Wednesday, October 5

Is a Gasoline Tax Regressive?

Until recently, I've been a proponent of an increased gasoline tax. I think it has the potential of altering how Americans use energy, in turn boosting development of fuel-efficient technologies, and decreasing dependence on foreign oil.
Clicking the gas pump icon will take you to the government's gas prices site.

But the more I think about it, the more it seems like a regressive tax, something that would place a disproportionately higher burden on those with lower incomes. If the price of gas goes up, those with the fewest alternatives have no other option but to pay it. I'm beginning to see that the poor have the fewest alternatives. Trading your car for a newer, more fuel-efficient model is, well, costly. Public transportation? Its cost is rising, and will continue to rise as the cost of fuel rises. And a car provides some protection in areas of high crime. If you're walking or on a bicycle, the only thing between you and a person with malicious intent is your skin.

Also, those with the highest incomes (and the greatest influence in society) wouldn't feel a pinch at all. And feeling a pinch is part of the gas tax's strategy for change. Here's where gas rationing could work, but I don't think we're at that point yet.

Still, I think that in the long run and on a large scale, a gas tax is beneficial. So in conjunction, I might offer some kind of subsidy to those who qualify - like gas vouchers, similar to food stamps, or maybe a gas rebate.

Just a thought. What's yours?

2 comments:

Lenny said...

Your post prompted me to take a quick survey of the parking lot where I work. Over half of the vehicles were either SUVs or large pickup trucks and the majority of these owners are lowly wage earners and would be considered white collar. I don’t consider them to be “wealthy” but they are, in this country, middle class. Most of these vehicles are used for commuting and are occupied by one, maybe two, people on a daily basis. Is it really necessary for have a 4+ liter engine and four wheel drive to carry a briefcase, an apple and ham sandwich? Look in suburban mall parking lots and you’ll find an abundance of SUVs used to haul those little plastic bags from the Gap. The reality is that the SUV has become a status symbol of the middle class and its immensity is supposed to represent the great success the owner has achieved. Oil, a increasingly valued resource, is being pissed away in these behemoths just to salved the egos of some self-center, suburban child grown old. Until driving a SUV becomes too expensive people will continue to drive them. Three dollars a gallon won’t stop it. People will get used to paying it. The social cachet gained from owning this dinosaur will only be enhanced since the owner obviously makes soooo much money that social consciousness can be completely ignored while making the roads dangerous for the less fortunate. Increasing the gas tax will reduce the appeal of large trucks since the expense will start to infringe on Mall crap buying. Revenues raised by the gas tax can go to pay for infrastructure improvements and maintenance. Now that money is gotten from federal taxes and property taxes. Haven’t people noticed the rise in property taxes? Where do you think the money comes from to fix the roads? The money raised in the local community by gas taxes can be used to fix the local roads. Is it fair to use your federal tax money for roads in a state where it is just politically advantageous? Money raised from local gas taxes would be spent in the local area. High traffic equals high wear and also high gas use. Is this a regressive tax? Sure, but tax relief could be used for those under a certain income to ease the burden. Would it hurt current SUV owners? Yes, but a tax credit could be allowed for 5 years or so until SUV ownership would decrease by attrition. In the long run a gas tax would be beneficial but the short term minded American would never, ever vote for anyone who suggested such a thing. Politicians care about the next election only so long term solutions are rarely adopted.

Gouda said...

Yes!

I really agree with this:
"Increasing the gas tax will reduce the appeal of large trucks since the expense will start to infringe on Mall crap buying."