Suspend federal gasoline tax?
Lab Lemming’s back-of-the-envelope calculation of the effect of a carbon tax on fuel got me thinking about the general issue of taxing transportation fuel.
If you live in the United States, you’ve probably heard some discussion about suspending the federal gasoline tax (18.4 cents/gallon) to help alleviate a slumping economy. The New York Times has an article about it today, which you can read here. The article is mostly about the issue within the context of the two remaining Democratic presidential candidates, Obama and Clinton.
I’m not going to talk about the Democratic race because I think it’s boring. The 24-hour news channels are having so much fun parsing every. single. word. they. say. They’re more interested in “gotcha” journalism and meaningless fluff. I neither have the time nor the brain cells to waste on it. Wake me up after the convention. If anything will be the demise of modern democracy it’ll be mainstream tabloids media, but I digress.
Anyway … back to the federal gasoline tax. It’s original purpose was to provide revenue for highway construction and improvements. It appears to have expanded and become a bit more complex since then, but still meant to be for our public transportation system (which in the U.S. is mostly about roads).
I’m mostly posting to see what you all think. I’m not an economist, I’m not sure what the effects, positive or negative would be. Truckers are definitely hurting with higher fuel prices*. Perhaps suspending the tax, either partially or in full, for commercial truckers but not for regular drivers could work? I’ve said several times in the past that I think the higher fuel prices are good for Americans in the long term. I really think we need a wake-up call regarding our energy usage. But, that’s me … we don’t drive that much, and we have a car with good gas mileage. In other words, I would rather see the tax used for what it was designed for.
* Yes, I know the price of gas in the U.S. still isn’t nearly as much as it is in Europe or other countries … it seems it’s more about the rate of increase that can really wreak havoc.