As a consumer, it is usually in my best interest to pay as little as possible for items that I use daily, like gas, so that I can keep more of my hard earned money for the things I truly need - like a Tesla roadster 2.5 (Santa I hope you are reading this). However, today I’m focused on more than my own best interests by arguing for higher pump prices due to an increase in motor fuel tax rates.
Let me explain. In Texas, we pay a state tax on gas of 20 cents per gallon and a variable delivery fee which is typically $15 for a full load delivery, in addition to the federal tax rate of 18.4 cents per gallon. So why would I want to pay more than $38.4 cents per gallon for a gallon of gas? The main reason is that, in spite of appreciation for the Dukes of Hazard, I do not want to drive on dirt roads, careen sideways through tunnels or jump over rivers. According to Precinct 1 Commissioner Richard Morrison, who was quoted in the Fort Bend County Herald, “Our transportation system and our infrastructure in this state are in dire straits. In 2012, we’re going got have zero money for new roads.” All of those potholes on Richmond Avenue have a direct impact on my car maintenance budget, all of that freeway traffic keeps me idle an extra hour per day (minimum), and both items cost transportation companies’ money - costs which they then pass along to consumers with higher costs for everything that moves over the road – goods and transportation services.
If the State of Texas eliminates diversion of motor fuel tax revenue, which shifts money away from its original purpose to fill a budget gap elsewhere, we would pick up an additional $1.5 billion. This is a lot of money and a great first step, but unfortunately, it’s a drop in the bucket when it comes to our deficit. Reduction in costs will only get us so far. Morrison suggests a gradual increase of 2.5 cents per gallon per year for four years to increase the state tax by 10 cents per gallon which will provide a balanced budget…for now.
Long term, the solution might be something totally different that a tax rate by product type and volume. A bi-partisan Congressionally-created committee, the National Surface Transportation Infrastructure Financing Commission, recommended that the U.S. should move away from a gas tax and to a mileage based usage fee by 2020. Their view is a pay by use system is the only way to not only maintain the transportation infrastructure, but to start improving it as our nation continues to grow.
In the end, keeping motor fuel tax rates at the same level indefinitely lowers our tax revenue as vehicles become increasingly fuel efficient, resulting in less tax revenue per mile driven. For all of our strides environmentally, we seem to forget that the introduction of electric vehicles translates to no tax revenue per mile driven, and the increase in alternative fuels usage is combined with varying tax rates and a federal tax break. If we keep taxes steady, if we keep doing what we’ve always done, then we will be lucky to get what we’ve always gotten…. a road worth driving on.
Written on Wednesday, 22 December 2010 09:13 by Administrator
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