Should the fuel tax be increased?

[PaloAltoCougar]

Raising the gas tax has been advocated for years by those seeking ways to reduce foreign oil dependency and to encourage alternative fuel development. I see the obvious problems with this, but I wonder if a $1/gallon tax wouldn't have been a good thing to do immediately after 9/11 when Americans might have been willing to make the sacrifice. But we didn't, and given the economy and high oil prices, doing so in the recent past would have been political and economic suicide. Until now.

With oil prices at incredible lows, and with no expectation they'll rise significantly soon, Michael Kinsley proposes the tax be raised immediately. Now Kinsley always struck me as the type of guy who got the wedgies at summer camp, but he has an interesting idea: cut payroll taxes to offset the increased fuel tax.

This would be a break for everyone, rich and poor, as well as employers, and presumably encourage more hiring. As he concludes: "It comes down to this: in the terrible storm of economic misery, we suddenly have a half-trillion-dollar windfall. As unemployment heads toward double digits, we can use this found money to encourage people to create jobs, or we can use it to encourage people to use more gasoline. It's a pretty easy choice, don't you think?"

So, what do you think?

http://www.time.com/time/magazine/article/0,9171,1865971,00.html

[landpoke]

If the economy were booming it'd probably work. But, given the general belt tightening that everyone seems to be doing, I imagine an extra buck on the price of a gallon of gas would see people using less sooner rather than later and that would limit any expected rise in revenue. Then again I'm a bit biased in these matters.

And, of course, I didn't read the article so maybe he addresses that.

[landpoke]

I have now read the article and my previous comments still stand.

(As always consider the unabashed big oil whore source.)

Some additional comments: I'm all for cutting FICA, but I wonder how the AARP et al would feel about depending on a tax intended to cut consumption (and thus it's own revenue source) for the income of its constituents. Never underestimate the power of pissed off, change fearing old folks. You know what I'm talking about PAC.

I guess that's only one additional comment and I'm too lazy to go back and edit so there you go.

[Mormon Red Death]

I don't know about the country but I think they should raise it in Michigan (obvioiusly they can't change the FICA) I do think they could use that extra revenue to do my health plan for Michigan. The autos don't have to pay for health insurance expenses any more and they are heavily incentivized in their own state to make fuel efficient vehicles. The deductibles can be made by the UAW Health care account.

My health plan:

State paid Health insurance that state residents get vouchers for when they pay their state income tax. Its a high deducible for a health savings account. Provisos to the High Deductible insurance:

A. Every person from 1-18 is completely covered with no deductible
B. Single people from 19-65 have $5000 deductible
C. Married people from 19-65 have $5k deductible per person or $8k per couple
D. Single People over 65 have a $3k deductible (State pays Medigap insurance)
E. Married people 65+ have 3k deductible or 4k per couple (State pays Medigap insurance)
F. 100% of Preventative measures are covered
G. Any person over 65 who has a terminal disease must do hospice care

3. 10% Sales tax on all fast food restraunts and $2 a gallon Gas tax

4. Smoking cessation , Gym membership, or other weight loss programs all contribute up to $1500 of Deductible. Dental care can contribute up to $4,000 of deductible.

5. System is run by any insurers that wants to and the state buys the high deductible insurance at fair market value price.

[creekster]

I don't know about the country but I think they should raise it in Michigan (obvioiusly they can't change the FICA) I do think they could use that extra revenue to do my health plan for Michigan. The autos don't have to pay for health insurance expenses any more and they are heavily incentivized in their own state to make fuel efficient vehicles. The deductibles can be made by the UAW Health care account.

My health plan:

State paid Health insurance that state residents get vouchers for when they pay their state income tax. Its a high deducible for a health savings account. Provisos to the High Deductible insurance:

A. Every person from 1-18 is completely covered with no deductible
B. Single people from 19-65 have $5000 deductible
C. Married people from 19-65 have $5k deductible per person or $8k per couple
D. Single People over 65 have a $3k deductible (State pays Medigap insurance)
E. Married people 65+ have 3k deductible or 4k per couple (State pays Medigap insurance)
F. 100% of Preventative measures are covered
G. Any person over 65 who has a terminal disease must do hospice care

3. 10% Sales tax on all fast food restraunts and $2 a gallon Gas tax

4. Smoking cessation , Gym membership, or other weight loss programs all contribute up to $1500 of Deductible. Dental care can contribute up to $4,000 of deductible.

5. System is run by any insurers that wants to and the state buys the high deductible insurance at fair market value price.

All that would do would be to slow down the service at McDonalds.

[Solon]

Raising the gas tax has been advocated for years by those seeking ways to reduce foreign oil dependency and to encourage alternative fuel development. I see the obvious problems with this, but I wonder if a $1/gallon tax wouldn't have been a good thing to do immediately after 9/11 when Americans might have been willing to make the sacrifice. But we didn't, and given the economy and high oil prices, doing so in the recent past would have been political and economic suicide. Until now.

With oil prices at incredible lows, and with no expectation they'll rise significantly soon, Michael Kinsley proposes the tax be raised immediately. Now Kinsley always struck me as the type of guy who got the wedgies at summer camp, but he has an interesting idea: cut payroll taxes to offset the increased fuel tax.

This would be a break for everyone, rich and poor, as well as employers, and presumably encourage more hiring. As he concludes: "It comes down to this: in the terrible storm of economic misery, we suddenly have a half-trillion-dollar windfall. As unemployment heads toward double digits, we can use this found money to encourage people to create jobs, or we can use it to encourage people to use more gasoline. It's a pretty easy choice, don't you think?"

So, what do you think?

http://www.time.com/time/magazine/ar...865971,00.html

This week's Economist mentioned a similar idea. I think the tax has been static at 18.something cents per gallon since 1993. Inflation alone has eroded the value of that amount.

[Coach McGuirk]

Surely we can think of another tax can't we?

Accounts Receivable Tax
Building Permit Tax
CDL license Tax
Cigarette Tax
Corporate Income Tax
Dog License Tax
Excise Taxes
Federal Income Tax
Federal Unemployment Tax (FUTA)
Fishing License Tax
Food License Tax
Fuel Permit Tax
Gasoline Tax (44.75 cents per gallon)
Gross Receipts Tax
Hunting License Tax
Inheritance Tax
Inventory Tax
IRS Interest Charges IRS Penalties (tax on top of tax)
Liquor Tax
Luxury Taxes
Marriage License Tax
Medicare Tax
Personal Property Tax
PropertyTax
Real Estate Tax
Service Charge Tax
Social Security Tax
Road Usage Tax
Sales Tax
Recreational Vehicle Tax
School Tax
State Income Tax
State Unemployment Tax (SUTA)
Telephone Federal Excise Tax
Federal Universal Service Fee Tax
Telephone Federal State and Local Surcharge Taxes
Telephone Minimum Usage Surcharge Tax
Telephone Recurring and Non-recurring Charges Tax
Utility Taxes
Vehicle License Registration Tax
Vehicle Sales Tax Watercraft
Registration Tax
Well Permit Tax
Workers Compensation Tax

[TripletDaddy]

Here in California the legislature is at a stalemate. The Dems have proposed tax increases and budget cuts to address this unprecedented state deficit. One of the proposed increases would be a fuel tax. Also, an increase in state income tax...2.5% hike.....if you make $1000, you pay an extra $25.

The Republicans have opposed the tax increases.

For some crazy reason, they have yet to propose a different, viable alternative to immediately address the deficit, but at least we wont have to pay that extra $25 a year.

[Coach McGuirk]

Here in California the legislature is at a stalemate. The Dems have proposed tax increases and budget cuts to address this unprecedented state deficit. One of the proposed increases would be a fuel tax. Also, an increase in state income tax...2.5% hike.....if you make $1000, you pay an extra $25.

The Republicans have opposed the tax increases.

For some crazy reason, they have yet to propose a different, viable alternative to immediately address the deficit, but at least we wont have to pay that extra $25 a year.

So someone who makes 100K should be super happy about handing over another 2.5K to the government? What is the state income Tax in California at now?

[TripletDaddy]

So someone who makes 100K should be super happy about handing over another 2.5K to the government? What is the state income Tax in California at now?

That isn't the question. That is the typical answer, though.

The question is...what is the viable alternative solution to address this impending crisis. The deficit is massive. And the solution has to be fairly expeditious.

I think we can all agree that nobody wants to give their money away.

[Coach McGuirk]

That isn't the question. That is the typical answer, though.

The question is...what is the viable alternative solution to address this impending crisis. The deficit is massive. And the solution has to be fairly expeditious.

I think we can all agree that nobody wants to give their money away.

Sorry, I did not mean to pull a Tex. I am not sure I have the answer and their soulution could be fine. The biggest hangup for me is the money will be going to the same people who created the massive deficit. The trust level has to be pretty low.

Are the states next to run up to capitol hill for a Bailout? Did anybody manage a budget for bad times or did everyone just think we had a ever expanding economy?

[TripletDaddy]

Sorry, I did not mean to pull a Tex. I am not sure I have the answer and their soulution could be fine. The biggest hangup for me is the money will be going to the same people who created the massive deficit. The trust level has to be pretty low.

Are the states next to run up to capitol hill for a Bailout? Did anybody manage a budget for bad times or did everyone just think we had a ever expanding economy?

Actually Coach, I am all but counting on states to ask for bailouts. Seriously.

Sooner or later, people will realize that raising taxes is about the only way out of this mess. Hopefully sooner than later because I'd rather pitch in now than see us standing in soup lines in the winter.

I don't want to pay more taxes, but is there really any other way? Pelagiu$ might have some good insights on alternative methods of stablizing the economy short of raising taxes (and deep budget cuts)

[BigPiney]

Here in California the legislature is at a stalemate. The Dems have proposed tax increases and budget cuts to address this unprecedented state deficit. One of the proposed increases would be a fuel tax. Also, an increase in state income tax...2.5% hike.....if you make $1000, you pay an extra $25.

The Republicans have opposed the tax increases.

For some crazy reason, they have yet to propose a different, viable alternative to immediately address the deficit, but at least we wont have to pay that extra $25 a year.

You are right, but maybe we should take it further.

We should have an increase in state income tax...7.5% hike.....if you make $10, you pay an extra 75 cents.

For some crazy reason, people are opposed to this, but at least we wont have to pay that extra 75 cents a year.

[landpoke]

did everyone just think we had a ever expanding economy?

Anyone who thinks otherwise is a commie.

I looked at the LA Times a bit to see what all the hubbub was about and, besides noting that this would only take care of about 1/2 of the state's projected budget deficit, I also noted that among Cali's other sins is they seem to enjoy coddling organ thieves out there:

http://www.latimes.com/news/local/la...,2074223.story

Y'all can't fall into the sea soon enough.

[landpoke]

You are right, but maybe we should take it further.

We should have an increase in state income tax...7.5% hike.....if you make $10, you pay an extra 75 cents.

For some crazy reason, people are opposed to this, but at least we wont have to pay that extra 75 cents a year.

Or, to put it another way, if you make one cent you're paying an extra .075 cents per year. Although for all practical purposes you'd have to round up to one cent which would make it a 100% tax.

And that's how the damn commie Dems get you every time.