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It would certainly seem counter-intuitive for someone who generally prefers excise and user taxes over most others to suggest eliminating the gas tax, but hear me out. My understanding of the benefits of any gas tax is that it both provides an incentive to conserve, as the price marches higher, and that it forces those who use the roads to pay for them. In the case of petroleum products in particular, it also could improve our national security posture by reducing our reliance on foreign oil. On a theoretical basis, or in a vacuum, I can understand, and even support the logic behind those arguments. The problem is that we actually live in the real world and that the issue cannot be segregated from others.
In the first place, as I pointed out in two previous articles, I’m looking for ways to decrease, not increase, the price of energy. In inflation adjusted dollars the current price of a gallon of gas is approximately one dollar over its historical price. As a consequence the disposable income of the American consumer has been negatively impacted to the tune of $138,496,176,000.00 (The computation is mine, and thus there is no reason to go follow the link) Obviously this is a sizable sum, to say the least, with a large portion of those funds being sent overseas and thus resulting in an increase in the inflation rate, while at the same time providing little economic benefit. If one keeps that figure in mind, increasing the gas tax by ten cents would represent an additional ten percent of the referenced figure being taken from the pockets of those who can least afford it. Yes, we need to conserve and reduce our dependence on foreign oil, and perhaps oil in general, but forcing even more people at the lower end of the economic spectrum into poverty doesn’t seem to me to be the best way to do it.
The next “bundle” of reasons I am against the gas tax have to do with the way the tax is collected and spent. On both the state and national level, the amount of tax money collected, though supposedly earmarked for transportation, generally proves to be too much of a temptation to our illustrious politicians and a significant portion of it is diverted to other uses. Even when it is used for transportation, it may not go to the infrastructure related to roads, but rather to other transportation systems including various mass transit schemes. This obviously tends to negate any claim supporting the notion that the gas tax is a “user” tax and, as a result, a “fair” tax.
The fact of the matter is that it is also a “hidden” tax, even though we see it reflected in the price at the time of purchase. Unlike, for example, a sales tax, we generally include all applicable taxes when we consider the price we are about to pay. This is no small benefit to those who wish to harvest more tax revenue with a minimum of dissention. As consumers, we are now used to increases and decreases in the price and an increase of ten cents a gallon will simply be viewed as another increase, not a tax increase. Some might suggest the hidden nature of the tax is one of its benefits, but I don’t see it that way. If for no other reason, I would suggest that the nature of the gas tax provides the perfect opportunity for excessive spending without much public oversight, and thus the money collected is bound to quickly disappear without a trace, at which time the same groups will return asking for more.
The gas tax is also an extremely regressive tax that, arguably, few can avoid. Its impact on the poorer among us is much more negative than it is on those of us who have more disposable income. There may still be some areas available to conserve, but I would suggest most of us would be unwilling captives to the tax based on our need to get to work, school, or other non-negotiable destinations. Switching to more fuel efficient vehicles may not be an option for many, due to financial or other constraints, which further emphasizes the regressive nature of the tax.
I realize that the reader may have already considered the previous reasons and yet continues to support an increase in the gas tax, perhaps based on ecological or national security concerns. I understand those concerns, but wonder if this is a case of using the wrong medicine to cure the disease. It seems to me that the existence of such a tax, and the corresponding large income associated with it, provides an incentive, rather than a disincentive, to remaining a petroleum based economy. On many occasions the profit to the various political jurisdictions on one gallon of gas is much higher than the profit accruing to the private sector. I would suggest that no alternative energy source will be promoted within the United States until this basic fact is addressed. The requirements pertaining to any solution from the perspective of Big Oil and Big Government, who are essentially partners in the oil business, include the ability to tax the newer source in a way to make up for any lost revenue as well as ensuring that the new solution is amenable to control by Big Business, rather than dispersed amongst the citizenry.
Further, from the standpoint of the environment, less road construction is a good thing for a number of reasons. Aside from the obvious effect of the road itself, one must also take a look at other consequences. Cities could be a primary beneficiary of a less user friendly road system with more people seeing the benefit of living closer to the city center. As a result, mass transit might become a much more viable alternative to a wider segment of the population. Less oil would be consumed, both as a result of less driving and as a by-product of using less petroleum products during the road construction process. Builders would have the incentive to build up, not out, slowing the disappearance of our agricultural and rural land. Even the railroads might become more financially viable, both as a carrier of freight and as a passenger service.
Finally, the better approach might be to tax other petroleum products at a higher rate, accelerating research into finding better alternatives. A significant problem in finding alternative transportation sources is in the weight associated with most of those alternatives. This is not the case where movement is not a factor. I would suggest that the more feasible way to depress our use of petroleum products, thus improving our national security posture, is to lessen the focus on finding alternative ways to fuel our vehicles and to increase our focus on finding other ways to heat our homes, cook our dinners, and power our work places.
Thank you.
