Time to Raise Gas Taxes? You Betcha!
Later this month, a federal commission overseeing financing of highway construction will recommend a 50 percent increase in the national gas tax, adding a dime to the 18.4 cents-a-gallon levy on regular gas and 12 to 15 cents to the 24.4 cent tax on diesel.
I know it's heresy to recommend raising taxes in a recession. It's usually the last thing you want to do. But with gas down from $4 a gallon last summer to $1.70 or so today, with the money badly needed for highway repairs and with Americans still accustomed to higher prices and conservation, there's never been a better time.
It's true that the drop in gas prices has been the one bright spot in the economy. It helped mitigate the pain of the recession by providing a boost in disposable income just when it was needed most. But taking back a dime of it won't hurt that much. Many of us could probably quite easily find a station near us that charges 10 cents less than what we usually pay. A good argument can be made for a much bigger increase, but a dime is a start that would help crack the psychological barrier. A bigger hike can come when the economy is in recovery, which Kiplinger forecasters expect sometime in the second half of this year.
The aim of a gas tax isn't just to bring in revenue, though we sure need that. It's also to influence driving habits. As Howard Gleckman points out in his taxvox blog, when gas hit $4 a gallon, it got drivers' attention. They cut back sharply, taking fewer trips and relying more on public transit when they could. They also stopped buying gas guzzlers and tried to dump those they had, although few could find buyers for them. Now that gas is cheap again, the trend has reversed, and we're headed back to the driving levels of a year ago. Tom Friedman, who favors a much bigger gas tax, reports that in December, more Americans bought trucks and SUVs than automobiles.
I know a lot of people think the government has no business trying to shape driving habits. But let's face it. That's exactly the business the government is in -- and it's about to get far more deeply into it as it bails out U.S. automakers. It just makes no sense to force Detroit to make small, fuel efficient and hybrid cars if no one wants to buy them. That's throwing taxpayer money down the drain. And investing heavily in research into alternative energy, as President-elect Obama plans to do, makes no sense if we're not going to try to curb gasoline consumption. And yes, there's also the not-so-small fact that our national security is closely tied to our reliance on foreign sources of oil.
The 10-cent increase proposed by the federal panel, the National Commission on Surface Transportation Infrastructure Financing, is a really tiny step. But it's a start in the right direction. If history is a guide, it will be ignored. Obama is not likely to waste political capital on an unpopular proposal that will likely run into stiff Republican opposition. But what's political capital good for if it's not going to be used to make coherent policy. If we're not serious about using less oil, then we ought to drill everywhere we can for it. If we are serious, let's put together an energy policy that is consistent and makes some overall sense.