There's a proposal under discussion in Congress - obviously driven by the I-35W bridge collapse - to add 5 cents additional tax onto each gallon of gas sold to pay for infrastructure maintenance and improvements. In response, the NTU has just issued a letter with the support of 50 different anti-tax groups, addressed to the President and Congress, strongly arguing against raising the gas tax. They point out that although this is supposed to be a temporary increase to pay for bridge repairs, similar temporary increases in the first Bush and Clinton administrations never actually went away and were eventually 'repurposed' away from their original use. They've got a good point. Passing new taxes in a panic when you haven't been responsible with the money you've already taken from the taxpayers seems like the height of irresponsibility.
President Bush has come out in opposition to the gas tax increase too, and he hits on the one thing that he and I and the NTU can all agree on. There's no good reason to keep throwing new money at the highways so long as we're saddled with the bloated 6-year highway plan passed in 2005 which includes $25 billion in pure pork in the form of almost 6500 earmarks, including the now-legendary 'bridge to nowhere' in Alaska. Cutting that pork would easily raise as much additional money for highway maintenance and repair as a 5 cent hike in the federal gas tax, so the idea of cutting the pork instead of raising the tax is very appealing.
In principle I agree. By all means let's make pork cutting our first priority. But when it comes to a gas tax there's a larger issue in play and that's where I have my falling out with the estimable folks at the National Taxpayer's Union, because all they're worrying about is cutting taxes. They're not looking at the larger picture.
What if, rather than just cutting the pork and leaving the huge transportation budget of more than $40 billion a year sucking at the taxpayer wallet, we were to take this idea of raising the gas tax and handle it in a responsible way? Why not improve our highway funding while making taxes more equitable at the same time?
Cutting $25 billion in pork from the six-year budget would free up about $4 billion a year to improve bridge safety, about half of the $8 billion you'd get from the proposed 5 cent increase in the gas tax. What if we went a step further? We could cut the pork, and then instead of adding 5 cents to the gas tax we could add 30 cents. That would raise $45 billion over and above the $4 billion in cut pork savings. That would be enough to pay the entire yearly federal transportation budget with $9 billion additional for urgent infrastructure maintenance like bridge repairs.
Article comments
— go to most recent comments1 - Doug Hunter
Very good article and a solid and logical reasoning. I like gas taxes as well. There's also a built in incentive for fuel efficiency. Use less gas, pay less taxes. Now could we use this potential gas reshifting of the burden to begin to make a dent in the AMT?
2 - Dave Nalle
Well, we ought to just abolish the AMT along with raising the gas tax. They have much the same effect. Beyond that, a hike in the gas tax could do good in a lot of ways people haven't even considered.
I wrote on it a while ago here on blogcritics in an article called The Price of Gas - Not High Enough Yet.
Dave
3 - Ian
First, excerpts from . . .
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Where is the outrage over sky-high taxes, regulatory costs?
by Steve Higgins
7/15/07 - New Haven (CT) Register (Fair Use excerpts)
"Reports last week from two nonprofit groups should serve as a wake-up call to Americans to start agitating for tax reform . . .
"On Monday, the Competitive Enterprise Institute reported that the cost to consumers of complying with federal regulations exceeded $1 trillion in 2006 . . . almost 10 percent of the nation's gross domestic product. It's nearly half the amount of government spending.
"Even more worrisome, the cost of complying with these multitudinous regulations exceeds the amount of individual income tax paid in 2006, about $998 billion, as well as corporate incomes taxes of $277 billion.
"According to the Washington, DC-based advocacy group [ Americans for Tax Reform ], the average American had to work through July 11 this year just to pay all federal, state and local taxes, as well as regulatory costs including workers' compensation and unemployment benefits.
"Congress should take one of two paths: Either cut tax rates and government spending drastically, or adopt the FairTax, an innovative proposal that would involve abolishing the Internal Revenue Service and its income tax and replacing it with a simple national sales tax."
Full article here: snipr.com/wherestheoutrage
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. . . The U.S. income tax system and the U.S. economy are inter-related, and are in DIRE trouble. If we, the citizens of these United States, do not act aggressively to spread the FairTax plan with family, friends and associates - our "nest eggs" stand to be devastated through a coming economic meltdown (see Kotlikoff interview, below).
Politicians are putting demogoguery and pandering above responsible governing - and they're able to do it because Americans do NOT understand - at the "get go" - politicians' / bankers' hunger for ever-increasing shares of the working person's bi-weekly paycheck; Americans do NOT understand the totality of taxes they pay. The FairTax shines the "light of day" on this, putting citizens back in charge to forcefully demand spending reductons.
YOU AND I MUST ACT to mobilize public opinion, and get the FairTax enacted, because the signs point to a probable devaluation of the dollar (for reissuance of an "Amero" ? - under a U.S.-sovereignty-busting North American Union?a>
[ NOTE: Does this help clarify your understanding of what's going on globally? a) Bush's persistence on rewarding illegal immigration? b) the North American Highway now under construction in Texas (to stream cheap labor into the covertly-planned North American Union marketplace designed to compete with 21st-century China market? c) the gradual increase in value of the Chinese yuan by China corresponding to China's economic growth? (This will result in the dumping of dollar-denominated debt as its manufacturing economy grows stronger - which guarantees devaluing and ushering-in of the Amero.) ]
Keep in mind, this NAU strategy - supported by the "super-rich" (member-owners of the Fed) - together with their politician buddies who want NOTHING to do with FairTax - runs contrary to simply making the U.S. a "tax free zone" for business under the FairTax. Politicians and bankers lose power when the U.S. is returned to a "savings-driven economy" from a "debt/interest-driven" economy).
Read the summary, "Laurence J. Kotlikoff on Long-Term Fiscal Problems in the U.S.," and download the podcast. ( Prof. Kotlikoff is an expert economist, and advocate, of the FairTax plan).
Powerful "elites," members of political and monied-interest "clubs" reaching into the halls of power in Washington, depend on keeping you and me uninformed of their plans. It is up to YOU and ME to ACT - and not live in a state of denial - based on what we now know is clearly happening to our financial futures.
After you consult the Kotlikoff interview (above):
• (If you're a member of your State FairTax organization) Contact your state or local FairTax Director to learn what you can do. Find yours here: snipr.com/localftleaders
• (If you're just learning about the FairTax bill) Join FairTax.org here: snipurl.com/scrapthecode
4 - Andy Marsh
I hear talk all the time of taking a specific tax and making that revenue for one or two things...sort of like taking the lottery and only using that money for schools or the monster suit against the tobacco companies and only using it for smoking education...it never works that way though...
I mean, would there really be a social security issue if those assholes in DC left the SS money alone?
I recently read somewhere that gas is underpriced and it was based on the price of bottled water...well, yeah...bottled water is just a bit overpriced...does that really mean that gas is underpriced?
We have monster road problems down here in Hampton Roads. There are nowhere near enough ways across the bay. The state legislature tried to start up a tax for road improvements during the last election cycle and the voters shot it down, so they turned around and imposed abusive driver fees on certain driving offenses like DUI and reckless driving. The problem there is that those fees can only be assessed against in state drivers and now they're being shot down in the courts over an equal rights thing...you know, why are you only screwing in state people.
What's funny about that is I heard a lot of radio folks and read a lot in the local paper about how the legislature was gonna get their money one way or the other and they did...
My problem and it's always the same problem when it comes to stuff like this is why does it always have to be more money out of my pocket? I have a boat, why do I have to pay a gas tax for fixing roads when I put gas in my boat? Or my lawnmower, or weedwacker?
How much money does the federal govt bring in a year in taxes? And besides the pork, how much of it is not spent wisely? How many $600 hammers are we buying these days? One or two less than in previous years...or one or two more than in previous years?
I think the proper answer is tolls. Local roads are taken care of with local property taxes, larger roads and interstates can be handled with tolls. Why should someone have to pay to maintain a road they never use? Tolls insure that those that use the road pay for that road. You base the tolls on number of axles or vehicle wieght and that way, you pay for your share of wear and tear on THAT road and not some road on the other side of the state that you've never used.
And what's your thought on what Corzine wants to do in NJ...turn the roads over to private sector...my thought is, that might work down here in the south or out in AZ...right to work states...but I think a place run by unions like Jersey would be in for a nasty fight.
5 - Clavos
I'm in favor, as many of you know from previous comments on other threads, of the FairTax.
But, I am getting sick and tired of the unrelenting campaigning on these threads by FairTax supporters, every time there's an article with the word "tax" in it.
Clearly, they are using bots to alert them, and they move instantly.
Before this day is over, at least five more of them will post on this thread.
Don't know about y'all, I'm tired of it...
6 - Clavos
Andy,
I have a boat, why do I have to pay a gas tax for fixing roads when I put gas in my boat?"
You don't. Boat fuel is road tax exempt.
However, if you buy it at an auto gas station, it will be taxed, because the pumps add it automatically.
FYI, farmers don't pay road tax for offroad tractors, etc., either.
7 - Andy Marsh
I buy my gas at the local gas station...on base...it's taxed...gas at marinas is much much higher than gas at a regular gas station. I believe it's because gas at marinas has no ethanol in it...
My boat is trailered. I have to move it about 500 yards from where I store it to the ramp. I pay taxes on my trailer every year. Property taxes. The gas station is in between where I store the boat and the ramp.
So Clavos, why do I have to pay that tax? Because of where I purchase it? That surely doesn't seem fair now does it? There's no way for me to get it back at the end of the year..
8 - Clavos
"There's no way for me to get it back at the end of the year.."
Actually, there is. Save your receipts and ask your accountant, or read up on it if you do your own taxes. You'll have to (among other things) have an affidavit of use and proof of boat ownership.
I'm NOT a tax expert, so be sure to consult one, but you CAN get most of it back, if you itemize.
If you don't itemize, well, then you've illustrated one of the reasons I support the FairTax.
9 - Andy Marsh
I do...and I'm not familiar with the Fairtax of which you speak...but if it's similar to a flat tax...I'm all for it!
10 - Jon Sobel
A big objection to increasing gas taxes is that they are regressive. Unlike, say, cigarette taxes, where a public health benefit could constitute an argument for a regressive tax, a gas tax tends to be unfairly borne by the working class and small businesses.
11 - Lumpy
I itemize and depreciate my car for the miles I drive. That helps. Plus if u run your car on ethanol u can deduct fuel costs.
But back to the main point. Won't a big gas tax hit the poor working schlub harder than anyone? Won:t it raise the costs of everything that gets trucked in to our grocery stores, causing huge inflation?
12 - Lumpy
Nice apam in #3 btw, Ian. Is it just me or is the fair tax becoming more cult like every day?
13 - Clavos
Lumpy,
Took me a few seconds to realize what "apam" was.
Yes, #3 was spamlike, which is why I posted #5.
14 - Jon Sobel
Just giving the FairTax site a once-over, I see an immediate and big problem with it: it relies on the HHS poverty rate, which is not adjusted for cost-of-living variations in different parts of the country.
15 - Clavos
Jon,
There are a number of "quirks" in the FairTax which need tweaking.
It really is just at the discussion stage at this point, and its proponents are open to suggestions and discussion.
I'm not well-versed enough to address the specific issue you raise, but their site asks for input, and they do have discussion groups as well.
16 - Dave Nalle
It does nothing to advance the FairTax agenda when their advocates start ranting about the mythical North American Union.
Dave
17 - Dave Nalle
But back to the main point. Won't a big gas tax hit the poor working schlub harder than anyone?
Not necessarily, because they are more likely to use public transport and more likely to buy inexpensive cars which are also smaller and hence more gas efficient. No one should complain about being poor and unable to afford gas when you can buy a used and perfectly reliable Geo Metro for $1500 and get 40mpg in it.
Won:t it raise the costs of everything that gets trucked in to our grocery stores, causing huge inflation?
Nope, because the trucks that bring things to your grocery store use Diesel which is currnetly untaxed and would remain so. This is a common tactic of the anti-gas-tax shills, to claim that raising the gas tax would raise food prices and cause inflation, but it's absolutely untrue.
Dave
18 - Nancy
Doesn't matter: no matter what tax they impose, they're gonna use it as a convenient piggybank to hit up whenever they need more cash for their various pork projects...just like Social Security, which as Andy pointed out correctly is supposed to be a legally DEDICATED tax fund - but isn't.
Part of the problem is, most of the maggots on the hill are all millionaires, so to them the idea of living on a budget (like most of us have to) is as alien as living on Mars. Maybe we should start electing some regular poor folks for a change...? No one worth over half a million need apply...?
19 - Jon Sobel
they are more likely to use public transport and more likely to buy inexpensive cars which are also smaller and hence more gas efficient.
The poor are "more likely to use public transport" only in urban areas where it is available. As are are the wealthy. I don't think that argument holds much water.
a used and perfectly reliable Geo Metro for $1500 and get 40mpg in it
Looks good on paper, but how does it stack up against a new Prius that only the better-off could afford? We need disincentives to purchase gas-guzzlers like SUVs. A higher gas tax would not function as such for the very well-off. The poor, as you note, wouldn't be buying an expensive new vehicle anyway.
In principle, I'm not against raising gas taxes, if something could be done in the short term to reduce the impact on working class people who have to drive to work (and, because they live in suburbs, exurbs, and rural areas, have to drive everywhere else too).
20 - Clavos
"Nope, because the trucks that bring things to your grocery store use Diesel which is currnetly untaxed and would remain so."
Dave, do you have a source for that? I believe diesel sold in gas stations IS subject to road tax; that's why the diesel I buy for my boat is considerably cheaper than gas station diesel, and is in fact dyed red to distinguish it from over-the-road diesel to avoid fraud, particularly by truck drivers.
21 - Andy Marsh
see...that's just wrong...boat diesel is cheaper than regular diesel but boat gas costs more than regular!
What kind of boat Clavos?
22 - Jon Sobel
I just looked at the DOE website. Diesel is definitely taxed - in fact, nationwide, at a slightly higher rate than gasoline.
New York State taxes diesel at 41.2 cents/gallon, and gasoline at 41.7 cents/gallon. (I found that on a retirement website - it might not be up to date.)
23 - Andy Marsh
You call yourself a libertarian and then write a piece about taxing me more...what kind of libertarian is that?
You want more tax revenue as a libertarian...legalize pot and tax it! I promise, I'll do my part to settle the nations debt in the first year!
Otherwise...please, stay the fuck out of my pockets!
And stop more assholes from building bridges to nowhere...and stop people from sneaking across our borders and leaching off our government...and then...if you STILL don't have enough money to fix the bridges and roads...we'll talk about some other tax...GEEZ!
24 - Andy Marsh
And one more thing...what part of TX do you live in that has any kind of public transportation system that you believe would be able to get you to and from the places you wanted to go when you wanted to go there? Or is that just for the rest of the people??? I've been to a few different cities in TX like Dallas and Houston and their public transportation systems didn't impress me. Maybe Austin has something special...ain't never been there...
The only two areas of this country that have a pubic transportation system worth a damn are NYC and the Bay Area...that's my experience anyway!
You might want to blow some other kind of smoke up peoples asses...just like you tried with the diesel tax a few comments ago...
I really like that let them eat cake attitude of yours Dave!
A perfectly reliable death trap...maybe we can find them some old Pintos and make sure they come with full gas tanks too!
25 - Dr Dreadful
The only two areas of this country that have a pubic transportation system worth a damn are NYC and the Bay Area...
Yes, those cities certainly do have very efficient pubic transportation systems. The STD clinics do a thriving business.
Sorry - simply couldn't let that one pass!