Is A Gas Tax Hike Coming?

Edward Niedermeyer
by Edward Niedermeyer

Ray LaHood seems to think so. He tells the Dallas-Fort Worth Star-Telegram:

The problem we have is, Congress wants to pass a very robust transportation bill in the neighborhood of $400 billion or $500 billion, and we know the highway trust fund is just deficient in its ability to fund those kinds of projects. The highway trust fund was substantial at one time but now with people driving less, and driving more fuel-efficient cars, it has become deficient. To index the federal fuel tax, that’s something Congress is going to have to decide. As we get into the reauthorization bill, the debate will be how we fund all the things we want to do. You can raise a lot of money with tolling. Another means of funding can be the infrastructural bank. You can sell bonds and set aside money for big projects, multibillion-dollar projects. Another way is (charging a fee to motorists for) vehicle miles traveled. The idea of indexing the taxes that are collected at the gas pump is something I believe Congress will debate. When the gas tax was raised in 1992 or 1993, in the Clinton administration, there was a big debate whether it should be indexed. At that time, they thought there’d be a sufficient amount of money collected. Now we know that isn’t the case. That is one way to keep up with the decline in driving, and more fuel-efficient cars.

LaHood stopped short of explicitly endorsing a gas tax hike, but he said it’s an issue that congress will have to take the lead on. And if it comes to a debate, let’s hope that indexing the gas tax for annual increases wins out. After all, LaHood has made it clear that he favors a pay-per-mile scheme which would require placing GPS tracking devices in all vehicles. Moreover, steady increases in the gas tax would accelerate consumer demand for fuel-efficient vehicles, actually helping automakers reduce their fleet average fuel economy numbers in a more organic fashion that CAFE mandates. The idea of indexing fuel taxes is said to be gaining support among transport policy analysts. In light of the threat posed by pay-per-mile, we’ll call that a good thing.

Edward Niedermeyer
Edward Niedermeyer

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  • Panzerfaust Panzerfaust on Dec 08, 2009

    I can't hear anything from Congress anymore without it always sounding like: 'by god we're going to get this economy to grind to a dead stop if it's the last thing we do.'

  • Superbadd75 Superbadd75 on Dec 08, 2009

    Seriously, right now raising taxes is not the thing to do. On anything. The economy is still not healthy, the unemployment rate is in double digit percentages, and to hit people with a tax they can't afford would just stifle things even further. A lot of people out there that drive vehicles with poor fuel economy only do so because they can't afford to buy something else. Even for people that can afford another vehicle this would pose a problem because higher fuel costs would make it tougher to get out of their SUVs/trucks and into something more efficient. This just isn't a good plan right now.

    • R H R H on Dec 08, 2009

      If you can afford a $3000 beater for commuting (and you legally pay insurance, etc) you can afford a liability only $1500 motorcycle that gets 5x better gas mileage for commuting with yearly insurance at $200'ish (assuming you are willing to get your M-class and you don't need to ferry your kids everywhere and you aren't driving in snow.)

  • RobbyG $100k+...for a Jeep. Are they selling these in fantasy land?Twin turbo V-6 paired to an 8-speed transmission. Yet still only gets 14mpg.Whatever money you think you would save over a V-8 will be spent 2-3x amount fixing these things when they blow up.
  • Alan Well the manufacturers are catching up with stocks. This means shortages of parts is reducing. Stocks are building around the world even Australia and last year had the most vehicles ever sold here.
  • Larry You neglected to mention that the 2024 Atlas has a US Government 5-Star Safety Rating.
  • Alan Why is it that Toyota and Nissan beat their large SUVs (Patrol/300 Series) with an ugly stick and say they are upmarket? Whilst they are beating the vehicles with an ugly stick they reduce the off road ability rather than improve it.As I've stated in previous comments you are far better off waiting for the Patrol to arrive than buy an overpriced vehicle.
  • Alan How many people do you see with a 4x4 running mud tyres? How many people do you see with a 4x4 running massive rims and low profile tyres? How many people have oversize mirrors for towing once in a blue moon? How many 4x4s do you see lifted? How many people care what tyres they run to save fuel? The most comfortable tyres are more or less the most economical.
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