
I don’t think we should want to impose a new tax that will forc e us into building dozens of new coal-fired power plants. Or maybe they could be ethanol-fired, furthering the severity of the impending global food crisis.
All this pathological anti-oil manipulation is really messing the world up. But I guess that’s their intent.
Why not nukes? A move away from oil toward domestically produced uranium would do wonders for both employment and our balance of trade.
jmo: If only.
We should be developing all of our energy resources. We should be drilling for oil, processing shale and tar sands, building modular and breeder reactors, and also fund research into fusion (e.g. Polywell) and alternative fuels as well.
Our current policies on energy development are boneheaded and in many ways driven by the special interest politics of the Democratic party.
There is a real reason why Klein writes the word “seems” in this statement. It gives him a plausible exit when he is called out on it. What Klein wrote is intended to insult anyone questioning the intentions of those questioning the higher tax proposal. It is spin. It is biased crap from a crappy political hack.
No one is opposed to new revenue. Not everyone agrees that it comes around by raising taxes since we have repeatedly seen increased revenues due to lowering taxes over the past thirty years.
But if your education ended in 1974, and you have never questioned the now obsolete and discredited ideas behind raising taxes to increase revenues, you will end up as an old hack at the Washington Post, shoveling these old chestnuts as gems of wisdom and insulting anyone with an economic education sans 1974 – or anyone experienced in the real world.
There can be no bipartisanship when old keynesian geezers like this one believes he has had nothing new to learn over the past thirty years and is more intent on insulting everyone else.
Finally, let’s get one last thing straight – the Federal Government does not own the roads. We paid for them, we built them, and what they did was organize the efforts to do so. That’s it. The architect of your house does not have the right to tell you how to live in your house. Additionally, the architect of your house does not know better how to arrange the furniture in your house to fit your needs. There is a limit to how much citizens should empower governments in order to reach the highest level of efficiencies that fit each citizen’s needs with the least amount of waste of citizen’s wages.
Ezra Klein was a founder of Journolist, the approx. 400 person group of leftist writers who were caught coordinating their take on stories with each other and the Democratic Party. Anything he writes can and should be read as an outright lie. Original thinking and the truth are pretty much strangers to him.
To satisfy some and do my share to cut America’s wasteful energy consumption, I guess I could grow my own lentils, harvest squirrels and collect rain water for my own needs, just stay put to keep my vehicles and boats idle to eliminate gas consumption and cancel CATV, giving up Fox News.
Somehow I do not think that would satisfy some who frequently offer suggestions for the rest of us about how we should live.
If the Euros and Canadians want to spend more for gasoline, fine by me. The Canadians that visit the great southland during the colder months enjoying tourist things and medical care, seem to be doing OK. I have never stopped by the table of any to offer guidance on taxes, diet and sun deprivation.
What I do object to is a federal gasoline tax increase like the 5 cent a gallon increase during the Clinton years that our former Congressman voted for. The equivalent of one year’s worth went immediately to fund Senator Byrd’s “needs” in West VA. I also object to gas taxes going for multi million $ studies for high speed rail in my area. We have fairly decent roads and if some of the Canadians and others would go home, we might not have a congestion problem. If we had SW Air we could around better like the lucky Texans do.
As a recreational bike rider, I am all for paved bike paths. We should pay for those with local revenues on sales and property taxes, not gas tax contributions from around the country.
So you want property taxes to pay for special roads for recreational bicycle use? How about you subsidize a couple hundred gallons of leaded premium for my recreational classic car use? I will subsidize some boxes of rounds for somebody’s recreational gun use. That person could subsidize some hiking gear for that person’s hobby.
Jedchev,
I’m not just a recreational cyclist, I use a bicycle for transportation a lot of the time. In fact, other than on Sundays or on group rides, I hardly ever ride recreationally. If I’m on my bike, chances are it’s because I have someplace to get to. I don’t have a problem with taxpayer supported sidewalks for pedestrians, or roads for cars and trucks, and I don’t think it’s inappropriate for some level of public financing for bike paths. I do think it’s insane to reassign traffic lanes to bikes or buses, but then that’s just a tactic in the War On Cars that strives to make driving more of a hassle.
Everyone needs to take a deep breath and relax a bit.
After that, take a moment to consider the world we live in.
The gas tax hasn’t gone up since 1993.
Roads don’t fix themselves. your neighbors fix them by working for construction companies.
People get raises every year, and for the most part, materials get more expensive every year.
Shake off the political rhetoric for just a moment, I ask no more, and ask yourself if it’s fair for you to do the same work today that you did in 1993 and get paid the same as you did back then. If I have a contract with you to buy asphalt and I demand of you the same pricing that yo gave me 1993, would you give it to me? probably not.
IF you agree with the above, then you must understand that if the revenue stream doesn’t go up, then the number of repair projects must go down, or road workers, your neighbors, must get pay cuts back to 1993 levels.
Assuming that the political anger subsides, consider this: when Bill Clinton was in office, 18-ish cents of each 1 dollar-ish cent gallon of gas you bought went to pay for your roads and bridges. 20 years later, 18-ish cents of the 3 dollar-ish gas you buy goes to pay for the same. Argue against the government all you want, I endorse that. But really ask yourself if the above arrangement is really fair and equitable. Im interested in hearing justification to the contrary, because I can’t think of one.
I don’t have a problem with allocating more money to infrastructure, or even having a slightly higher income tax if it was guaranteed that it would go to that. But to increase a regressive tax on an inelastic good with a component of social engineering is not the way to do it.
gasoline demand has elasticity. I think this was fairly well demonstrated when gas spiked to $4/gal not too long ago.
Social engineering aspects of a gas tax are not my concern. My argument in this post was strictly based on financial and operational merits. I think it’s also fairly well demonstrated that sacrificing product quality as a hedge against inflation is not a sustainable strategy unless you like sand in your taco ‘meat’ ;)
I think the counter-argument is my computer is 1993, which cost $2000, is about as powerful, as well, a pocket watch today.
So in huge parts of the economy we’ve had effective deflation.
Roads (and health-care) however just keeping getting more expensive.
You have to ask WHY this is the case. Partially, labor is more expensive. Partially, government contracting rules/unions/anti-immigration types make it inefficient and want to prevent labor-saving devices. We could import 100,000 mexicans to build our roads for us — or better yet 100,000 chinese.
I’ve always though it would be easier to flood the zone — shut down a freeway for 3 months and repave it — rather than trying to do it lane by lane. It is a pain but you can plan around.
I would argue that while it seems like gasoline is elastic, the demand was really going down temporarily during a price shock. When it hit $4.00, there was a decrease in demand due to concerns about the increase and uncertainty about the future price of gas. People viewed it as a crisis and acted accordingly, putting off driving and conserving fuel. Once the price had stabilized at $3.25-$3.50, the demand returned, as the public became used to the new price.
The other problem I have is that the government is using a gas tax to subsidize these repairs. This hurts people of lower income the hardest and is a tax on investment in the economy, as most businesses use oil in some form to generate revenue. The businesses will have less money to invest and will most likely raise prices to compensate. Now, you are causing widespread inflation.
A simple, flat tax on income would tax the money after it is made. By taxing commerce and investment, the government is confiscating money before it can grow and thereby hurting the process by which the entire pie gets bigger.