November 23, 2012
TAX WHAT YOU DON'T WANT:
Higher Gas-Tax Idea Joins Fiscal-Cliff Talks (JOSH MITCHELL, 11/23/12, WSJ)
The federal gas tax was last raised in 1993 and 1990, each time as part of a deficit-reduction plan. After failing for years to overcome public opposition, supporters of another increase see the current talks as a once-in-a-generation chance to raise the tax, which finances highway and transit construction.The U.S. government spends roughly $52 billion a year on highway and transit projects, but the gasoline tax is generating only about $37 billion annually. That has created a roughly $15 billion annual shortfall that Congress has filled in recent years by taking money from the government's general fund, adding to the budget deficit. Transportation experts say that without a permanent fix, the shortfall will widen with declines in gasoline consumption as Americans drive more fuel-efficient autos and use other means of transportation."Anybody in the transportation community's been talking about a need to raise the fuel tax for many years now," said Bill Graves, head of the American Trucking Associations, which represents truckers. "No one [in Congress] wants to publicly acknowledge it, no one wants to publicly go there. But privately they all they get it."The gas-tax revenue is distributed to states to finance transportation projects, such as repaving highways and building new subway stations. Business groups supporting an increase say these projects create jobs, reduce traffic congestion and speed the transport of workers and goods, helping the economy.The 2010 Simpson-Bowles deficit-reduction commission proposed raising the gas tax as part of a broad deficit-reduction plan.
It's especially important to be able to raise the consumption tax as the price falls.
Posted by Orrin Judd at November 23, 2012 4:30 AM
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