Net-Zero Gas Tax

Gas Prices Went Up Again Today by bug138 on Flickr.

A column by Richard G. Lugar, the Republican senator from Indiana, first printed in the Washington Post and reprinted in Monday's Statesman, makes an eerily familiar proposal to implement a gas tax offset by a reduction in the payroll tax (we'll take his word that he got the idea from Charles Krauthammer in the Weekly Standard).

His argument is basically that our addiction to oil exacerbates our foreign policy problems, but the costs resulting from those problems are not included in the price of gas. Therefore the government should impose a targeted tax to correct the market failure, which would be offset by a reduction in an existing tax to avoid a net tax increase. This would increase the price of gas, extending the benefits of last year's surge in gas prices, while avoiding the costs of that price surge.

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By Shawn Shillington on February 3, 2009 11:16 AM 0 Comments

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causal observer

The poor are already screwed in this country. A payroll tax offset is not going to compensate for that. And nothing is stopping gas from going to $5.00 a gallon anyway; we saw it approaching that last summer. What I do think raising gasoline to $5.00 a gallon would accomplish, however, is to get a lot of the middle class angry. If you make a middle class wage and live in a small town with no public transit, you have to depend on your car to get anywhere. When filling up the tank eats away at a middle class paycheck, the middle classes start demanding alternatives: public transportation, renewable fuels, bike lanes, etc.

mdahmus

Lord Stompo, that's why the payroll tax offset is included. Poor people pay a hell of a lot in payroll taxes, which, despite fiction to the contrary, are really just a flat-to-regressive separate income tax system.

Lord Stompo

That's if the promised offset actually happens and if it's enough to compensate for the spike in gas prices. Two rather large ifs.

agbasinger

I have to agree that too many if's are involved. This looks like another tax scheme on an already over-burdened tax system.

Lord Stompo

It sounds like a good idea, but cranking up the gas tax will really screw the poor. Think about it. If you make minimum wage, and you live in a small town with no public transit, then you have to depend on your car to get anywhere. What are you going to do when filling up your gas tank eats your whole paycheck?

mdahmus

It would be nice if we could get that done. Unfortunately, we live in a universe where the debate has been polluted with truthiness like "the gas tax gets diverted to XXX", when the reality is that the gas tax (in Texas) only covers a small fraction of roadway costs, even if you weren't 'diverting' some of it to schools (the only place the state constitution allows it to be spent other than on the state highway system itself).

People who didn't fight hard enough against the misrepresentations of folks like the anti-tollers are part of the problem, not the solution. It's now basically common 'wisdom' that the gas tax is set at the right level and we didn't need tolls to fill in the gaps. Oops.

causal observer

So.... when a Republican suggests it, it's ok then? Because some Democrats and non-partisans have been suggesting this for quite some time, to the cries of OMGSOCIALISM!

don't get me wrong - I'm all for raising the price of gas to $5.00 a gallon or more.

We could also help the situation by ending government subsidies to Exxon-Mobil (record profits again! woo hoo!!) and other oil companies, and instead use subsidy money to put a stable price on commodities in Wind and Solar and Etc. renewables. But, you know.... taxpayer subsidies to private companies making record profits = sound business model. Taxpayer subsidies to make renewable energy competitive = OMGSOCIALISM.