U.S. Transportation Secretary wants to drop gas taxes in favor of tolls
If the goal is to incentivize people to use less petroleum does it really make sense to reduce the cost of that commodity? You have to give the Bush administration credit for consistency, at least, when it comes to wrongheaded thinking. The latest example of dubious policy directions comes from Transportation Secretary Mary Peters who is proposing that taxes on gasoline should be lowered and replaced by tolls or congestion charges. The problem with this idea is that unless the fees are tied to fuel consumption, a large incentive to reducing petroleum use is eliminated. With a requirement for automakers to meet a 35 mpg standard now law, there needs to be a reason for people to buy smaller, more efficient engines. When gas prices go up people buy those more efficient cars. Shifting from fuel taxes to road taxes will be counterproductive. Peters argues that higher gas taxes won't be accepted by people because they don't trust the money to be spent efficiently. However, just because the basis for taxation is changed will not change the way people think about how the money is spent. With tolls that don't discriminate against thirstier vehicles, what they drive will make no difference to commuters. Unless they feel the pain at the pump when they fill up, people tend to go for the most car they can afford. This plan is just plain stupid.
[Source: Seattle Times, via TTAC]
Reader Comments (Page 1 of 1)
EVan 10:42AM (4/07/2008)
I whole-heartedly 100% agree.
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Wave54 10:54AM (4/07/2008)
This is sheer lunacy if air quality is the actual goal. I've been driving long enough to remember when my state (CT) had tolls and the wasted time idling bumper-to-bumper to get through them. All tolls were ended after a tractor trailer rear-ended a line of cars at a toll plaza and set them all ablaze, killing seven, IIRC.
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Mike Z 10:56AM (4/07/2008)
Thanks for keeping your post non-political and objective in it's thinking.
After all it's the government's job to dictate what car's people drive if I recall correctly as directed by the 77th amendment.
The fact that you say "there needs to be a reason for people to buy smaller, more efficient engines." Basically comes off as saying "small, efficient cars suck and therefore people will not freely choose to drive them; therefore we need to force them to buy them, in this free and democratic society"
Also, I'm sure 18 cents a gallon tax is that much of an incentive.
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Gordio 10:59AM (4/07/2008)
In China, they have tolls for highway. But this has nothing to do with discouraging driving. This is because there is no tax to maintain the highway, so their toll system is such so only those who use the highway will pay for the its maintenance.
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Kardax 10:59AM (4/07/2008)
I think it's too soon now, but eventually something will need to be done as green technologies become prominent and fewer and fewer miles are coming from fossil fuels. The government will miss their gas taxes...
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Throwback 11:32AM (4/07/2008)
CAFE has mandated 35 MPG. If gas taxes are reduced, what is the difference? How much is the federal gas tax, 20 cents per gallon? Do you think that will impact what people drive? It's not like gas prices are coming down anytime soon. Ethanol is going up, crude oil is going up, most people will look for more fuel efficient cars due to these factors. I think Tolls are a bad idea becuase they slow the flow of traffic. I think charging a license fee based on vehicle weight, excluding heavy trucks is a better solution.
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Mike Simpson 11:37AM (4/07/2008)
In response to Mike Z above...
No, the gov't shouldn't tell us which cars to buy, but the Big 3 just don't know how to make a product that the mass public doesn't know to choose. Offering up a new more efficient model for the hell of it never was their style - I believe the case is clear that the gov't CAN help efficiency happen [at least quicker].
Also, 18 cents/gal => $2 to $4 per tank .... maybe a few hundred a year might make a difference (similar to savings with the prius).
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Tim 11:38AM (4/07/2008)
As if traffic was NOT bad enough already, let's slow it down some more....
MORON!
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steven 12:37PM (4/07/2008)
I think there might be an ulterior motive at work here. What happens when 35 MPG is the standard and folks buy these cars that GET 35MPG? They buy less gas and the tax revenues will be greatly reduced.
How do you offset that loss of tax revenue? By coming up with a new revenue source. Re; toll slowdowns: you do what NYC is proposing. Those without easy pass have to pay a higher fee and then folks all get an easy pass.
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rgseidl 12:45PM (4/07/2008)
CAFE has a huge E85 loophole in it now and the new EPA drive cycle isn't used for it. Expect car makers, the oil industry and politicians to create new loopholes as the 35MPG begins to eat into profits.
By contrast, as Europe and Japan have proven, high taxes on fuel and/or vehicle registration do encourage the development of useful, attractive vehicles that get deliver high fuel economy. But US voters still appear to believe they have a god-given right to cheap gas, so no politician is going to stick his or her neck out in an election year.
Rush hour congestion charges do make sense IFF commuters have alternatives that alleviate that congestion. Carpool lanes are one option, but they are often underutilized. Dynamically routed vans/microbuses for 8-20 passengers that collect commuters from their homes and deliver them to their place of work - possibly with one connection - would be attractive. This applies especially in places like San Francisco or New York where parking is so hard to find or expensive that many residents choose not to own a car at all.
However, such services would need to continue throughout the day for shoppers, schoolchildren, seniors etc. in order to keep the drivers busy. Also, dynamic routing requires a central dispatch system based on a call center and substantial compute power to approximately solve many traveling salesman problems in parallel.
Fixed-route buses, light rail and regional heavy rail are useful only if you happen to both live and work close to stations/bus stops.
Electric bicycles can deliver significant range without breaking into a sweat and, can achieve average speeds comparable to those of cars stuck in rush hour traffic (~20mph). However, most cities don't provide sufficient safe bicycle routes to encourage commuters to get out of their cars. Except for expensive enclosed designs, bicycles are essentially limited to fair weather. However, that is when smog is at its worst, so investing in bicycle routes along minor roads is still a good idea.
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Tyler 1:01PM (4/07/2008)
This is such a bad idea. We enough problems as-is with congestion and day-long traffic jams. This would only contribute to the mess, and most likely immobilize America with the number of Tolls that would have to be put in place to make up for the income of the gas tax.
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Jeff 1:10PM (4/07/2008)
To tell you all the truth, I think both ideas are wrong. Pay at the pump is rough on less effiecent cars. Toll booths take way to much time. The city of Portland OR. did a study a few years back. They took 100 cars and fitted them with a GPS unit that logged what roads you drove based on what branch of government maintained them. What they found is that if you took the total dollars collected at the pump and divided it by the percentage of miles in each area, that the local governments got a much larger share of the money. Now before people start screaming about privacy, I Know. But if you not spending time someplace your ashamed of, what is the problem.
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Whopper 2:31PM (4/07/2008)
The DOT and the FAA etc. are the favorite places to install people who haven't a clue about what they are overseeing but were good political fund raisers or meet the correct sex/ethnicity quota. One of the reasons FAA inspectors were retiring in droves was because of the beuracratic boobs who were put in charge. The same is true of the DOT. Toll roads have become the latest means of draining money from our pockets - the governor of Alabama is singing the same song.
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psarhjinian 2:28PM (4/07/2008)
So, instead of just taxing fuel, which is easy, we do a user-pays system that balkanizes regions, increases overhead costs, slows implementation and carries more inefficciencies.
Why, this sounds like the US medical care system.
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scappy 2:31PM (4/07/2008)
Throwback,
One problem with taxing based on weight of the vehicle is that it does not take into account how far it is driven. A pickup truck that does 20 miles a day is no worse than a civic doing 60. You would also hit a gray area where a hybrid is more efficient but weighs more because of the technology.
This tax solution can easily be solved by taxing vehicles upon their annual inspection. This way it does not matter what fuel / energy is used everyone is taxed based on how much they drive. If they would like to tweak the formula to factor in what someone drives then fine.
Hell this could probably be factored into your income tax and have a separate tax return form for when your vehicle is inspected.
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roz 2:58PM (4/07/2008)
Dynamic pricing should be placed on road to help cure congestion. Congestion in most cases is the result of too many cars on the road, the demand for road space is outstripping the supply. Traditionally we have tried to balance this by increasing the supply, more roads. But when you are giving something away there will always be more people ready to use a free good. Pricing the roads and varying the price base on demand would mean that drivers make a rational decision their use of a road at any given time. That rational decision making would eliminate congestion. The savings would be enormous in terms of time, fuel, not needing to build more roads, reduced pollution. It is probably one of the single most important changes we could make to improve the efficiency of our transportation system overall.
And tolling could be done using RFID, tolls are already collected this way in many areas, some at freeway speeds - so there is no cause for slow down at the point of collection
BUT this issue of congestion pricing should be totally separate from whether or not we should tax gas. Its silly to even suggest removing gas taxes. I would rather see higher taxes on petroleum consumption than lower. We need to contain the full cost of using this material in its cost. Fuel cost includes the GHG emission and other pollution from its production and use. The cost of oil also includes the external costs to securing market access to the resource.
If you consider the war in Iraq the tax on oil is way too low. If you took the $3 Trillion cost for the war and divided that over the oil we will use over the next 10 years (7.3B bll/y) it comes to $40 per barrel or $2.10 per gallon, and that is just the cost of the war - it does not take into account any of the other effects of oil in terms of pollution which is massive.
Of course one could argue that the war is not solely for oil, that it has potential strategic benefits (or costs). Reasonable people can disagree on how much of a factor oil was in the decision to go to war, but its hard to argue that its 0%. I'd say its 70% which would mean the tax should be at least $1.46 per gallon, not that we would ever get that. Still its crazy to suggest we should lower taxes and it speaks to the level of corruption in the thinking of the Bush administration that they would entertain such an idea.
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Dad 4:13PM (4/07/2008)
"You have to give the Bush administration credit for consistency, at least, when it comes to wrongheaded thinking."
Sam, you are so FOS is it sad. Please keep politics out of you articles. Your "opinions" are not shared by all of your readers.
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Chris M 4:09PM (4/07/2008)
The toll proposal would probably require transponders on all cars, tracking everybodys movement. Sounds rather like 1984 "Big Brother watching you".
Ah, but the Bush Administration might not do that, they've had a real bad habit of cutting taxes, then NOT cutting spending, resulting in a $9,000,000,000.00 and rising national debt. Bush would like to cut the fuel tax, then not do anything to make up the difference. His goal appears to be the bankruptcy of the United States Government and the subsequent takeover and rule by the ultra-wealthy class.
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mike 4:37PM (4/07/2008)
To Reduce Congestion: RAISE the Gas Tax: and Fund Public Transportation. Actually, make mass transit FREE, or charge a token fare, say 25 cents. Then watch the highway's empty out.
But, they the need for New highway's would drop.
So, you can guess which business groups would scream about that.
What's worse the Aristocratic gas tax of $1.50 or the Federal gas tax of $0.18? What's better for AMERICA is a Higher Gas Tax to fund infrastructure repairs and mass transit.
I bet, a higher gas tax would force the oil industry to drop gas prices to compensate for the lost sales.
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Throwback 5:01PM (4/07/2008)
Mike, free mass transit sounds good in theory but if the roads are empty out who pays for the system? I guess us folks in rural America with no mass transit. I also doubt the oil companies will drop the price of gas, they will supply other countries. India and China will have no problem sucking up any excess gas. The Tata Nano while fuel efficient (50 mpg) still gets worse mileage than a 500cc motorcycle.
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