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Raising the Gas Tax Would Lower U.S. Economic Vulnerability
Posted on Friday February 25th by Eric Jaffe
The last time we checked on Ryan Avent, he was making a powerful argument for high-speed rail in the United States. Earlier this week, over at the Economist, Avent made an equally strong case for raising the gas tax:
The current rate no longer brings in enough money to cover current highway spending. Petrol taxes are an efficient way to raise revenue, and the government needs revenue; President Obama’s deficit commission recommended an increase in the federal petrol tax rate. Burning oil produces carbon emissions, and dearer fuel would reduce America’s sky-high per capita carbon footprint. But a higher tax rate would also diminish the possibility that a sudden rise in oil prices would throw the economy into recession. … But those prices are rising anyway; better to capture the revenue and use it, all while improving behaviour.
Few people listened when the deficit commission suggested raising the gas tax 15 cents by 2015. But if Congress is to authorize a transportation program anywhere near President Obama’s $556 billion budget request, the money will have to come from somewhere. Even the Chamber of Commerce and the American Federation of Labor-Congress of Industrial Organizations, in what the New York Times described as a “rare joint show of support,” think a higher gas tax could be good for the country:
[AFL-CIO President Richard] Trumka and [Chamber of Commerce President Tom] Donohue even said legislators should consider the politically toxic option of raising the gas tax, which was not indexed to inflation and has not been touched since 1993.
“Seventeen years is a long time and the states have stepped up,” Donohue said, referring to states that have raised their own gas taxes. He added that even truckers were in favor of an increase on the diesel tax if it meant more money went to repairing roads and bridges.
Business Insider proposed the intriguing scenario of pegging gas prices at $5 after 2015:
Whatever gas would cost on the open market (benchmarked to the price of oil), the tax would make up the difference between that and $5. If the market price for gas went over $5, the tax would disappear.
With the price of oil now cracking the $100 a barrel threshold, $5 a gallon doesn’t seem so far off.
The arguments against raising the gas tax are getting harder to make, but no doubt politicians will keep trying. They always do.
infrastructurist.com |
