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What Do You Think of a Gas Tax?

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All of a sudden, the idea of instituting a much higher gas tax (to keep gas at about 4-5 dollars a gallon) to fund transportation and infrastructure seem to be getting a lot of press. The comprehensive automotive industry blog Autoblog reports on great editorials at Ward’s Auto World (must reading) and Tom Friedman again in the NY Times (who calls such a tax “win, win, win, win, win.”

This very European move is something many experts have been recommending for many years, commenting that compared to other nations, US drivers have enjoyed essentially free road construction, maintenance, and usage while we expect almost every other form of transportation (and the people who use them) to essentially pay for them in full, if not even above that (considering taxes AND usage fees).

There’s also now an argument being made that US automakers would also benefit… Sound counterintuitive? It’s not… It takes 3-5 years to design a automobile, and one thing experts say has put US makers at a huge disadvantage is that they’re following what the public trends are 3-5 years before a model is introduced… Huh? Example: Gas is $1.30? Design the Hummer… That Hummer comes out 3 years later and what happens? Gas is $4.00 a gallon. Quickly kill the Hummer and retool to build more small cars. What happens? Gas back to $1.40… A steady $4 or $5 gallon of gas would allow them to plan their future models much better…

Other advantages?

  • The environment benefits
  • Less Middle East oil used (less $ there and it frees up our policy options)
  • Increased mass transit use and funding
  • Would reverse trends promoting suburban and exurban development

What do all of you think? Post in the comment section…

Image from cottagegrove.org (an Oregon town)

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8 Responses to What Do You Think of a Gas Tax?

  1. Nick December 29, 2008 at 11:55 am #

    It’s a fantastic idea. Pigouvian taxes benefit everyone!

  2. Bret Ancowitz December 29, 2008 at 2:35 pm #

    Since I had to look this up myself: Pigouvian taxes: “Tax levied to correct the negative externalities of a market activity.” A pollution tax or a carbon tax would be an example…

  3. Jim December 29, 2008 at 11:29 pm #

    I would totally be in favor of this, especially since gas seems to be at a price we haven’t seen in almost a decade.

    I have already cut back on my driving and my wife and I are going down to 1 car.

  4. Jen Coleslaw December 30, 2008 at 7:50 am #

    I am in favor of a gas tax, but I don’t want the $ to go into the general fund. Here are a few money making schemes other states use to fund and protect important programs (oh, like I don’t know, EDUCATION)

    1. Lottery tickets that are specifically tied to programs such as education or arts or environment. I could see a RI scratchy ticket of little historic buildings that have been torn down, with the proceeds going to historic preservation efforts. Or perhaps a gigantic treed parking lot that scratches all the trees off to find out what you’re won, and that ticket goes to environmental efforts.

    2. vanity plates. Virginia has hundreds of vanity plate choices and they cost about $100 a year. People pay that. Many of the plates (such as animal rights, or Remember the Pentagon on 9/11) receive a portion of all funds received in “selling” that plate. Rhode Islanders so identify with their license plates and their low numbers that I can’t imagine it wouldn’t be a money maker

    3. Usage taxes and taxes on things like cigarettes and gas and alcohol. I know these things are heavily taxed already so I’m not suggested necessarily additional taxes (maybe on gas) but that the $ be protected and available to cover health insurance issues, or education, with the gas tax going to pay for roads and transit options. Of course, the problem with that, at least with gas taxes, is what we saw this year–the price of gas goes up, people use less of it, the state doesn’t collect enough money and somehow RIPTA which has seen record ridership, can’t afford to run routes.

    I think that there must be a fundamental change to how the state budget works, and I don’t know what that is, because I’m not an economist, but however they’re doing it–it isn’t working right.

  5. Jef Nickerson December 30, 2008 at 11:29 am #

    Lottery sales are way down this year nationwide (as are casino profits (Americans are realizing that in tough economic times, lotteries are a bad investment?)) but sales are up in RI. The Million Dollar raffle, which I believe are $20 tickets, sold out all 120,000 entries.

  6. Jim December 31, 2008 at 1:22 am #

    When I moved to RI, I heard about the low numbahs and people clinging to their plates and all that. CT has a large number of specialty plates that donate money to various charities, like Save Our Sound (for LI Sound cleanup), CT Greenways, and various children’s and animal charities. What does RI have? There’s the ugly sailboat plate, which was the only additional option I had when I moved here (other than things like veteran and early American cars, which you need special cars or to actually be a vet). The sailboat plate costs double but as far as I could tell, the extra money just goes to the state and nothing special. How about putting that money to Save the Bay? Make a greenways one to help pay for the bike paths or other environmental projects.

    I do think I remember them bringing back the Mr Potato Head one to help fight hunger.

  7. Jef Nickerson December 31, 2008 at 1:42 am #

    When I lived in Mass. for the very very very short time that I owned a car, I had a Cape & Islands plate:

    The fees go toward economic development on the Cape. Surely Rhode Islanders would buy a Providence plate.

  8. Jef Nickerson January 3, 2009 at 4:50 pm #

    Ray Magliozzi from Car Talk supports a gas tax. Read and listen (scroll to the bottom for the audio link) his rant here.

    Ray says:

    The other thing that the gas tax revenue could fund is high-speed-train infrastructure between major cities. And who would build all of the new high-tech, high-speed trains we’d need? GM and Ford! We’d help them start a mass-transit division, convert some of those factories from building inefficient gas hogs to building high-speed trains.

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