The Approaching Fiscal Cliff: A Bike-friendly Solution


Gas taxes in the US are laughably low compared with more advanced countries.  With the "Fiscal Cliff" looming, an increase in the Federal gas tax (18¢/gal) for the first time in twenty years seems iike a no-brainer.  

We could add $5/gallon more tax and not really have anything to complain about compared with other First World countries....and generate $1 trillion annually, to erase much of the Federal deficit.

Such an increase could be phased in.  But the end result would be (1) vastly more people living and working in a more compact area (cities and inner suburbs), (2) more support for transit and bicycling infrastructure, (3) far fewer cars on the roads driving fewer miles per year, (4) a huge reduction in the US's trade deficit and a strengthening of the dollar abroad, (5) a major reduction in the country's carbon footprint, and (6) beneficial environmental effects too numerous to list.

Why shouldn't we cyclists enthusiastically write our elected representatives sitting motionless in Washington, demanding such new taxes as a solution to the nation's problems?

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Permalink Reply by Will on November 11, 2012 at 4:15am

The problem with a huge tax increase on gasoline- and I agree that we need one- is it's hugely regressive. There are poor people who already spend a relatively large portion of their income on gasoline just for commuting, and a large number of these are in areas not well (or not at all) served by public transportation. A $5.00 per gallon tax increase might make their monthly budget unworkable. Incidentally, these are also the same people who can't afford newer, more fuel-efficient vehicles.


Phasing it in would help, but it might take a long time to minimize the effects on the nation's poor- say, over 10 or more years. You're not going to get results 1 and 2 in a few years, or even 10 years.

Permalink Reply by Doug Haynes on November 11, 2012 at 9:12am

We've had this discussion here before; not only is there the part of it where the low income folks who have commutes where they have to drive get hit but we ALL get hit by a higher gas tax. 

Pretty much EVERYTHING you buy has a price directly affected by gasoline.

Permalink Reply by mike w. on November 11, 2012 at 9:13am

Way i see it is we could just fall over the cliff or- by implementing such a tax- jump over it.

Chose your poison: ya pays yer money and yer takes yer chances.

Mind you, i know US gas prices are artificially low, but i can't feature the US ever going to realistic pricing any time soon. The resulting social/political upheaval would be breathtaking.
 
clp said:

You guys don't seem to realize that the Fiscal Cliff, now only 50 days away, is going to be a bit "disruptive" too.  And will certainly push the country back into Recession, according to the Congressional Budget Office.  The Fiscal Cliff is a massively disruptive set of programs:

"According to Barron's, over 1,000 government programs - including the defense budget and Medicare are in line for "deep, automatic cuts."

In addition, we'll all be paying higher taxes through increased income and payroll taxes, taxes for the new ObamaCare, alternative minimum taxes, and many others.

One way or another, this problem will be solved.  Why not tell your elected representatives that you want much higher gas taxes first, that are indexed to inflation?  Phone numbers, addresses and email links for all your politicians are here.

 

Permalink Reply by Duppie on November 11, 2012 at 9:50am

The problem with such taxes is manyfold:

1. It will be political suicide to even suggest a $5/gallon gas tax.

2. the phase-in nature of this gas tax largely diminishes the tax benefit. Remember that it took these other developed countries 20-30 years to raise the taxes to the current level. We need tax revenue on January 1st, not in 2040.

3. An increase in cost inevitably leads to the development of alternatives, i.e. more fuel efficient vehicles or alternative fuel vehicles. Therefore the tax revenue may not be as large as you'd expect.

4. New CAFE standards will increase the average fuel economy significantly by 2025. Tax revenue will decrease because of that (unless drivers make up for it by driving more)

Permalink Reply by S on November 11, 2012 at 10:04am

The fiscal cliff is going to be disruptive but nowhere as disruptive as doubling the price of gas in 5 years or even 10 years. When this happened in the 70s and again in the early 2000s, the economy basically went into a slump that took years to go away.   And now, you want to voluntarily apply that to the economy again even though it's still recovering from the financial crisis of 2007-2008?

Pretty much everything that you use gets shipped and will be affected by phasing in a $5 gas tax over 10years.  Even stuff like local farmers markets will get killed when farmers start paying a lot more to drive their veggies in to the market.  

Instead of a gas tax, why not try to contact your rep and senator to get them to actually, you know, let taxes on the wealthy increase again?  I don't think higher tax rates are really going to hurt people making more than 250k a year and if you add in getting rid of tax loopholes and maybe doing some targeted cuts of a few programs (like military spending, subsidies for companies and industries doing well, and a few other areas) the deficit would probably go away.  As is, the deficit is already projected to drop by half in 2015 as the economy improves and the US gets out of afghanistan and iraq. 

clp said:

You guys don't seem to realize that the Fiscal Cliff, now only 50 days away, is going to be a bit "disruptive" too.  And will certainly push the country back into Recession, according to the Congressional Budget Office.  The Fiscal Cliff is a massively disruptive set of programs:

"According to Barron's, over 1,000 government programs - including the defense budget and Medicare are in line for "deep, automatic cuts."

In addition, we'll all be paying higher taxes through increased income and payroll taxes, taxes for the new ObamaCare, alternative minimum taxes, and many others.

One way or another, this problem will be solved.  Why not tell your elected representatives that you want much higher gas taxes first, that are indexed to inflation?  Phone numbers, addresses and email links for all your politicians are here.

 

Permalink Reply by Juan Primo on November 11, 2012 at 11:43am

Does a higher gasoline tax make a country more advanced?

Permalink Reply by Juan Primo on November 11, 2012 at 4:00pm

Explain please.

Permalink Reply by Steven Vance on November 11, 2012 at 4:39pm

There are alternatives to gas taxes. You can call it a VMT or mileage tax. You are charged based on how many miles you drive. Some schemes may even distinguish where you drive and charge you differently based on driving in some jurisdictions or certain road types. 

See a discussion here in my recent article about switching national transportation to pedestrian and bicycle promotion. 

Permalink Reply by S on November 11, 2012 at 6:17pm

I think or rather hope the VMT in the more advanced forms you describe will be DOA.  Having different jursidictions charge based on where and how long you drive necessitates that the government have a record of where everyone is driving.  The  government has enough ways of tracking people, I have no faith that a government database with driving records wouldn't be used to also monitor and track people for other purposes (all couched in terms of preventing crime or catching speeders or something similar).  

Also, the VMT seems like it's geared to encourage people to screw the environment.  If you're going to charge people the same amount of regardless of how efficient their car is, why would anyone pay a few thousand more for a hybrid instead of a gas guzzling car?  If you scale the charges based on fuel efficiency, why not just increase gas taxes instead of creating this whole another system to track people's mileage and charge them based on it?

Frankly the VMT seems like a bad idea all around.  It not only discourages people from getting greener, more fuel efficient cars but it also results in a massive intrusion in the privacy of car drivers by setting up a system that allows the government to automatically track and record where each car is going.


Steven Vance said:

There are alternatives to gas taxes. You can call it a VMT or mileage tax. You are charged based on how many miles you drive. Some schemes may even distinguish where you drive and charge you differently based on driving in some jurisdictions or certain road types. 

See a discussion here in my recent article about switching national transportation to pedestrian and bicycle promotion. 

Permalink Reply by Juan Primo on November 11, 2012 at 6:49pm

I don't like the attitude of taxing something just to alter people's behavior.  If you tie a tax to an actual service that the government in relation to it... taxing something to afford government's regulation of it... then I can see it.  The toll roads supposedly maintain the roads.  The new Cook County gun tax raises money to pay for the costs of gun violence.  But if you want to tax it just to get people to buy less of it... that's wrong.

It assumes that the government is wiser, and more responsible with your decisions than you are.  Is your government wiser and more responsible than you are?

Permalink Reply by Doug Haynes on November 12, 2012 at 5:13am

The idea behind the VMT is not to dissuade use but to create a tax system that will tax people accordingly for their road use; not just their fuel consumption.  People who drive super efficient cars do not pay the same road tax as people who drive older cars that use more fuel; those who drive electric cars would pay no road tax.  With the VMT you can also charge people not just by mile but by vehicle class or even weight.  It would cost a vehicle over certain gross weights more to use the same mile of road than a lighter one. 

The mileage reporting systems have already been tested; there were radio ads asking for testers a couple of years ago.  The GPS systems required to track what roads people use are already out there and in use on commercial vehicles for several years now.

Juan Primo said:

I don't like the attitude of taxing something just to alter people's behavior.  If you tie a tax to an actual service that the government in relation to it... taxing something to afford government's regulation of it... then I can see it.  The toll roads supposedly maintain the roads.  The new Cook County gun tax raises money to pay for the costs of gun violence.  But if you want to tax it just to get people to buy less of it... that's wrong.

It assumes that the government is wiser, and more responsible with your decisions than you are.  Is your government wiser and more responsible than you are?

Permalink Reply by Juan Primo on November 12, 2012 at 7:06am

Cook County just enacted another cigarette tax.  I know a lot of chainlinkers equate the evils of driving to the evils of smoking.  One of the intentions of taxing cigarattes is to make them so unaffordable that people will quit.  I know a lot of people who have quit due to the increased costs.  But go into the poor neighborhoods and look who's smoking... the poor residents.  Nicotine is one of the hardest addictions to quit, but legislators keep on adding to the pain of their poorest constitutients - supposedly for their own good.


If you follow the OP's plan, we will increase the pain on all drivers and consumers in order to have her own vision of utopia fulfilled.

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