Some Thoughts on Your Gas Tax Comments

Thank you so much for contributing your comments to the Fast Lane.  The site’s been visited more than 31,000 times, and it’s been an exciting first week!  I am happy the Fast Lane is fulfilling its mission as an on-line community where we can communicate with you in new ways.  To that end, I want to respond to a few of the comments you made regarding my post on the gas tax.   

Audrey said she “believe[s] we need to invest in commute options outside of driving solo, such as transit, carpooling, vanpooling and other transportation demand management efforts to maximize the overall system performance.” And H. Bartling wrote “The main question to ask with regard to congestion pricing is where the revenues are spent…In the places where it has been successful, the revenues are spent on mass transit and emissions offsets….”

I agree a diverse investment strategy is likely to significantly improve our ability to address congestion.  But too often, politics, not good policy drives the decisions made in Washington.  We at the Department are trying to change that.

That’s why our urban partnership and congestion reduction agreements with cities across the country place an emphasis on effective, systematic solutions, as opposed to funding a series of stand-alone projects.  Such a system was in the works for New York City, where Mayor Bloomberg’s ambitious pricing plan would have generated $500 million a year for transit.  We were obviously disappointed the New York State Legislature did not give Mayor Bloomberg the authority to go ahead with his proposal, as we were ready to support it with federal dollars.  There is no question we need a new metropolitan mobility model—one that integrates high technology road pricing and effective transit.

Zane Royal wrote: “….I see you guys handing out money for this and that quite often. Where does that money come from? We have the most complex infrastructure in the world, but in need of improvement and repair. Can we afford to have a loss of revenue [from repeal of the gas tax]?”  The gas tax was originally intended to be a form of highway use tax.  Unfortunately, due to the growing influence of special interests, gas tax revenues have increasingly been converted into a political slush fund.  When the gas tax was instituted, it was only done so because more direct charging mechanisms were not administratively or technologically feasible. 

If we paid for phone service and electricity through indirect taxes, we would sit around for hours waiting for a dial tone and be reading by candlelight.  The real policy question is how to best charge users to ensure sufficient capacity when we need it.  The objective should be to develop an economic model that charges users the true cost of travel.

Thank you all again for contributing to the Fast Lane.  We’ve got more exciting things on tap, and National Transportation Week is right around the corner!

-Secretary Peters

Comments

[Charles Lambert]

We also need to ask ourselves hard questions about alternatives to tax supported roadways, such as user fees (a'la Oregon's plan) and better ways to finance public transporation. You've only got to take a train in Eurpoe to know we've badly missed the boat in this country and need to do better...soon.

[Aaron Jette]

Secretary Peters,

Thanks for creating this excellent forum. I've enjoyed reading all the posts. I agree with you that the gas tax is an outmoded way of financing our transportation system and that private financing and congestion pricing among other methods represent excellent opportunities. That said, given the negative externalities of gasoline consumption - toxic air pollution, energy dependence, climate change - a gas tax is an excellent "Pigouvian Tax" encouraging consumers to reduce their gasoline usage and achieve the goals of this Administration.

[Wesley H Carter]

The problem with gas taxes stem from the fact that you not only pay federal taxes. The state taxes gas along with the city and county. Then you have the problem that companies probably would not lower the price if you repealed the tax and put the extra money in their pocket.

[m]

Secretary Peters,

You wrote that "The gas tax was originally intended to be a form of highway use tax. Unfortunately, due to the growing influence of special interests, gas tax revenues have increasingly been converted into a political slush fund."

What you are saying here is that the fuel tax is being misappropriated. There is no doubt that you are correct, and this issue should absolutely be addressed. Funds from the fuel tax should go to building and maintaining our roads. If more money is needed to build and maintain roads, the fuel tax should be raised.

"When the gas tax was instituted, it was only done so because more direct charging mechanisms were not administratively or technologically feasible."

I still cannot think of any charging mechanism more direct than the fuel tax. An individual is charged based on how much wear he puts on the road. To replace the fuel tax with a tolling system would be a wasteful, less effective way of accomplishing what we already can by far simpler means. Additionally, a tolling system effectively punishes those that have sacrificed image and luxury to save our environment, reduce our fuel demand, decongest our cities, and preserve our roads with their vehicle choices and driving habits by charging them the same as those that have done the opposite. With the fuel tax, a big, vision obscuring, smog producing, middle eastern fuel guzzling, road pounding, 8000 pound SUV driving around with the AC on is charged significant tax per mile traveled. A low emission, lane sharing, congestion reducing, road preserving, 300 pound motorcycle is charged far less. Every tolling system I've ever seen would charge these individuals the same amount, though they obviously had drastically different effects on our society and our roads. Several responders to the other post gave various reasons that the move to a toll system would be wasteful, and I saw no well founded arguments to the contrary. I thought FRP said it particularly well in his reply.

The question is why moves like this are being considered. Have those in power simply not thought of how much more sense the fuel tax makes than tolls? Are they not listening to our responses on this forum? Are there other, political reasons preventing fuel tax reform? We would love to hear the real reasons.

The US citizens that care the most and think the most about transportation are right here reading this blog. The blog is new, and more are bound to come. This creates what is probably the best forum possible to discuss issues like this, so I hope you take our input seriously. I'm sure I'm not the only one anxiously awaiting a reply that either shows the benefits of a toll based tax over a fuel usage based tax or indicates our input has made a difference.

[M1EK]

m, the theory that gas taxes are the most efficient and fair mechanism for funding roads is severely flawed. You pay gasoline taxes whether you drive on an expensive suburban-to-urban commuter highway or around your city on locally-funded arterial roadways. In fact, in my state (Texas), the gas tax operates as a huge subsidy from urban drivers to suburbanites because cities maintain most of their major arterial lane-miles while suburbs have mostly state highways.

[Alexander Levy]

Tired of taxes? Try Tire Taxes, instead.

I can think of one, and only one, alternative to taxation of fuel as a fair means of generating revenue from all varieties of motor vehicles, regardless of fuel type and consumption: tires.

From trikes, to bikes, to scooters and tractor-trailers. Whether hybrid, fuel cell, solar or the traditional combustion engine, every thing that rolls on our roadways with wheels uses tires. Tires have a tread-wear life that directly correlates to mileage.

Perhaps we need to end the fuel tax and instead generate revenue to cover construction, wear and tear of roadway infrastructure by simply taxing what may soon become the only common denominator among individual vehicles.

[person]

Tolling is an awful idea, particularly with how it is implemented in most parts of this country: The government makes the expenditures to build a road and a private company gets a sweetheart lease deal to keep most of the money, and often force the local or state government to not improve alternative routes, or even often make them worse.
Toll booths also increase serious collisions where they are present.
Raising the gas tax and forcing the money collected to be spent on infrastructure maintenance is better public policy, as it encourages the purchase and use of more fuel-efficient vehicles.

[RD]

You mentioned "politics" affecting the decision-making instead of good sense. What politics? Usually politics has to do with a particular interest trying to gain an advantage. But where does the advantage in turning a blind eye to the obvious problems with fuel and keeping the transport system working lie? Follow the money -- who getting rich off gasoline and other petroleum? Whose political interest is being served? Even a politician taking a bribe from oil interests would have to see the sell out of his or her own country and family. Frankly, Americans (even the politicians) are not that stupid. We need some leadership, here, not some gobbeldegook about gas taxes...