Posted on 07/14/2019 12:23:23 PM PDT by Tolerance Sucks Rocks
In this Policy Tip Sheet, Matthew Glans examines gasoline taxes, how they have become less effective over time, and why states can no longer rely on them to fund state transportation projects.
Problem
Gasoline taxes are an unreliable funding source for state transportation projects, road construction, and maintenance due to declining gasoline prices and more fuel-efficient vehicles. In 2015, Daniel Vock, writing for Governing, analyzed state gas tax data reported to the U.S. Census Bureau and found two-thirds of state fuel taxes failed to keep up with inflation.
Moreover, gasoline taxes are regressive and produce widespread economic consequences. Increasing fuel taxes leads to higher prices on goods and services throughout the economy. These additional costs are inevitably passed on to consumers, with an especially negative impact on lower- and middle-income families.
In a Maryland Public Policy Institute study, Wendell Cox and Ronald Utt argue gas taxes have a significantly greater detrimental effect on lower- and middle-income families than they do on the wealthy. Americans for Prosperity estimates lower gas prices amount to approximately $100 in additional spendable income per month for an average family.
The main reason for inadequate transportation funding is not lack of revenue. Actually, far too many dollars are spent on projects unrelated to roads, such as rail, bike paths, and museums.
Policy Solution
Profligate spending is an issue that has long plagued transportation funding. Bloat, inflated labor costs, and unneeded bureaucracy often increase the budgets of new infrastructure projects far above initial estimates.
(Excerpt) Read more at heartland.org ...
PING.
found two-thirds of state fuel taxes failed to keep up with inflation.
It doesn’t have to be a “long-term solution.”
It only has to be a solution to winning the next election for the incumbent party.
The main reason for inadequate transportation funding is not lack of revenue. Actually, far too many dollars are spent on projects unrelated to roads, such as rail, bike paths, and museums.
Moreover, gasoline taxes are regressive ...
*********
Gas taxes are really a user fee. They are ONE way of ensuring that the actual users of a service pay for it, just like the users of UPS pay a price for uding that service. They are no more regressive than the single price a user of UPS pays. (Should we charge the rich man a higher price for, say, food, than the poor man?) If there are some people who need to use the roads even though they can’t pay for gas, the government can give then gasoline credit cards.
but electric cars pay zero
1. “Gasoline taxes are an unreliable funding source for state transportation projects, road construction, and maintenance due to declining gasoline prices and more fuel-efficient vehicles.”
B.S. The intent of the user fees known as fuel taxes is to obtain from the road users a certain revenue based on road usage, and fuel usage is used as an average stand-in for road usage. It is accepted that due to differences in miles per gallon it overstates road usage for some and understates it for others, but all fees based on averages do that. There is nothing inherently bad or not “Conservative” about such user fees or how they are arranged. The problem is then NOT the fees, but the fact that they have not been adjusted for what has been happening with average fuel consumption per mile driven. Higher fuel efficiency means the same fee, on a cents per gallon basis, is not collecting as much fuel tax per average mile driven as it did before.
It would not be against Conservative principles to adjust fuel taxes based on improvements in fuel efficiency. Doing so would not change the average fuel tax paid for the average driver. What has been happening is the average driver is paying less annually in fuel taxes - nationally, in general, due to greater fuel efficiency requiring less fuel consumption - on average. The fuel taxes can be fixed to adjust them for greater average fuel consumption - when there is in fact greater average fuel consumption.
2.”Moreover, gasoline taxes are regressive and produce widespread economic consequences. Increasing fuel taxes leads to higher prices on goods and services throughout the economy. These additional costs are inevitably passed on to consumers, with an especially negative impact on lower- and middle-income families.”
MORE B.S. Any replacement of the fuel tax will simply change the means by which people and the economy will have revenue for roads extracted from them, not that they will no longer be financing the roads through some mechanism that extracts that cost from them.
3. “The main reason for inadequate transportation funding is not lack of revenue. Actually, far too many dollars are spent on projects unrelated to roads, such as rail, bike paths, and museums. “
The hypocrites then admit it is NOT inadequate funding or lack of revenue that is the problem (if true then why blame the fuel tax in the 1st place) but how dollars collected from fuel taxes are spent (on what??) and how much waste and corruption is involved when they are spent on roads.
After raising the false old bugaboo about fuel taxes they go on to make some sensible policy proposals.
Governor Wolf (PA) is trying to get approval from PA Congress for a roads tax on electric vehicles of $1200.00 a year. That would reduce the EV savings...
All he needs to do is get the State Police properly funded, since half of our high our high fuel taxes apparently are secretly funding those same State Police.
Roads and Schools are the cash cows for liberals to extort money form the public to fill their pockets and pet projects.
The author lost me in the intro. Gas taxes, to my understanding, are not percentages. They are specific costs per gallon.
Therefore, the assertion that declining gas prices affect the government cut are seriously fouled up.
I wonder if private highways for the long haul truckers would be an idea worth discussing. It would be interesting to see how a such a highway system, built and paid for by the trucking companies and others who would use it, would likely that better run and maintained than the government’s roads.
Not a dime is being for funding transportation.
It is for the fat gov’t pensions that we peons pay for them.
“The author lost me in the intro. Gas taxes, to my understanding, are not percentages.”
Same here. If the guy is that CLUELESS how is he even getting published?
Problem #1 ...
A fuel tax is not a true user fee, but it's a reasonable surrogate for one. It's allocated to the user in a way that is roughly proportional to a motorist's use of roads overall but not to any one road at any one time (an important distinction that will be seen in #2 below). A toll is a true user fee that is allocated to the user in a way that much more accurately reflects the motorist's use of specific roads at specific times. Tolls had historically lost a lot of their appeal because the cost of collecting them diminishes the actual revenue being raised, but they are starting to get more attention now because the technology for electronic tolling at highway speeds has matured.
Problem #2 ...
The problem with a "gas tax as a surrogate user fee" approach is that the taxes are paid without any regard for the actual use of specific roads at specific times. In other words, the tax is paid up front and then the motorist drives when or where he pleases afterward. This may not have been a big deal when the U.S. was constructing highways all over the place, but the obvious flaw can be seen in the growing traffic congestion on our roads. Our system of fuel taxes is comparable to a supermarket that doesn't charge for individual items, but charges each customer a flat monthly fee on the first day of the month and then allows all the customers to take whatever they want from the shelves for the rest of the month.
Because this arrangement eliminates the direct allocation of costs for each item in the supermarket, the business model is doomed to fail for two reasons: (A) the customer has already paid up front, he has a huge incentive to empty the store every time he walks in the door even if he doesn't need 99% of what he buys; and (B) since the supermarket has already collected the money up front, it has no incentive to provide any kind of quality in the products or the shopping experience. And the supermarket has to keep raising the monthly fee to cover for the excessive drain on its inventory. The end result is a dirty, overcrowded, overpriced supermarket filled with crappy products on the shelves. That's sounds an awful lot like our nation's highway system, doesn't it?
I'll cut the author some slack, since I understand there are a number of states where the state sales tax is applied to fuel sales. So in those states, some of those revenues DO rise and fall with the price of fuel.
The supermarket analogy is not a good one.
The toll theory sounds fine but it lost favor because it is not practical in a universal sense - a means applied to travel on all roads at all times. I don’t even think there is now in all cases rock solid restriction of toll revenues to the maintenance of just the road the toll is collected on.
The theory applied universally would mean you’d start paying a toll, or series of tolls (collected by different collecting agents/agencies) as soon as you left your own property. But we do not even apply user fees universally - for all roads. Within states and outside of the Interstate and State designated highways. roads, whether local or county designated roads, are paid by a mixture of state fuel taxes, state, county and local general revenues.
So, if there is an argument for toll roads over fuel taxes, it could only be applied at this time to roads that are Interstate highways, U.S. highways, and major state highways for which fuel taxes, federal and state, supply the bulk of the revenue. I also do not think THAT would be seen as practical to all cases it would have to be applied to, and any benefit would be offset by the costs of running any toll collection systems.
THE real biggest problem is the combination of (a) not all fuel tax revenue is restricted to supporting roads and nothing else, (b) politics and corruption in the setting of road priorities in the states, (c) waste and corruption in the performance of the contracts for road building and maintenance. Arguments about the fuel tax are a diversion from the real problems, all of which would continue to plague the use of the revenue no matter how it was obtained.
“I understand there are a number of states where the state sales tax is applied to fuel sales.”
True, but the one state that I’m familiar with that applies sales tax, California, also applies per gallon taxes, and not a penny of the sales taxes are used for highways.
I suspect the other states are the same.
Therefore, the guy is an idiot.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.