Passenger Trains > Feds: Gasoline tax hike not a good idea...

Recent discussions about increasing the 18.4 cents per gallon federal gasoline tax, and related motor fuels taxes, have been pushed back by the council of economic advisors. President Trump's infrastructure proposals made use of an unspecified increase in this tax as part of the public-private partnership. An undetermined amount of this increase would go to mass transit.

The panel notes that electric cars "don't pay their share" and "trucks need to pay a higher portion of the total highway bills". This tax was not designed to function in today's world.

The CEA is a federal panel of high level economists which advises the president on broad policy matters. It has no ability to impose taxes or propose regulations...


https://www.cnbc.com/2018/02/21/trumps-economic-advisers-warn-on-his-proposal-to-raise-gas-tax.html



Edited 1 time(s). Last edit at 02/22/18 07:22 by Lackawanna484.

Lackawanna484 Wrote:
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> The panel notes that electric cars "don't pay
> their share" and "trucks need to pay a higher
> portion of the total highway bills". This tax was
> not designed to function in today's world.
>
> The CEA is a federal panel of high level
> economists which advises the president on broad
> policy matters. It has no ability to impose taxes
> or propose regulations...

Both of their conclusions are absolutely true. Electric cars don't pay fuel taxes--they get a free ride. My prediction is that, as soon a electric car sales achieve any significant market penetration, we'll see some sort of "miles driven" tax placed upon them. That would likely be the point where a miles driven tax would likely go onto all passenger vehicles. Oh, by the way, the new GPS/self-driving car technology will make it pretty easy to implement such a tax and also make it pretty difficult to evade. Don't pay your miles driven tax . . . your car just won't even start. As to "trucks needing to pay a higher portion of the total highway bill," well, duh, it is has been a well-documented fact for decades that trucks do not pay enough taxes to compensate for the traffic, delays, and road damage that they cause on the highway and road system. So, automobile drivers have to pick up part of that tab, and both autos and trucks are heavily taxpayer subsidized from tax revenues NOT generated from fuel taxes or any other taxes directly generated from highway use--those "extra" tax revenues come from income taxes, sales taxes, and property taxes.

Now, if the CEA had really wanted to spoil the party, they should have added this:

The current taxation policy with regard to transportation subsidizes highway transportation with large amounts of tax revenues derived from sources unrelated to the transportation system. This effectively hides the true costs of highways from both taxpayers and users of the highway system and thus creates overuse and excess reliance on the highway system that otherwise could not be economically justified. The policy also effectively penalizes the privately-owned railroad system that must compete with an essentially endlessly taxpayer subsidized mode of transportation. Therefore, we recommend, as a first step toward restoring some fiscal logic and economically based rationalization of US transportation policy, that the federal government immediately cease any funding of the highway system with tax revenues that are derived from any source other than taxes imposed directly on the users of the highway system. This would force the users of the highway system to recognize and pay the actual costs of their use of the system, and they would then make rational economic decisions as to how much they would use the system and if competing modes of transportation offered better value.



Edited 1 time(s). Last edit at 02/22/18 08:03 by WW.

Good points, and well expressed.

A "value added" surtax on land and improvements which become more valuable as a result of that interchange or new highway would also be a good idea.

The arguments against the Trump fuel tax are rather silly. No tax concept is perfect: we could go to a mileage tax with each vehicle automatically reporting in the miles driven. Or, we could tax lawnmowers or even Amtrak tickets to pay for the highway system.

On the electric cars, there are so few of them that it currently doesn't matter. However, the problem is easily addressed: electric cars could pay an annual charge to the federal government of say, $200, in place of fuel taxes. It could even be assessed on the income tax return.

The issue of trucks paying enough has always been an issue. The American Trucking Association supports the Trump tax increase proposal, probably because it's a good deal for them, relatively speaking.

Variations in fuel taxes for other nations:

https://taxfoundation.org/how-high-are-other-nations-gas-taxes

Most American motorists would probably be willing to absorb a buck or two in increased fuel taxes, provided
the roads reflect improved maintenance.

Electric cars are only a portion of the cars not paying for their usage. All of the new high MPG vehicles also do not pay their fair share.

As for the aurgments about trucks not paying their fair share, remember this: Trucks move product. All costs to move that product are added to the cost of that product. Increase the cost of the moving the product, the cost of the product goes up in price.



Edited 1 time(s). Last edit at 02/22/18 09:20 by jst3751.

Oregon has some sort of mileage tracking experiment going on and has been used an example. There has been talk of using electronic tracking of vehicles in California. Installing equipment in cars, downloading at the gas pump or charge station.

They kinda overlooked the idea of just checking the mileage at the yearly inspection.

It doesn’t matter if you raise the tax on the trucks, it’s just passed down to us the consumer. I know because I own one had that’s the only way you can make it now, cheap freight is history.

TCnR Wrote:
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> They kinda overlooked the idea of just checking
> the mileage at the yearly inspection.

What yearly inspection?

A gas tax that is applied incrementally, say 1 cent per month, would be easier for consumers to accept and adjust to; daily and weekly price variations are more than that.
A gas tax with a 5 (?) year sunset provision, to be replaced by a combination of miles and weight at the end of the 5 year period is another option, but that will take at least 5 years to gain acceptance across the tax collecting agencies in 50 States, the auto manufacturing and repair industry, and the public.
The key to a mileage tax is to only record the miles driven, not where the driver went, due to privacy concerns.
My background is Civil Engineering; our profession is to build the infrastructure (and maintain it) for civilization.

Agreed, trucking is sufficiently competitive and the demand for goods movement is sufficiently unresponsive so that much (if not all) of any additional motor carrier tax would pass through to shippers and consumers, BUT that may be the only way to get consumers to pay for the roads they need to move the freight they want. BTW, using FHWA data and some very rough calculations, raising the current diesel tax to fully account for truck-imposed damages would increase truck rates about a penny a ton-mile.

MLB

railstiesballast Wrote:
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> A gas tax that is applied incrementally, say 1
> cent per month, would be easier for consumers to
> accept and adjust to;

However, to the resellers, bookkeepers and tax collectors, that would be a nightmare. In essance, what that would equal (say implmented over 4 years) is 48 individual new tax rates each lasting one month long. Each tax rate change results in x amount of administrative and accounting overhead. Multiply that by 48 but each only for a period of one month? NO WAY.

Now, what would be a workable solution is say 10 cents per year for 5 years.

FriscoKid Wrote:
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> BUT that may be the only
> way to get consumers to pay for the roads they
> need to move the freight they want.

And if it were publicly sold and stated as that, and the public voted on it and passed it, then by all means.

> BTW, using
> FHWA data and some very rough calculations,
> raising the current diesel tax to fully account
> for truck-imposed damages would increase truck
> rates about a penny a ton-mile.

While to John Q. Public, that may not seem like alot, for an average truck that covers say 2,000 miles a week at say an average load of 44,000 pounds, that would equal for this example $440 per week or nearly $23K per year. Per truck.

> MLB

Were the fuel and ton-mile taxes for trucks raised sufficiently to cover the the true cost that they impose on the highway system, those additional tax costs would be passed on to the consumer. Better that the consumer see the real cost of transport of goods than having it hidden in his or her tax bills. However, the second likely outcome would be that shippers would seek out lower cost alternatives to truck transport for all or some of the journey that their products would take. The railroads would be huge benefactors of that additional business and the taxpayers wouldn't be on the hook to subsidize the transport cost.

The hard truth is that much of the trucking industry is simply a welfare case, unable to economically survive without the indirect taxpayer subsidies it receives. It's sort of like the Mom who buys all the lemons and sugar and gives it to her kid to make and sell lemonade. The kid can sell the lemonade pretty cheap and make a tidy little profit as long as he or she doesn't ever have to pay Mom for the lemons and sugar. In the case of the trucking industry, the taxpayers are Mom.

TCnR Wrote:
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> Oregon has some sort of mileage tracking experiment going on and has been used an example.

The Oregon experimental program is based on voluntary self-reporting. Participants in the program tell the state how many miles they drove and pay a tax/fee of 1.7 cents per mile. In exchange, the car owner gets a credit on his/her Oregon income tax to offset motor fuel taxes paid at the pump.

jst3751 Wrote:
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> Electric cars are only a portion of the cars not
> paying for their usage. All of the new high MPG
> vehicles also do not pay their fair share.
>
> As for the aurgments about trucks not paying their
> fair share, remember this: Trucks move product.
> All costs to move that product are added to the
> cost of that product. Increase the cost of the
> moving the product, the cost of the product goes
> up in price.



The cost to move products, by truck or rail, is absorbed by both consumer and company owners and stockholders. Competitive markets will act as a check on higher costs to consumers. There is only so much you can raise your prices in order to be competitive.

There is not free lunch. Heavy trucks account for a higher percentage of damage to highways so they should bare a higher burden.

Also, remember the most electric cars are hybrids and require a charging source such as a gasoline engine. Last time I checked, they were not exempt from road taxes. Still, a minimal yearly fee seems fair if based on mileage.

jst3751 Wrote:
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> Electric cars are only a portion of the cars not
> paying for their usage. All of the new high MPG
> vehicles also do not pay their fair share.

As a supporter of the phaseout of fossil fuels, I reluctantly admit that you're right on this. If you're driving a Prius, then you aren't paying your fair share. And folks, electric cars are not going to be all that rare in a few more years.

>
> As for the aurgments about trucks not paying their
> fair share, remember this: Trucks move product.
> All costs to move that product are added to the
> cost of that product. Increase the cost of the
> moving the product, the cost of the product goes
> up in price.


True enough, but a bit misleading. Trucks, due to their much heavier axle loadings, do a massively disproportionate amount of damage to highways. Compare an eastern "parkway", available to cars only, with a neighboring interstate open to all traffic. The difference in pavement wear is really obvious.

You can also see it in cases where truck traffic is banned in certain lanes (the leftmost lane in each direction on a 6-lane interstate, or the HOV lane on some urban highways). The lane that carries the truck traffic will wear and crack much sooner than the others.

So I have no problem at all increasing fuel and/or mileage taxes on trucks. Yes, the cost of my next refrigerator will go up. But I'll get better roads in the bargain. And more trains to watch, too.

Somebody is telling these federal lawmakers not to raise the gas tax.
It must be seen as toxic for being re-elected is the only thing I can think of?

mp51w Wrote:
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> Somebody is telling these federal lawmakers not to
> raise the gas tax.
> It must be seen as toxic for being re-elected is
> the only thing I can think of?

of course it is. i doubt any politician would run on a "i'm going to raise your taxes" platform. if they raise taxes after they are elected, they will most likely not be re-elected......

66

jst3751 Wrote:
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> TCnR Wrote:
> --------------------------------------------------
> -----
> > They kinda overlooked the idea of just checking
> > the mileage at the yearly inspection.
>
> What yearly inspection?

All you have to do is drive a 1977 and older car in CA, and the stupid smog inspection (tax) does not apply.