>Increased gas tax proposed

>According to the Chicago Tribune, Congressman Oberstar of Minnesota has discussed increasing the federal gas tax as part of improving our nation’s crumbling infrastructure.

The high cost of fuel and other building materials, increased wages and prices, as well as our improved fuel economomy and flat gas taxes have decreased the amount of highway or transit construction we can fund using our existing gasoline user tax revenue.

The gas tax would need to be increased from 18.5 cents per gallon to 29 cents per gallon merely to deal with inflation since 1993, the last time the tax was increased.

The American Road and Transportation Builders Association recommends indexing the tax to inflation after that.

In the US, the average tax on a gallon of gasoline is around 47 cents per gallon, or about 7.5% of the pre-tax price.

In many European countries, the tax rate is 100% or more, leading to $8 or $9 per gallon gasoline.

Land use in Europe leads to shorter driving distances and shorter commutes (see page 112). Average per capita vehicle km per year is just about half of that in the US (1990 data). In Europe, it’s around 5,000 km per person per year, whereas it’s closer to 11,000 in the US.

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About perkinsms

I'm an engineer and father interested in transit, parking and economics.
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4 Responses to >Increased gas tax proposed

  1. Geoff says:

    >I am ok with an increase in gas taxes including the inflation indexing. However I would prefer that at least part of the money go towards concrete programs to create renewable transportation. Ethanol does not count. What good will a highway system be if we are still promoting the use of oil. Part of this money could go towards the “Manhattan Project” for energy that has been proposed elsewhere.

  2. >Dat der gas-o-leen tax dun be un-uh-MERICAN! I don’t be carin’ wut dey do in EUROPE! I WANTZ my gas 2 be CHEEP, you HERE?

  3. Geoff says:

    >Want cheap gas? I suggest you move to an oil producing nation with heavy subsidies. Otherwise you are SOL.

  4. Michael says:

    >Thanks, Geoff. Some of those countries sell gas at less than 50 cents per gallon. Because of the low prices, demand is skyrocketing. For some of these countries, supply is in decline as well. See this wikipedia page for an explanation of the likely consequences of that situation: strong export declines.

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