How Would You Feel About A New National Gas Tax?
Don't worry, there's not one in the pipeline just yet, but Flexo at Consumerism Commentary asks whether now—with fuel prices relatively low again, at least compared to the recent past—is a good time to consider one.
Some experts believe that right now, before consumers begin taking advantage of lower gas prices and buying large SUVs and Hummers again, would be a perfect time to enact a national tax on oil, natural gas, or coal, far up the supply chain. Its quite possible that this tax would be passed down the line to consumers in the form of higher prices, perhaps amounting $1 per gallon.
A CNN Money story last week looked at the two major options currently under discussion: a "cap-and-trade" law that would put limits on greenhouse gas emissions, or a simple—but steep—tax on carbon dioxide. The cap-and-trade option would require more administrative oversight to enforce and would lead to "higher prices for everything from electricity to manufactured goods, as companies are forced to either clean up their emissions or buy permits to pollute." The tax would be more transparent and easier to implement, but would be passed on to consumers at the pump in the form of (for example) a $1/gallon fee.
The carbon dioxide tax is highly unlikely to appear any time soon because it's politically toxic, even if it was used to offset other tax breaks elsewhere.
What do you think? Significantly higher prices at the pump, or slightly higher prices across a range of goods in the marketplace?
"Is it Time to Add a Significant National Gas Tax?" [Consumerism Commentary]
"Does the country need a big gas tax?" [CNN Money]
(Photo: ^riza^)
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Comments:
How about a Hummer tax.
I'd welcome a gas tax, but in return, I'd want the government to keep speculators out of the energy market and put some profit caps in place for both speculators and oil companies.
I'd welcome a (somewhat) higher, but stable gas price as opposed to one that swings from $5 a gallon to $1.49 and back again.
There's not a National Gas Tax already? I guess that *Federal Excise Tax* I pay on every gallon already and has been in place since 1932 isn't national? Could you tell me what State the FET is exempt in?
If one wants to stop people from buying gas guzzlers, tax the shit out of gas guzzlers! (I realize there is already a gas-guzzler tax) We already pay taxes on damn near everything we have in our lives. There's income tax, sales tax, estate taxes, gas tax, capital gains tax and so on. I shouldn't have to pay MORE taxes on top of that just because America, collectively, can't learn from its' mistakes.
Heck yes. The government should keep the price of gas at $4 or higher through taxes. It took $4 gas to get people to stop driving around in giant trucks. Let's keep it there and us the money to build public transportation.
yes on a gas tax.
Transportation costs need to be removed from the regular tax rolls and paid EXCLUSIVELY by drivers.
I hate being nickeled and dimed by regular taxes for a benefit that should be paid by DRIVERS.
It seems that higher prices are the only thing that makes us conserve. History shows low prices will just lead to us buying the SUV's again. Why not keep the money here instead of sending it to people who are trying to kill us?
It would also make alternative fuels more cost effective, so it should encourage its continued development. They could lower our tax rate so our overall taxes don't rise.
One potential problem would be if business had to pay the tax the cost of all goods and services would rise fairly steeply, so I think they should get a full tax credit. Otherwise I coundn't afford groceries.
Please!!! We need to tax the crap out of personal car/SUV gasoline usage. Look at the last summer: Public transit use up, miles driven down, biking up, and pollution down. The choice we have to make is not tax or not tax, it is tax now and reduce consumption or pay whatever OPEC wants us to pay in the future.
To recap, either we pay money to our government and used it how WE want or we pay money to foreign governments, some who support terrorism, to use how they see fit.
We need to remember that in the theory of supply and demand, supply and demand are not equals. The demanders (consumers) have all the power. Without them there is no need for the supply. Any cartel can be broken if the demanders decide to break the suppliers.
We should have at least a $1/gallon gas tax, and it should be adjusted by inflation. It's not just about gas guzzler cars, it's how much we drive. You use less gas per passenger mile in some monster vehicles by putting more people in the vehicle (buses, trains, etc.). A person who carpools with 4 friends in a Humvee is probably doing as much good for the environment as a person driving in the next lane in a Prius alone. An energy tax on vehicles is the fairest tax. A tax on larger vehicles discourages people from getting a car they can carpool in. A mileage tax taxes a person in a Prius as much as a person in Humvee.
A new, revenue-neutral carbon tax on gasoline (ideally offset by a reduction in the payroll tax) would be a fantastic idea. It won't reduce global demand for gasoline much, but it would make alternative power sources more competitive in the US, without forcing the government to guess correctly on which technology will eventually pan out (as direct funding would.)
The problem with taxing the purchase of big inefficient cars, as commenters above suggest, is that you can drive a high-MPG car on a very long commute and burn more gas per year than someone who owns a 15 MPG car but only puts about 7k miles/year on it. (Bias disclosure: I am in the latter category.)
A higher gas tax would discourage a wide range of gasoline-consuming behaviors, not just big cars.
But don't listen to me, listen to Harvard economics professor Greg Makiw:
Raise the Gas Tax: [gregmankiw.blogspot.com]
Carbon Tax Problem: [gregmankiw.blogspot.com]
@APFPilot:
Agreed. Can I choose not to pay for welfare, social security, environmental restoration programs, state parks, and the public school system? I don't use any of those so I don't think I should have to pay....
@dopplerd: Also, why not a sales tax on the purchase of a vehicle based on the fuel economy of the car. Purchaser would pay an additional 1 percent tax per average MPG less than 20 and get a 1 percent credit for every average MPG above 30. That way there is an incentive right from purchase.
how about a consumption tax system in place of all other taxes? it works in europe.
I would be all for a 50 cent or $1 increase in the Federal gas tax...with some important caveats. 1. Make it revenue neutral, i.e.: offset the gas tax increase with a tax reduction somewhere else. 2. Some or all of the tax reductions to offset the gas tax should be targeted to low-to-moderate income people. It could be a refundable tax credit, increase in the EITC, just so the gas tax increase isn't a regressive tax.
In my opinion, the purpose of a large increase in the Federal gas tax would be to make the cost of driving include what are now negative externalities. The tax shouldn't just be another cash cow for the government.
New taxes in this economy?
Not a good idea. The money will just go into a black hole.
I would support a gas tax levied directly at the pump, with exemptions for commercial shipping. Small taxes and tax credits for vehicles with mileage outside of a medium range (tax for guzzlers, credit for highly efficient vehicles, nothing for everything else) might also be a good idea.
I think there should be a huge tax on gasoline. An idea I've had in the past is that we could make the tax floating, kind of like a price floor. In other words, if gas falls below, say, $3.00/gallon, the tax would automatically adjust to keep the price at $3.00. I think this would discourage overconsumption while also smoothing out price volatility. It would also provide a stable environment for people and businesses to budget their future energy costs and a safer investment environment for alternative energy R&D.
Lets do it now and get it overwith!
How about neither?
Only if you cut my income tax liability by the amount I pay at the pump, dollar for dollar.
Look, this isn't going to have the intended effect. Right now, no one is buying SUVs or driving where they can't because they can't afford it. And when the money starts rollin' in again? Guess who isn't going to have learned their lesson about living within their means and telling the Joneses to feck off? Those that must keep up with the Joneses. This is going to decrease driving as much as increased taxes on cigarettes has decreased smoking -- ie: not at all.
And where will this revenue go? Clean energy tech that we'll never see because Big Oil is too deep in Washington? Let it subsidize a cut in the income tax -- that'll stimulate the economy.
No. No more taxes. We are over taxed. Energy needs to be CHEAP to run an econ.
Read my lips NO NEW (or higher) TAXES!! Some of these readers just don't get the fact that not all people live in urban areas where driving is one of many options. I live on a small farm and have to drive 40 minutes to work every day for less than $9/hr. There is no public transportation of any kind. Even at $1.89 the gas is steep. When it was $4 I had to skip meals and make major cut backs. A new tax hike may curb some gluttony spending on big cars and needless trips but it also hurts many others as well.
I cannot just "get a different job" there are not many around here that cater to my disability or offer medical.
Another thing as I mentioned farm. Every bit of food you eat takes gas in some form or another and farm equipment takes more gas than any soccer mom could hope to put in their SUV. Food prices seem high in the stores but the farmers that produce it are getting screwed with low prices when they sell (hence my having to get a job elsewhere). Add a tax and many small operations like the one here will cease to exist and food prices will skyrocket.
@evilhapposai: BTW I drive a Ford Escort, 34mpg. Many people cannot afford new cars and are stuck with what they can get. Lots of poorer families around here drive minivans and older 80's and early 90's SUV's. They are the only cars that are less that $1500 that are reliable. So if you raise the tax on the gas they are using. Might as well plan on spending a lot more on taxes going to welfare while you are at it.
@ironchef: Because nothing you do uses the transportation system. It's not like your food is shipped in trucks. It's not like your utility services use trucks to maintain their equipment. Roads are for the good of ALL of our citizens, even if you don't personally drive on them.
@dopplerd:
You must live in a place that has public transportation - it's not available EVERYWHERE.
Also, I'd love to see you ride your bike in sub-zero temps through six feet of snow.
@rugman11: However, those increases would show up in cost of goods etc. Not much of a change from now.
There would probably be an increase in the consumption of locally produced goods. Possibly a pro, I think it is.
However, ironchef neglects to realize that fuel consumption does not adequately correlate to wear and tear of the roads, such as heavy hybrids that produce as much wear and tear on the road as a similar weighted sportscar. Nor does ironchef integrate costs of road maintenance that make more sense to tax equally per vehicle rather than per mile driven, like salting the road during the winter.
It's why we have a hybrid tax model. Neither is perfect.
Some people talk of taxing arbitrarily in order to reduce other's individual liberty, but that technique will inadvertently hurt low income workers that must commute.
It isn't an easy solution, balancing many worthy causes against each other. Tax policy shouldn't, in my opinion, include vindictive measures. They tend to be short sighted and cause harm never contemplated.
So this would be a national 'we don't like what you are buying' tax?
@☠Grяrяrяrяrяrяrя is fresh out of weird screen names.: They tried that in the USSR. Because food prices were so unstable, the government fixed the price at a stable but artificially low price. With no incentive to grow food at below cost, food shortages were endemic.
Ditto for health care in Canada and other Socialist countries. The government fixes the price below cost, resulting in reduced supply and rationing.
If we do the same for oil, the government fixing the price of oil at an artificial level, we'll be able to enjoy the good old days of the 1970s with gasoline rationing and gasoline shortages.
@bigbadbyte: That would be a great idea, except in my city when gas was $4/gallon, the gov't bus company reduced service, cut the number of routes, reduced the number of buses.
Or do you mean the gov't should artifically increase the price of gas to $8/gallon "for our own good" and trust them to not spend the $4 on vote buying pork projects?
Bus fares should pay for the bus. Let the price of gas be determined by the market. Let people choose where to spend their money. Those things that are good ideas will survive. Those things that suck will die.
@bigbadbyte: Because those of us without the 'luck' to live within decent proximity of an urban center will really reap the benefits of a tax boosting public transportation.
I drive a relatively economic car (33-35 MPG for the longish drives I tend to do), and I'd much rather gas doesn't go back up to $4/gallon. Maybe if it wasn't such a freaking ordeal to go cross-state to a specific non-important destination via Not Airplanes (5h drive to 12h bus trip, yay) ...
Never, ever submit to a new tax no matter how "noble" the alleged intention. Taxes never go away and they always increase. I'd rather give my money to greedy speculators than greedy, power hungry politicians.
@JiminyChristmas: Here's what I propose: Start a gas tax, but add a tax deduction for every mile you drive for work, unlike the existing one which is for business trips only (no commutes). That cuts down discretionary trips. Further, change the deduction with income, so that it is inversely proportional. That way, the working poor effectively get gas at the commodity price, or even subsidized if the system is generous enough. Actually, make that deduction an incentive. Many people wouldn't make enough income to have enough taxes to deduct.
You may argue this will punish the rich disproportionately for driving to work. However, the rich are more fiscally able to deal with the taxes, or they can move closer to their workplace or work from home. The poor, meanwhile, are less likely to be able to do this, especially the rural working poor, who need to drive long distances and tend to live where the cost of living is less than their workplace. If they move closer to their workplace, they lose money in the move and have to pay more for the basics.
I guess this would be the breakdown: At the pump, a $1-1.25 tax/gal. In terms of incentives (based on the average vehicle, 25 MPG as per CAFE and $1.25 tax, for a gasoline tax cost of $.05 per mile): Working poor: $.05 per mile or more. Middle Class: $.025 per mile. Rich: $.01/mi. Super Rich: None.
I don't mind if it isn't revenue neutral if the money goes directly to causes and expenses directly related to transportation, such as road maintenance and infrastructure, subsidies to develop greener cars or public transportation, and so on. If some of that money ends up becoming a subsidized loan for a company working on a green transportation project, so be it. Plus, if the company decides to change the nature of the project or their environmental focus, the loan could change so it requires a higher interest rate, encouraging corporate accountability.
@johnva: Except you're then never going to see any tax revenue once the suppliers realize that they can just raise their prices to stay at the tax floor because going lower gives no increase in sales.
Al Gore was right - Global warming is caused by people. So as part of the "cap-and-trade", we need to start taxing people. After all, they give off C02 and CH4 green house gases, right?
If you really want to get our CO2 emissions down to 1990 levels, we need a major epidemic in order to get the number of people down to 1990 levels, too.
@Triborough: Superstring Broken Window economics: The economy is going through a high degree of entropy. A black hole removes entropy. If you feed a black hole mass, its event horizon grows and it sucks up more entropy. So... Gov't taxes citizens, cashes revenue in pennies, tosses pennies into the singularity, and several large companies are swallowed, along with the breakdown of their economic systems and the bad mortgages.
It's not entirely the free market, but hey, it works. There is one problem, though. Some quantum physicists say information can be recovered from a black hole, meaning the toxic debt could possibly surface again. Creepy.
How about no new taxes? I think we can all agree that we know how to spend our money best. Giving the government more money to piss away is just going to raise the cost of living.
Just what we need.... More taxes. Does anyone here realize that you can't do a damned thing without being taxed for it somehow? The government has no right to get a share of every damned thing we spend money on.
The problem is that it is impossible to tax people in a manner that is "fair." Vehicles in the northern states are more likely to be 4WD as it is essential in many areas to be able to get anywhere in the winter. So as a result you will be taxing those people more (4wd as well as cold temps = lower mileage). Also consider that people in rural areas have to drive far more miles relative to their income, so it would disproportionately affect them.
It is one thing to lump everyone in the same city together, another to do it on a national scale.
NO NEW TAXES!
So-called gas guzzler taxes are immoral. SUVs already cost more than other cars so they pay more in sales taxes. SUVs burn gas like it's going out of style, so they are paying more in gas taxes. SUVs pay more in insurance. They pay more in every way as it is.
Maybe all you rich people earning more than $250K/yr driving your Priuses to the park-n-ride lot to take the bus to your "green" job can afford $5+ gasoline, but Americans aren't all as lucky as you.
We don't need gov't to punish regular Americans with high gas prices. OPEC will cut oil production ala 1970s and prices will skyrocket on their own.
What a great idea, new taxes. In fact, I think we need even more different types of taxes. The government spends our money so wisely. I've a few ideas on that:
- With more money they could open another front on the war on terror - you know, that environmentally friendly one.
- We could raise another 700bn for American companies, why force them to earn their business and be responsible to consumers.
- Since it is now permissible to use "economic pressure" to force fellow Americans to change their habits we don't like, lets just do away with all the bill of rights, I'm sure there is good reason if we look for it.
Come on! If you simplify a problem to one issue articles and then expect the government to be crusading problem solvers your elected representative will be happy to find people (suitably compensated) to take your choices from you.
If you want to start change, take responsibility and change your own habits.
You do realize how much power that PC your using consumes? The heavy metals used in its construction are not very enviromentally friendly either.
My solution is simple, instead of personal computers you can go to your local library. If we must have our own, a simple $50 a month fee to offset the carbon footprint, I'm sure you can support that.
By the time we are finished adding taxes and fees you can be on government assistance, with the government making your choices because it is only fair if they are paying your way.
Why doesn't government stop wasting money before coming up with more taxes. Massachusetts is proposing a bogus gas tax to, supposedly, "prevent" the cost of having to raise the Mass Pike and Tunnell tolls going into Boston, but it's a total fraud. About 2 months ago, while legislature wasn't sitting, the Turnpike Authority -- which consists of unelected people who make the decisions for the Pike -- met and discussed some 100 - 400% hike in tolls across the board throughout Massachusetts, but mostly around Boston.
Everybody was up-in-arms and there was strong public opposition. Naturally, the legislature sits a month later and they come up with this "genius" strategy that they will hike a gas tax instead of the tolls. It's a fraud, it was planned from the start: they raise this RIDICULOUS 400% toll increase (and I am serious, many tolls were doubled and quadrupled), and then the fraudulent legislature -- unscrupulous and record-makingly corrupt -- come into "save the day," presenting this fraud scenario that "well, if we don't raise the gas tax, we'll need higher tolls."
NO, No, NO you idiots... stop spending. Cut spending, consolidate, find new ways to save money before raising taxes and tolls. Cut highway projects, cut the millions and billions in stupid discretionary spending, cut the stupid offices that "research" how the public will take toll or tax increases. Increased taxes should not be a first resort, yet government increasingly makes them one, and people ignorantly slosh through it because they legitimately believe that the alternative is worse than the taxing reality.
It's all a freaking scam.
@johnva: Zeke answered this one. Every retailer would jack the price right to the floor. If government is willing to cheat to get extra money, why not corporations who -- despite protests otherwise -- are usually far more moral than government?
First of all, there's no reason to enact laws to keep people from buying SUVs right now, cause nobody's buying them, no matter what the price of gas is. Now, when the economy recovers, people will start buying cars again, but at that point, gas will be back up to 3.00 a gallon, and that will keep the SUV demand low.