Should Detroit's bailout bucks be paid with a gas tax?
Now that gas is once again (relatively) cheap, there's a renewed sense that adding a higher tax on each drop of petroleum might be a wise plan. It's often suggested that revenues from a higher gas tax are necessary to keep America's vast roadways in good working order, but some believe that there might be other uses for these taxpayer funds. For instance, we are all well aware by now that the Detroit-based automakers are losing money much faster than they are taking it in, which has led the Feds to offer extra funding in the form of guaranteed low-interest loans. Where should that money come from? As it stands, TARP funds that were initially slated for various banks are to be used for Detroit, but would revenue from an increased gas tax be better?
According to Angus MacKenzie at Motor Trend, the US government collected $29.4 billion in fuel taxes last year based on the current 18.4-cent tax on gasoline and 24.2-cent tax on diesel. Those figures have remained the same since 1993, though states are also free to create their own gas taxes. So, dear readers, is it time to raise our national gas tax to help out Detroit?
[Source: Motor Trend]
Reader Comments (Page 1 of 2)
Trev 9:16PM (12/27/2008)
So the lower MPG the cars get the more taxes can be used to pay the companies making the vehicles? I know they will have set limits, but this just doesn't strike me as a good plan.
Reply
Rodney 8:46AM (12/29/2008)
Best Plan I could come up with for Bailout, Send all the us citizens Certificates for Cash that can be used to buy from the company's asking for Bailouts, say 30k each for a new car, this way company's that have a good product/reputation etc will get consumer support and be bailed out. also once a person use's ther certificate a check can be sent to them to CASH and help boost economy in there home town.
Jeff 6:02AM (12/28/2008)
Raised it a dollar a gallon. The Feds will raise $150 billion a year. The money could be used to pay for the Obama stimulus package.
By raising the gas tax we will lower demand which will keep oil prices low and our government gets the money instead of those corrupt Middle East, Russian and South American oil producers. It is brilliant!
Plus the hybrid and electric car industries will take off again.
Reply
Mike!!ekiM 10:53PM (12/27/2008)
A Global Warming Gas Tax
A Iraq War / Shipping Lane Tax
An Oil Industry Propaganda Tax
should be proposed to bring gas SLOWLY up to the actual cost of delivering Oil to the US market.
Plus, some method to offset some of that tax in your 1040, based on income?
Reply
Matt 11:54PM (12/27/2008)
No, they shouldn't. Raising the gas tax is ok, but it should continue to go toward infastructure maintenance. More than half the bridges in the US are at the end of their life expectancy, and most federal road projects are facing budget cuts as is. Deteoit does not need THAT money.
Reply
Derek 10:06AM (12/29/2008)
Clearly, you have never driven on the roads in Detroit! ;)
Matt 10:13AM (12/29/2008)
Touché
Matt 12:00AM (12/28/2008)
If you thought the auto industry was important, wait until you see what happens when the roads fall apart.
Reply
jaguar879 12:38AM (12/28/2008)
What so we can't just put it on the national "credit card" like everything else?
Reply
vadim golinsky 1:34AM (12/28/2008)
taxes are always bad,
no one likes taxes, it sucks but the govt. should raise the oil tax,
make it more proffitable for people to buy electric and fuel efficiant vehicles in the long run,
make it so the prices will push alternative energy development,
make it so GM FORD AND CHRYSLER and others stop leaving in a dream, making realistic plans for actual fuel efficiant car that leaves a whole lot of money in the consumer's pocket.
there are many good reasons to do so,
and you shouldn't look for reasons not to.
Reply
tankd0g 12:47AM (12/28/2008)
Hahah, watch how public opinion suddenly turns into a Big 3 lynch mob if this goes ahead. People are all for using their tax dollars for bullshit, until they have to pay more taxes.
Reply
Jharlan 10:49AM (12/28/2008)
Any politician advocating raising fuel taxes will be summarily thrown out on their ear by the electorate. Who wants to step up and sacrifice themselves first? Better find another way to tax poor people to bail out the rich.
Reply
oollyoumn 7:20AM (12/28/2008)
I am in favor of raising the gas tax, but not to bail out poorly managed companies. Gas tax money should go into new technology that reduces our use of gas. Auto companies that build total EVs should get it to offset development costs, American or not. But the cars must be largely made here and sold here first. Also smart roads and EV infrastructure are other good technologies possibly worth investing in.
How much tax? Enough to make alternate energy viable. When gas was over $4 people seriously started looking for alternatives, and if they couldn't find them, they seriously re-evaluated their "needs" and started driving more reasonably sized vehicles. So maybe the magic number should be one that keeps gas over $5/gal.
Reply
Andrey 2:34PM (12/28/2008)
I think we should add an extra penny. My credit card bill is getting high. Bailling out "not so smart 3" might as well help me out too.
justout 8:29AM (12/28/2008)
no tax
no subsidies
That will level the playing field
Reply
kagiso 8:47AM (12/28/2008)
Raise the tax on gas 54c/gallon. Simultaneously remove the 54c/gallon tax on Brazilian ethanol, and the subsidy on US corn ethanol. Level playing field all round.
In the short run corn ethanol will have the same competitive position with gasoline and Brazilian cane ethanol. In the long run the US will gain energy security as cane ethanol displaces ME oil.
If the cost of gas goes above say $2.50, then temporarily reduce the tax by one cent for every two cent rise in pre-tax gas cost, so cushioning the worst of the next spike.
jim 9:00AM (12/28/2008)
The gas tax needs to be raised but the proceeds should be used to fund transportation infrastructure. Given that gas taxes, like all sales taxes, are regressive, an alternative would be an excise tax on vehicles whose gas mileage is below a target mileage figure. Say $1000 for each MPG below the target.
This could also be applied as a transfer tax on the sale of used vehicles with the fund going to state transpo programs.
Reply
justout 9:19AM (12/28/2008)
Taxes collected never go to there intended purpose.
Reply
JScot 10:05AM (12/28/2008)
Since it is supposed to be a loan, how are we going to be paid back?
Reply
Bob 10:56AM (12/28/2008)
The low gasoline price makes people less inclined to replace old gas guzzlers with new, more efficient vehicles. The market for cars is already in the doghouse because of the credit crunch, so this adds to the misery.
The deficit on the federal budget is 6.5% and rising. Our children will curse us for the debts we leave them with, already more than $30,000 for each American. Of course nobody likes higher taxes, especially in an economic recession, but this is one tax hike I would like to make a strong case for:
I would strongly favor a tax increase that mimics the effects of $100 dollar a barrel oil. This will result is gas prices that are high enough to encourage economical behavior, but not so high as to bankrupt drivers. President elect Obama says this is not the time to raise gas prices for families that may already be in distress. I say this is not the time for such short term policies. We are not going to save families that lost a job or pension by lower gas prices, we need other arrrangements for that.
Reply