A Gas Tax Holiday?

Several proposals have been floated on Capitol Hill that would give Americans a summer gas tax holiday by temporarily eliminating the federal 18.4 cents a gallon tax on fuel.  While the Administration is remaining neutral on the question, I welcome the debate, and think it is a terrific opportunity to have a larger discussion about the gas tax.

As the primary federal funding mechanism for our national highway system, the gas tax is increasingly outdated, inefficient, and unpopular.  When President Eisenhower envisioned our interstate system, he favored a user-pay method of financing its construction and maintenance.  Unfortunately, he was limited by the technologies of his day. 

Now, however, we have exciting new financing mechanisms that are supplementing the gas tax while simultaneously reducing congestion.  Through the broad deployment of high-speed, open road tolling technologies coupled with hundreds of billions of dollars of private sector capital, we can begin eliminating our dependence on a failed gas tax-based transportation model.

It is time for our country to embrace a far more efficient, clean, and technology-based approach to charging for road use.  This new approach will dramatically improve the quality and performance of our transportation systems.  It will also give businesses and families the type of predictable and reliable service levels to which they have become accustomed when making phone calls, running the sink, or turning on the lights.  We can also eliminate Washington’s ability to use our transportation network as its own personal—and political—sandbox. 

The increased efficiency of our system would also reduce our impact on the environment, and cut emissions caused by endless tie-ups and traffic jams.  Few policy ideas have such broad-based, positive impacts for our economy, our budget and our environment, and I am thrilled these ideas are now part of our national discussion.

What do you think?

-Secretary Peters

Comments

[Frank Lyons]

Pleas, NO GAS TAX HOLIDAY! Roads in too many places are in such sorry state presently that a tax increase is more the order of the day. Alas, it's time to examine winfall profits just a bit more closely than perfunctory CEO congressional cameo appearances which to date have served little purpose than give faces to someone the price-gouged public can hate. Government must be returned to the service of it's people rather than the service of corporations. Seriously, what can privatization of any government function gain the citizenry? It simply expands corporate control. Where has the government of, by, and for the people gone? It may be high time to consider energy such a necessity that it not only returns to a regulated state, but perhaps energy in the US should be nationalized: put the Energy Department to work! Restore caps on utility profits (no lessons from Enron, here!).

Then we should tackle the airlines; and while we're at it restore and revitalize America with mass transit programs. Too much for the bloated beauracracy of the Federal government? No, it'd give them a serious sense of purpose---a lot like work! Oh, and in the process, it would give thousands of people around the country work as well, as some rather substantial manufacturing and construction conjoins mas transit projects. We should try it---like a 'Marshall Plan' for the US. It seemed to work in Eurpoe and Japan. We simply have to wrest the control of our government from the energy tyrants. Roosevelt (TR), then Coolidge started it a hundred years ago, but throughout the 20th century the energy giants simply re-shaped themselves. After all, how is Exxon Mobil today so different from Standard Oil of 1900?
It's time for some leadership again!
Thank you.

[Deb]

Why would we want to reinvent the wheel, it works. Raise it if you must, but use it.
I find it very strange that in all these comments, no one is concerned about fuel efficiency. Jim made a comment about ethanol, but ethanol as it is today, corn based, is a joke. Has anyone considered what this would do to the price of food? Corn feeds livestock and is in almost all processed foods! Why not give the farmers another crop to grow that won't compete with our food industry to produce the ethanol. Maybe sugar beets.
Why not MANDATE the manufacturers of our vehicles to produce more fuel efficient vehicles? They have ALWAYS had the technology, they are NOT forced to use it. HELLO CONGRESS! AND WE the consumers buy the gas guzzlers so why should they use it? Follow the money.....who runs this country the politicians or the special interest groups?

[person]

I absolutely agree with Jon Holmberg. We should not be looking to add tolls to existing roads, but to increase the gas tax. Tolls won't change consumer behavior in favor of efficiency. They will make the road system more congested.

[RD]

Look how thoughtful these responses are!!

I have been quite distressed by the idea that extensive "congestion pricing" is the solution to our congestion problems and that we must do some form of "demand management." Keep in mind that the market has an odd kind of intelligence and that, left alone, it is unbelievably ruthless. The fact is that people need transportation to live, and the elitist effect of congestion pricing is the moral equivalent of the statement "let them eat cake." Social engineering like this has to be done very carefully, and no one approach is a panacea. Use of taxes, congestion pricing, incentives, and the rest of these mechanisms has to be done very carefully, and it has to be done with a clear eye to the outcomes to be generated, whether the outcomes are being reached, and the willingness to adjust if they're not. It's hard work. It requires courage. And it has to be done, now, because the old system is breaking down (may already be be broken -- time will tell).

[BeyondDC]

As someone staunchly against the gas tax holiday, I would actually be totally in favor of replacing the gas tax with mandatory tolls on all federal highways, as that is a more direct user fee, and won't be as unpredictable as we transition to fuel sources other than oil.

[Vincent Newton]

I"m hearing a lot about this gas tax holiday. I think it's just a way to get votes.