Should we abolish federal gasoline excise tax?

[AggregateDemand]

Should we abolish federal gasoline excise tax and give states more control over their transportation infrastructure?

http://reason.com/archives/2014/03/22/death-to-the-federal-gas-tax

Local control of policy is often appealing, but I wonder if the states will pursue national security objectives by developing road systems that can be used for national evacuation and troop movement. Perhaps the point is moot since the federal government is not securing national transportation.

[AggregateDemand]

Support. I've never understood why we have taxes that fund singular programs - seems inefficient. How hard would it be to fund transportation infrastructure out of general tax revenue (income, corporate, etc)? Besides that, regressive taxes of all sorts cause unnecessary financial strain on the lower class, which is economically destructive.

It is tax inefficient. Excise tax is supposed to offset the marginal cost of regulation, hence the per unit tax, not ad valorem. But political economics theory says that Congress will pass what the people will allow. At the time, rich people did most of the driving, and gasoline excise tax was an easy win.

[AggregateDemand]

We should abolish the national gasoline tax and replace it with a vehicular mileage tax (VMT), where drivers are taxed based on the number of new miles they put on their personal vehicles every year.

How does this encourage fuel efficiency or alternative fuels? VMT discourages driving, which could destabilize our economy.

[AggregateDemand]

The point of a VMT is not to encourage better fuel efficiency or alternative fuels.  Gasoline taxes already do that.  A VMT ensures that funding for national infrastructure projects is not negatively impacted by increased fuel economy.

So you believe we should pay for our roads with usage taxes, as if our roads were owned and administrated by private companies? Actually, it's not even as good as a private road arrangement because taxpayers have no guarantee that their tax revenue will maintain the roads they use.

VMT solves a critical funding issue, if you believe roads should be paid for with a separate revenue base, but VMT dies in committee for a reason.

[AggregateDemand]

As a theoretical matter, gas taxes ought to represent the negative externality of driving in terms of congestion, pollution, road maintenance, etc.  Thus, I would favor a major increase and indexing the tax to inflation.  That only seems fair and economically efficient.

Fuel economy standards and mileage taxes are far less efficient ways to achieve the same thing as a fuel tax.  If people are worried about the distributional impact on poor people, there are plenty of ways to deal with that by compensating with governmental spending. 

The world will only be fixed when you permanently trap people the people who lack economic means in a cycle of perpetual regressive taxation.

You're a Democrat? Who could have known?

[AggregateDemand]

This is one of the most confused- and confusing- things I've read on here in some time.

There is an important question we should consider: Do we want gasoline excise tax, a system suited for offsetting regulatory costs or offsetting negative externalities, to fund our public roads?

Excise doesn't adjust for inflation, unlike ad valorem taxes. Excise tax doesn't adjust as fuel economy rises, unlike a VMT. Gasoline excise is generally regressive as a proportion of income, unlike general income tax revenue (in theory).

[AggregateDemand]

What is the cycle of taxation?  We're always going to have taxes and poor people are always going to have less money than rich people.  I don't see how to fix that.  But, people need to pay for the resources they use.  That leads to efficient use of scarce resources. 

And, if you think the cause of economic inequality is the cost of gasoline, you're in fantasy land.  Western Europe has less economic inequality and gas prices double those in the US.

True, but gasoline excise tax has a way of hammering-down the people who cannot afford new fuel efficient vehicles or those who cannot drive fuel-efficient vehicles.

The middle classes and upper classes can buy new Prii and Teslas. They will escape taxation. The lower-middle class, the young student classes, and the fixed income elderly do not have the means to purchase new vehicles, and the supply of fuel efficient used vehicles will probably not be sufficient. Same problem we had in 2006-2008. The lower classes and the elderly will be stuck in a cycle of regressive taxation, similar to the regressive tax system imposed by the welfare state.

[AggregateDemand]

First of all, nobody is saving money by buying a Tesla. 

Never claimed they could save money. I said they could escape taxation, which is the behavioral premise of the gasoline excise tax regime you support.

Many people are hurt by the current pollution arrangement.....many of them poor. Taking away their economic opportunity and gifting them less suffering is not much of an achievement. Society can do much better.