Gas Tax: My Two Cents

href="http://scienceblogs.com/cortex/2006/10/raise_the_gas_tax.php">Jonah
and href="http://scienceblogs.com/nosenada/2006/10/if_we_did_raise_the_gas_tax_wh.php">Kevin
have already chipping in on this topic.  Bob Lutz, the VP of
General Motors, turned a few heads.  Not with an eye-catching
new auto design, but with a comment in the Wall Street Journal:

"I'd say the best thing the (U.S.) government can do
is to raise the
gas tax by 10 or 15 cents a year until it reaches European levels," Mr.
Lutz said, during an impromptu interview just before GM Europe's media
event last Thursday.
That way, he says, car makers could concentrate on designing for
the U.S. market the kinds of fuel efficient and increasingly luxurious
smaller vehicles that characterize the European market. "In Europe
people buy $30,000 Golfs," Mr. Lutz says. "People are willing to pay
lots of money for extremely well equipped, fuel-efficient cars."

I don't have a subscription, so I can't provide a direct link to the
quote, but a reference to it is href="http://www.edmunds.com/insideline/do/News/articleId=107496">here.
 It turns out this is not a new idea.  A little
poking around the 'net shows that this idea has been under development
for at least two years.

See this in an
article in href="http://www.usatoday.com/money/autos/2004-04-07-hybrids_x.htm">USA
Today, from 2004:

... [Ford Motor Chairman Bill] Ford said he
has long favored both tax breaks and a gas tax to push sales of
fuel-efficient vehicles.



We need to put the customer's pocketbook in the
middle of this debate, as they did in Europe, he said. In Europe, the
largest SUVs are rare and smaller vehicles are the norm because taxes
push gasoline to around $5 a gallon.



Ford also said the government should consider
replacing a tax break for businesses and the self-employed who buy the
biggest SUVs with one aimed at gas-electric hybrids and other
fuel-efficient vehicles...

Also see this, in href="http://www.caranddriver.com/dailyautoinsider/10167/raise-gas-taxes-some-auto-execs-urge.html">Car
and Driver, from 2005:

...One of these executives, Mike Jackson, chief
executive of AutoNation Inc., the country's largest auto retailer,
called for the current federal gas tax of 18 cents per gallon
— which has been unchanged for more than a decade —
to be raised by 10 cents a year.



"You are simply saying to the consumer, this is a permanent fundamental
change in outlook and this is an issue of national security," Jackson
told the WSJ. "For the long term, you have to think more about fuel
efficiency." Jackson said gas prices would have to rise to about $6 a
gallon before U.S. consumers change their behavior and buy more
fuel-efficient vehicles.



To offset the burden the tax would place on the poor, Jackson says
there should also be a yearly energy tax credit for those who earn an
income below a certain level...

There is a fairly comprehensive treatment of the issue of the website,
Resources for the Future, href="http://www.rff.org/rff/News/Coverage/2004/May/Big-3-see-tax-hike-as-fuel-saving-plan.cfm">here.
 They have the following chart, for reference:

I recall that when gas prices shot up, right after the war started,
there was a little chest-thumping from a subset of conservatives.
 They pointed out that liberals had been wanting a higher gas
tax for years, but when the price of gas really started to go up, those
same liberals were upset with the Administration.  



The problem with that argument is fairly obvious, so I won't belabor
the point.  The point for today is this: if the gas tax were
to be increased, where would that money go?  Kevin points out
that the current federal gas tax money goes to the Highway Trust Fund
(HTF), which is fully funded already.  No one is proposing
that the extra money go to enhance the record profits of the big oil
companies, although I suspect they'd find a way to get a slice.
 



I would suggest the following items, for discussion and serious
consideration:

1. Improved and expanded light and heavy rail transportation
2. Improved highway maintenance (although the HTF is said to
   be fully funded, many expressways are in poor condition)
3. Improvements in business routes and other ancillary routes
   that accompany the Interstate system.
4. Improvements in air quality and groundwater quality
5. Research and development into alternative fuels and energy
   sources

There is no shortage of suitable projects.  One additional
item: it would be necessary to try to anticipate how the higher gad tax
would affect jobs, and do something to try to mitigate any potential
job losses.