Yet More on the Gas Tax: We Ought to Be In This One Together

July 2nd, 2014 at 9:36 pm

OK, perhaps I’m the slightest bit obsessed by the issue of the federal gas tax and the shrinking Highway Trust Fund.  But I’ve got my reasons: policy, political, and personal.

On the policy side, raise your hand if you think we can maintain a safe and productive transportation infrastructure on the back of a federal gas tax that has held fast at 18.4 cents/gallon for over twenty years.  (Anyone who raised their hand, use that hand to smack yourself in the head until you’ve changed your mind.)   It’s not been raised for inflation, for better mileage of the fleet on the road, nor for the fact that people are driving less and using more mass transit (about 15% of the fund supports mass transit).

On the personal side, every morning when I drive to work in DC for the past five or six months, I and everyone else swerves around this pothole in the 3rd Street Tunnel, about two blocks from the Capitol building.  Actually, it started out as two potholes but they’ve gotten married and are probably about to start a family.  And that just really irks me.

Finally, there’s the political, upon which I’d like to dwell a bit.  In an earlier piece, I criticized the White House for rejecting a bipartisan proposal to replenish the trust fund in perpetuity by raising the federal gas tax by 12 cents over two years and then indexing it to inflation.  It’s not a perfect proposal, but it’s an excellent place to start the debate.  So I was quite disappointed when the administration appeared to shoot it down.

Today, press secretary Josh Earnest was pressed a bit more on this point, and while he touted the administration’s preferred idea to pay for infrastructure spending—closing corporate tax loopholes “that benefit the wealthy”—he left the door open at least a crack, saying something like, “If there are other people that have other ideas, we’ll certainly evaluate them as they move through the process.  But we’ve been very clear about what we support.”

Now, anyone who knows my work at all knows I’m no apologist for “the wealthy.”  Though the economic incentives may point in that direction, I do not feel the slightest bit compelled to defend the top 1%.  In fact, I recently wrote that I don’t see how we help the poor more without taxing the rich more.

But I don’t think every single tax must assiduously avoid those in the bottom 99%, especially one like the federal gas tax that works much like a user fee.  We who use roads and transit know who we are and there’s nothing wrong with making the case that we should help support their upkeep.  There’s no need to put this solely on the wealthy.  I’m confident that most of us are smart and fair-minded enough to readily understand that the fund can’t function on a tax that’s gone unadjusted for 21 years.

It’s true that the gas tax is regressive, and that’s all the more reason to maintain and increase the progressivity of other parts of the tax code, much as the administration has argued.  We should absolutely close those corporate loopholes Earnest referenced.  But if a few more cents per gallon is what it will take to maintain our highway infrastructure, then IMHO it’s the job of our leaders to make that case to the non-wealthy along with the rich.

The President is particularly eloquent and convincing in pointing out how we’re in this together.  Here’s a case where we can put that into action.  Not: “let’s get together and tax someone else for something we all use,” but “if you’re a driver, then I think you’ll understand that after 21 years, I need to ask you to kick up your contribution to the infrastructure upon which we all depend.”

I can’t be sure it will work, but it’s the right argument.

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12 comments in reply to "Yet More on the Gas Tax: We Ought to Be In This One Together"

  1. Robert Buttons says:

    The median salary for a DC city-employed administrative assistant is $72,000 plus generous benefits. I’m sure local govt can come with a local tax to take care of local potholes.

    • Ray in Bowie says:

      The majority of the persons using the 3rd street tunnel are not D.C. residents, but I get your point, if accurate, about $72K salaries administrative assistants.

    • Smith says:

      Not getting why Obama isn’t praised for at least one time seeming to take the initiative and outsmart the Republicans. He’s asking the country (who are made up mostly of drivers) which they want:
      a) No more highway repairs
      b) A gasoline tax
      c) Close loopholes for rich corporations

      You can be with Obama and the people, or with the rich corporations avoiding paying their taxes.

      This may serve as a model for raising taxes on the rich, since we’d like to avoid the World Wars which previously beneficially raised marginal rates.

      (yes the higher gas tax makes sense, but mostly just to aid conservation and alternative energy with less externalities, and if partly dedicated to alternative vehicular power research, aids foreign policy objectives too, and should be phased in now during low inflation period)

      • Robert Buttons says:

        Sorry, but I can be for road repairs but against tax money being taken from my locale for purposes of insider crony dealings creating even more bridges to nowhere.

    • Smith says:

      Fear not the robots, nobody makes coffee like a good administrative assistant, even if they’re not actually making the cup. Who else could be relied on to choose the special blend of the day and bring it down to the meeting because you have an important call just beforehand. I don’t care how life-like the robots get, I want to hear what my administrative assistant thinks of the report I just created (with my new report app) which will be read and summarized (with the aid of summarization software) by someone else’s administrative assistant. I want to hear what my administrative assistant is doing over the 4th of July weekend. Much less interested in the Robots plans.

      Note: Average salary for the U.S. is $70,000 (includes capital gains and corporate profits, total income divided among 120 million full time workers, Krugman used figure in a column, but explanation based on my own previous research) While there would be incentive problems if everyone made the exact same amount, clearly we’d be better off if everyone made a figure much closer to $70,000, excepting of course the top 25% who already make more (and they run the country).

  2. doverby says:

    I’m with you that the White House should (i.e. needs) to be open to increasing the gas tax. It’s the only viable way of keeping the fund solvent. But this bipartisan plan is garbage. They are trying to use the same money twice. You can’t use the gas tax to pay for roads and these ridiculous tax extenders. The extenders are almost worth $200 billion over the next 10 years.

    I mean, I guess this is just a backwards way of deficit-financing some of our infrastructure, which I’m okay with. But it looks more to me like Republicans are getting yet another tax cut, unpaid for. We can’t keep losing revenue like this.

  3. Mark Jamison says:

    This comes down to the larger issue of when we’re going to wake up and pay for the government we both need and want. The Right can talk till they’re blue in the face about small government but the simple fact is that people want (and need) programs like Social Security and Medicare. National infrastructure is in a whole category by itself. Without a modern infrastructure we basically fall apart. Infrastructure isn’t an issue of small or large government but one of effective and necessary government.
    Regressive as the gas tax might be it serves a useful purpose and does so in an efficient way. Not only would a higher gas tax fund necessary infrastructure but it promotes positive attempts to address externalities by creating incentives to conserve energy.
    A hundred years ago the economist Thorstein Veblen wrote about our economy becoming based on the principle of something for nothing. Today we are seeing the effects of that mentality. There is nothing remotely conservative about allowing our national infrastructure to deteriorate because of a starve the beast ideology; that’s nothing more than selfish nihilism.

  4. John Hobgood says:

    Nix on the tax. Drains more money from the private sector at a time when we should be leaving more money IN the private sector. The Federal Gov’t should just fund that itself.