Should we abolish federal gasoline excise tax?

[politicallefty]

Since 1993, the federal gasoline tax has been only 18.4 cents per gallon. I'd leave that as it is and instead target the oil/gas companies.

[traininthedistance]

Since 1993, the federal gasoline tax has been only 18.4 cents per gallon. I'd leave that as it is and instead target the oil/gas companies.

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

The fact that the federal gas tax has not kept pace with either a) inflation, or b) new road/bridge/transit construction, or c) the accelerating repair needs of facilities that have reached the end of their useful and/or safe lifetime, and must be rehabbed or replaced, would all be reasons I think to make an increase even more urgent.  And this holds even if you thought 18.4 cents/gallon was adequate in 1993 (which I consider obviously untrue, but will grant for the sake of argument).

Furthermore, I have little idea what you mean by "targeting the oil/gas companies" and how it's supposed to be an adequate an/or sufficiently different substitute- and this may sound harsh but I suspect that you don't either.

[bedstuy]

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. 

[traininthedistance]

It should be significantly increased.

I used to think this way... but it is so regressive that it will really only hurt the rural poor while building shiny new freeways and trains for urbanites.

Instead, we should keep increasing fuel efficiency standards.

Raising the gas tax today is about changing behavior from personal transport to mass transit.  And while mass transit is important in cities because of its efficiency... we can't soak the rural poors.  Especially when the future is clearly not everyone taking trains... but self driving cars that ultimately will be incredibly efficient compared to today's cars.

And because self driving cars are safer and responsive, you can fit more cars on any given stretch of road.  Increased traffic capacity without increasing the footprint of freeways in cities will make cities denser without mass transit.

Ohhhhh, geez... where to begin, where to begin.  So much straw and confusion here, I could spend hours responding.  I'll try to keep it relatively short and to the point.

1) First and foremost, you need to get it right the f*** out of your head that the gas tax is all about "building shiny new freeways and trains for urbanites".  On a per-capita basis, urban areas tend to get short shrift when it comes to these funding decisions, as evidenced by this analysis of stimulus projects from back in 2009:

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2) It's also not just about "changing behavior from personal transport to mass transit."  (As an aside, which is it?  Changing behavior or building shiny freeways?  You can't seem to make up your mind from one paragraph to the next. )  I mean, yes, incentivizing mode shift is part of the story.  And it's a part that is deeply worthwhile, for reasons mostly beyond the scope of this rebuttal.  But it's only one part of the story, and it's irresponsible of you to forget about all the other reasons.  In particular (I will set aside the issue of gasoline's externalities for now, even though they are obvious and massive), what you seem to be forgetting is the issue of maintenance and upkeep- namely, that we have some thousands of bridges in this country that need to be replaced (lest there be more I-35s), roads constantly need to be resurfaced, trains need tie and signal replacement, tunnels need pumphouses. etc etc etc.  A lot of our transportation infrastructure is old and falling apart.  Even if don't want to be building any more highways or trains or buses or anything new, which is obviously a silly blanket statement to make though I will gladly say that the suburbs and exurbs probably could stand to have a moratorium on new road construction for a couple decades, the fact remains that our current level of taxation is woefully inadequate to even just keep things in a state of good repair.

3) I also just happen to love how everyone is so concerned about soaking the rural poors, and how they seem to come up all the time when this particular issue is raised and so rarely otherwise.  (I guess they come up a little more often on Atlas, but out in the wider world it is a different story.)  And, of course, nary a mention is ever given to how current levels of taxation and funding have the effect of soaking the urban poors (who are, as always, invisible in these discussions).  

And, this next bit is not directed specifically at you, but you need to understand who and what you're making common cause with here:  It's just lovely how exurbanites who live fundamentally metropolitan existences but want to pretend otherwise will defend their wasteful, harmful, and unnecessary decisions by wrapping themselves in that particular unearned rhetorical blanket.

Look, I agree that there are some legitimate distributional questions to be had, and I've said time and again that feebates and credits should be on the table.  But it's not acceptable to hold the nation's cities and surrounding metropolitan areas hostage to crumbling infrastructure and a pattern of existence that has been proven to be harmful on so many fronts.  And to dismiss an increase in the gas tax out-of-hand without engaging with the whole basket of reasons why it's a good idea, or engaging with ways to mitigate any genuinely negative effects it might have (and I do not count "disincentivizing exurbia" as a negative effect, sorry), is just not particularly honest.

4) As for self-driving cars... I'll only say that while I do hold out hope that they can improve the situation on the ground in some ways... I don't put much stock in any line of thinking that claims technology will magically solve societal problems with no effort on our end.  It's a cop-out, and it ignores the ways in which responsive organization and policy are still of paramount importance.  I mean, for instance, there is still no guarantee that some combination of fearmongering (mostly illegitimate but I can imagine a good privacy argument) and protectionism (from, say, car dealers and taxi drivers) won't kill self-driving cars in the crib and prevent their adoption entirely.  And, even if we do get those self-driving cars, there's no guarantee that our political institutions and culture will take advantage of the benefits they provide by, say, cutting down the insane levels of mandatory parking that pockmark our developed areas.  Technology is great, but it can't and shouldn't be an excuse to avoid the policy heavy lifiting- otherwise its potential is wasted at best.

[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).

[bedstuy]

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?

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.

[traininthedistance]

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).

The fact that the gas tax is both a user fee as well as an externality-offsetting Pigouvian tax, is kind of the best thing about it.

The problem with a VMT is that there are privacy issues in its collection, and that it is insensitive to fuel economy.  I consider that a bug, not a feature.

As for its regressivity... it is an issue, but it's not nearly as regressive as most sales and excise taxes due to the large and growing numbers of people (mostly low-income and elderly) who do not drive or drive only rarely.  As long as it is embedded in an overall tax code which strives to be as progressive as possible in other areas, and/or if it's paired with a feebate or credit system, I fail to see the problem.  The important thing is whether the tax code as a whole has a progressive or regressive effect, not just one particular slice of it.

[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.

[bedstuy]

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.

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

I guess my overarching response to that is, people can always change their behavior.  Drive less, carpool to work, take public transit, move closer to your job, etc.  Economic sectors that require a large use of gasoline can also charge higher prices and pass on the cost.  Some people can't change their behavior, sure, but that's how the cookie crumbles.  There are always winners and losers.  Today, we have people who are suffering from the current overuse of cars in our transit mix. 

[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.

[bedstuy]

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.

If people are buying a Tesla, it isn't because of the economic pressure of gas prices.  It's a luxury good.  And, if you're finding ways to make your lifestyle more environmentally friendly, you're not being a scofflaw.  You're doing something that helps everyone.  I don't see the problem there, we want people to drive more environmentally friendly cars. 

[politicallefty]

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

The fact that the federal gas tax has not kept pace with either a) inflation, or b) new road/bridge/transit construction, or c) the accelerating repair needs of facilities that have reached the end of their useful and/or safe lifetime, and must be rehabbed or replaced, would all be reasons I think to make an increase even more urgent.  And this holds even if you thought 18.4 cents/gallon was adequate in 1993 (which I consider obviously untrue, but will grant for the sake of argument).

Furthermore, I have little idea what you mean by "targeting the oil/gas companies" and how it's supposed to be an adequate an/or sufficiently different substitute- and this may sound harsh but I suspect that you don't either.

I was merely stating a fact, namely that the federal gasoline tax is quite low. Abolishing it really would not accomplish much in terms of savings for the average person. It'd only take away from the already low and diminishing highway fund. However, I'd be hesitant to raise it, as it is a quite regressive tax that targets the low and middle classes.

As far as raising revenue goes, I'd rather put the burden on the oil and gas companies. That would include eliminating their tax breaks and subjecting them to significant taxation, which would ideally be an excess profits tax.

[True Federalist (진정한 연방 주의자)]

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

The fact that the federal gas tax has not kept pace with either a) inflation, or b) new road/bridge/transit construction, or c) the accelerating repair needs of facilities that have reached the end of their useful and/or safe lifetime, and must be rehabbed or replaced, would all be reasons I think to make an increase even more urgent.  And this holds even if you thought 18.4 cents/gallon was adequate in 1993 (which I consider obviously untrue, but will grant for the sake of argument).

Furthermore, I have little idea what you mean by "targeting the oil/gas companies" and how it's supposed to be an adequate an/or sufficiently different substitute- and this may sound harsh but I suspect that you don't either.

I was merely stating a fact, namely that the federal gasoline tax is quite low. Abolishing it really would not accomplish much in terms of savings for the average person. It'd only take away from the already low and diminishing highway fund. However, I'd be hesitant to raise it, as it is a quite regressive tax that targets the low and middle classes.

As far as raising revenue goes, I'd rather put the burden on the oil and gas companies. That would include eliminating their tax breaks and subjecting them to significant taxation, which would ideally be an excess profits tax.

But unless you control the prices they can charge, they'll simply pass the tax on to their consumers.  So it won't really affect the companies.  Price controls are generally^* an awful idea unless you want to make a product less available.  The same is true with an "excess" profits tax, however it is structured.

^* The only exception I know of to the awfulness of price controls are those that keep prices of essential goods and services from being jacked up during a crisis that temporarily increases demand and/or limits supplies.

[Repub242]

I believe we should abolish the gasoline excise tax.

[Del Tachi]

I believe we should abolish the gasoline excise tax.

That's unfortunate.

How do we pay for infrastructure then?

[Franzl]

I believe we should abolish the gasoline excise tax.

That's unfortunate.

How do we pay for infrastructure then?

You set up a donation booth at interstate exits.

Hope I was able to help.