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Andrew
Guest
Gas Tax Revenues are down due to the recent Recession and more Americans driving hybrid cars, etc.
Isn't it time for the United States to raise the Gas Tax?
Isn't it time for the United States to raise the Gas Tax?
Less people are driving, so let's raise the gas tax!
Less people are shopping, so let's raise the sales tax!
etc...Less people are traveling, so let's raise the transportation tax!
Yes. The federal excise tax of 18.3 cents/gallon on gasoline has not changed since 1993. Construction costs have gone up a wee bit since then. The Highway Trust Fund (HTF) is about to run out of money later this year, which may finally force Congress to step up and either raise the excise tax, switch to a wholesale tax on gas component, or find other sources of revenue. The problem is that even an adjustment only for inflation since 1993 in the gas excise tax would cause some to go nuts.Gas Tax Revenues are down due to the recent Recession and more Americans driving hybrid cars, etc.
Isn't it time for the United States to raise the Gas Tax?
Wouldn't this Trust Fund last 6 years under Amtrak's proposal?Yes. The federal excise tax of 18.3 cents/gallon on gasoline has not changed since 1993. Construction costs have gone up a wee bit since then. The Highway Trust Fund (HTF) is about to run out of money later this year, which may finally force Congress to step up and either raise the excise tax, switch to a wholesale tax on gas component, or find other sources of revenue. The problem is that even an adjustment only for inflation since 1993 in the gas excise tax would cause some to go nuts.Gas Tax Revenues are down due to the recent Recession and more Americans driving hybrid cars, etc.
Isn't it time for the United States to raise the Gas Tax?
On the other hand, VA, MD, PA, MA, Wyoming are among the states that either raised gas taxes or other taxes in 2013 to pay for transportation and infrastructure needs. So it should not be impossible.
The pending depletion of the HTF and the renewals of the transportation bill and Amtrak reauthorization will be the topic of much discussion and debate on Capitol Hill over the next 6 months. This is why Boardman is calling for a Transportation Trust Fund to replace the HTF so Amtrak can get steady funding from the trust fund rather than be totally dependent on varying annual funding from Congress.
The HTF has run out of money every year since 2008 and has required an infusion of funds from the General fund to remain solvent. It has to a large extent become one of the bigger Third Rails around; no one wants to touch it for fear of being electrocuted, which in politics means being voted out.The Highway Trust Fund (HTF) is about to run out of money later this year, which may finally force Congress to step up and either raise the excise tax, switch to a wholesale tax on gas component, or find other sources of revenue.
I've often wondered what will happen once (if?) electric cars start gaining a meaningful market share.It's not strange, it's perfectly logical.
Revenues from the gas tax are desperately needed to build and maintain our roads. Unfortunately, because the Federal gas tax hasn't been raised in over 20 years and isn't indexed to inflation (and is a flat rate, not a percentage of the gas price), combined with less fuel being used (both from increased fuel economy and decreasing vehicle miles travelled), means the money just isn't there.
We would need $1.61 in gas tax revenue today to purchase the same amount of stuff that $1.00 would have purchased in 1993 when the gas tax rate was last reset.
That would be one approach, but it might disprportioantely hurt people in rural areas whoEventually I think that we're going to have to go to a vehicle miles traveled tax.
States with annual inspections can just read the odometer every year at the inspection and charge accordingly.
States without them may have to implement them (or at least annual odometer readings).
Under today's system they still wind up paying more anyways. It's slightly less drastic as most vehicles get better highway gas mileage than city, but they still pay more.That would be one approach, but it might disprportioantely hurt people in rural areas whoEventually I think that we're going to have to go to a vehicle miles traveled tax.
States with annual inspections can just read the odometer every year at the inspection and charge accordingly.
States without them may have to implement them (or at least annual odometer readings).
1) need to driver more and further all the time to get to work, shop etc
2) don't have ready access to alternatives such as public transportation
3) benefit disproprtionately little from that revenue as most of the cash goes into big highway projects within or between big cities. Very little gets spent on fixing up little rural roads.
So effectively those who would contribute the most would get back the least.
The Texas DOT did a study a few years back and found that Freeways within cities came closer to covering their costs via fuel taxes. They still fell short, but it was the rural areas that got the biggest subsidies to keep those highways going.3) benefit disproprtionately little from that revenue as most of the cash goes into big highway projects within or between big cities. Very little gets spent on fixing up little rural roads.
I think big cities should do what London has done and introduce a congestion charge. Anybody who takes their vehicle within a certain area has to pay. Enforcement is by automatic cameras that recognise the vehicle's registration plates and cross check with a database to see if they've payed (and you can pay online). The bigger the city, the better public transit and thus the less need there is to drive. So nobody is being unfairly forced into this system. Excemptions apply for registered taxis, buses and I think certain classes of delivery vehicles.Once you get out into rural areas, the amount of infrastructure they actually have (paved roads with constant maintenance, municipal water/sewerage hooked up to indoor plumbing, etc.) tends to be quite low. But if they are making frequent, longer trips into town using those improved roads, then they are using the infrastructure and thus should pay for it.
There's no perfect way of setting up a fee structure that's 100% fair. The "most fair" from a fee perspective would be tolls, but that would either be impractical (toll booths every few feet), or be unacceptably invasive of one's privacy (tracking devices on people's cars that show where you've been and every road you've taken; this is different from the transponders that only check you at certain points on the highway because it's easy enough to avoid something like that).
The gas tax isn't going to work for vehicles that don't use gasoline/diesel fuel. Those vehicles may not contribute as much to air pollution, but they certainly do contribute to infrastructure needs.
I figure the best fee structure currently practical would be a combination of gas tax (mainly to curb pollution/discourage burning of fossil fuels when not needed), VMT (obviously adjusted for the weight of a vehicle, which would cover the maintenance of the roadways), and tolls/congestion charges in certain areas to discourage driving in the busiest areas.
If you wanted to dedicate the funding, the gas tax could go to clean energy research, VMT would go to infrastructure maintenance, and congestion charges would go to public transit investment. Not that I'm expecting any of this to be feasible in the current political climate.
Agree completely that a combination of the three is going to be the best solution.I figure the best fee structure currently practical would be a combination of gas tax (mainly to curb pollution/discourage burning of fossil fuels when not needed), VMT (obviously adjusted for the weight of a vehicle, which would cover the maintenance of the roadways), and tolls/congestion charges in certain areas to discourage driving in the busiest areas.
If Republicans refuse to increase subsidies for mass transit, 98.5% of voters won't notice! and of the ones that notice, 95% won't even care. Don't ever make the mistake of thinking, however significant this issue is to you- or me for that matter- that anyone else gives a crap. Very few people are actually anti transit. Most simply don't care about it, and more than few are not even aware it exists. We are not moving forward until you and your ilk get this concept.If Republicans refuse to increase subsidies for mass transit, then they will have a very hard time beating Clinton in 2016...
I was talking with Charlie about this, and there are some real issues that aren't considered. The biggest problem is likely to be sticker shock, since a VMT at $.10/mile (I'm basing this on tolls on, for example, the PA Turnpike, which are a bit higher...I think they hover in the $.11-.12 range) is going to give a lot of people an annual tab of $1200-1500 all at once. Even if they pay as much or more in gas tax revenue right now, it comes in little drips and is "hidden" in the price of gas.Eventually I think that we're going to have to go to a vehicle miles traveled tax.
States with annual inspections can just read the odometer every year at the inspection and charge accordingly.
States without them may have to implement them (or at least annual odometer readings).
Someone who drives 12,000 miles a year and gets an average of 20mpg pays $108 a year in federal gas tax and more or less the same in state gas tax. A fee of $0.10 per mile - $1200 per year - would be about a 5x increase.I was talking with Charlie about this, and there are some real issues that aren't considered. The biggest problem is likely to be sticker shock, since a VMT at $.10/mile (I'm basing this on tolls on, for example, the PA Turnpike, which are a bit higher...I think they hover in the $.11-.12 range) is going to give a lot of people an annual tab of $1200-1500 all at once. Even if they pay as much or more in gas tax revenue right now, it comes in little drips and is "hidden" in the price of gas.Eventually I think that we're going to have to go to a vehicle miles traveled tax.
States with annual inspections can just read the odometer every year at the inspection and charge accordingly.
States without them may have to implement them (or at least annual odometer readings).
I see that as being open to several kinds of fraud or gaming:
(1) Odometer tampering would likely become common, and it would be pretty hard to prove that the owner had done it. I'm actually reminded of the time that the odometer on my car jammed for around 2000 miles (the car was 20 years old and had some other issues). Granted, this is more of an issue for older cars, but that's still a lot of cars that are still on the road.
(2) Registration gaming. Let's assume that a state doesn't assess a VMT. Take Delaware, Vermont, Rhode Island, or New Hampshire as an example (since they're all smaller states...and since Delaware in particular loves playing games). If VMTs became common, my instinct would be to start up a company that would nominally own your car with you paying a large fee at the start and then permanently leasing the car from us under an agreement, enabling the car to remain registered in Delaware. There was a version of this sort of game with car rental agencies in the Northwest at one time. To be fair, if the VMT is uniformly assessed (i.e. at the federal level), this could be partly averted, but if states get into the game this seems almost inevitable. There may also be ways around any registration rules that would frustrate this (such as the car remaining a "rental" and the "rental" being nominally renewed repeatedly over short periods). Even if there were a 30-day rental limit, I can see someone being on their 100th 30-day rental.
(2a) A version of this also seems likely with car sharing. From what I've seen of some European car sharing groups, there are models that allow you to "let out" your car when you're not using it and get a share of the rental charges from that. This model also has another advantage in that you could probably "switch out" your car for another one in the system with some ease (likely for a transfer fee of some kind to allow new cars to be acquired). Basically, every 30 days you'd tell the agency whether you wanted to keep your current car or swap it out for one in the system.
(3) Cars going illegitimate. Considering that I suspect there are a lot of judges who won't want to clog up local jails with offenders over vehicle registrations (and considering how many drivers are uninsured), risking a fine of several hundred dollars for driving a vehicle with an expired inspection sticker to avoid a tax bill of several thousand may be a calculated risk (and, because of the attendant safety issues, become a very serious problem).
I would not use the PA Turnpike tolls as a guide to what a VMT rate might be as the revenue from the PA Turnpike is being used to pay for transportation and transit outside of the Turnpike. PA was stuck on raising the gas tax for so long that they kept jacking up the tolls on the PA Turnpike instead.I was talking with Charlie about this, and there are some real issues that aren't considered. The biggest problem is likely to be sticker shock, since a VMT at $.10/mile (I'm basing this on tolls on, for example, the PA Turnpike, which are a bit higher...I think they hover in the $.11-.12 range) is going to give a lot of people an annual tab of $1200-1500 all at once. Even if they pay as much or more in gas tax revenue right now, it comes in little drips and is "hidden" in the price of gas.
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