Oracle of Delphi

An open letter to whoever wins on Tuesday

58 posts in this topic

James B. Treece

Automotive News

November 3, 2008 - 1:59 pm ET

Dear Mr. President:

Please raise the gasoline tax.

The country needs to keep moving toward using less imported oil, which means less use of oil -- period. The federal government has mandated higher fuel economy standards. That's a first step.

But we tried that before in an era of cheap gasoline, and it failed. You can take fuel-efficient cars to the consumers, but you can't make shoppers open their wallets. They need a reason to want those cars.

For a while this year, we had that. With gasoline prices up around $4 a gallon (still a bargain by world standards), consumers wanted fuel-efficient cars.

But now gasoline prices are back at, or below, $2 a gallon. If it stays at that level, folks will go back to commuting in half-ton pickups, and we'll keep sending container boats full of cash to Saudi Arabia.

But if Americans know that fuel prices will keep rising, they'll shop for cars differently, and all the efforts that the Detroit 3 and other carmakers are putting into engineering high-mileage vehicles won't go to waste.

Congress may fight you on this. The folks on Capitol Hill may say that a recession is a bad time to impose extra fuel costs on a weary nation. And they're right.

So here's what you do.

Impose a 10-cent surcharge on the fuel price -- effective in 2010. That's when a wave of fuel-efficient cars and trucks will begin to appear in the Detroit 3's showrooms. No need to create demand before the supply is there, right? And we can cross our fingers that by 2010 we'll be past the worst of this recession.

Then up the ante. Raise the surcharge another 10 cents a year for each of the following four years, so that by 2014 it is 50 cents.

Car shoppers can shake off a one-time price increase. They'll behave differently if they know that prices are going to keep rising.

Also, do not promise to use the added fuel taxes on roads and highways. That just encourages more driving.

Oh, you can use it to repair some bridges, if you want. But mostly, use it elsewhere. Pay down the federal debt. Buy better armor for our men and women in uniform. Invest in those alternative fuels we need.

Personally, I'd spend it improving the railroad track for medium-distance travel. You know, the trips that used to be a one- to two-hour flight: say, Detroit to Chicago, Pittsburgh to Philadelphia, San Antonio to Dallas.

Today, with all the hassles of airport security, flights between those cities take three to five hours -- the same as driving. If high-speed rail service could make the trip in less than two hours, people would get on board. The government doesn't have to run the trains, but it does have to maintain the track, same as it makes sure the skies are safe with air traffic controllers.

But that's just one idea.

The main point is to give the American public a reason to want the fuel-efficient cars that are coming. They're going to be great vehicles. It will be a shame if Americans shun them in favor of more Hummer 3s.

Yours truly,

James B. Treece

Link: http://www.autonews.com/article/20081103/A...paign_id=alerts

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What happened to the whole "oil from algae" thing (or any other method that can reduce our dependence on foreign oil)? Then we can replace foreign oil with domestically produced oil, and not raise taxes.

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I can't really disagree with the idea of a gas tax, although I don't know what kinds of problems it could cause. I have thought it would be a good idea in the past.

With gas now close to $2, I don't think people will mind, as long as they know the revenue is being used for a purpose that will ultimately benefit them.

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I would support a gas tax of $1.00/1.50 per gallon, maybe more.

It would be the most patriotic thing that we could do.

Chris

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I agree with WMJ 100% - excellent points.

I could see the point of the intial argument if all the money were to go to alternative fuel development / infrastructure, but to use it anywhere else besides that & roads is just fleecing the captive motorist.

Here's an idea : liberals should be more than happy with a percent tax on the purchase of vehicles over a certain level of economy; those people want to do something positive, let them subsidize those who can't afford to.

>>"It would be the most patriotic thing that we could do."<<{/i]

Hoo boy - if this phrase isn't getting whored out recently.....

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Count me in with WMJ and Balthazar.

There are better ways to get from A to B.

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because the bridge he didn't want fixed collapsed.

While I understand your concern, to be fair to the author he did suggest using the tax revenue for bridge repair.

Several friends of mine have lost their jobs as OTR truckers because the price of fuel got too ridiculous and they weren't making money anymore.

My #1 son in-law is car hauler has been hit with a double whammy. Not only was the cost of fuel a bummer, but the business has been drying up. First the new car deliveries slowed to a trickle, then the car rental return business tried up, then the junk car transport to the crusher business died up as the price of scrap metal went south.

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Until another DEDICATED source of transportation infrastructure revenue is GUARANTEED, the only real, viable option is to raise the gas tax. I can't put a price on a single life, let alone multiple lives, so closing the massive funding gap that began in 1981 with Ronald Reagan is of utmost importance; we can't have another bridge collapse due to deferred maintenance resulting from a lack of funding. We cannot afford to play catch up with our nation's infrastructure any longer.

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While I understand your concern, to be fair to the author he did suggest using the tax revenue for bridge repair.

Gas tax revenue is nearly the sole revenue source for transportation infrastructure repairs. Small portions are allocated toward improving public transit and freight movement, but the vast majority goes to road infrastructure. This money cannot be used for anything else, as the gas tax was implemented so motorists paid approximately proportionally to the amount of miles of roads they used. Now, with increased MPG, this is no longer the rule, but the basic principle generally holds true: drive more, pay more in gas taxes.

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Until another DEDICATED source of transportation infrastructure revenue is GUARANTEED, the only real, viable option is to raise the gas tax. I can't put a price on a single life, let alone multiple lives, so closing the massive funding gap that began in 1981 with Ronald Reagan is of utmost importance; we can't have another bridge collapse due to deferred maintenance resulting from a lack of funding. We cannot afford to play catch up with our nation's infrastructure any longer.

An important, but separate, issue.

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An important, but separate, issue.

How is the gas tax a separate issue? When the primary source of revenue for transportation infrastructure lies squarely with the gas tax (by a very large margin), there is but one issue.

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How is the gas tax a separate issue? When the primary source of revenue for transportation infrastructure lies squarely with the gas tax (by a very large margin), there is but one issue.

If you read the above "open letter", it has very different motivations for admonishing the next chief executive to increase the gas tax. Those motivations (and the assumptions behind them) are the issue here.

Infrastructure itself is the "separate issue" I'm refering to, we will have to do more on that front damn soon than the gas tax could ever support.

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A small increase seems ok, but continued increases to the tune of 50 cents is pretty ridiculous. At that point I feel it will do more harm than good, as the price of food and other goods that require transportation (so pretty much everything) will increase. Plus, everything that requires someone to drive a truck (not fuel efficient) will also increase, because there is a demand for those things and the people doing them for a living aren't going to want to lose money doing so.

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You are all bastards.

^

Totally agree the goverment gets enough of my money. Do you folks really want to see high gas and GM suffer because of it? Or do you want to kill any kind of performance car? Do you want to hurt people in the transpertation industry? Goverment doesn't need more of our money to piss away. We need more of it. Paying extra for gas because Uncle Sam says so is so stupid! If you want to criple folks like WMJ and many others go ahead. But honestly it should not come from goverment mandates like CAFE that some around here hate or high gas taxes. It should come from consumer demand for different vehicles and alternatives. The private sector needs to do more the goverment less. I can see less lots of problems with a high gas tax. For those of you whom believe it in I am with WMJ, Balthazar and Camino on this one. The goverment needs to learn to make do with less and not more. Hard times are upon us and this will cripple industry and cause job loss. I can't believe people whom are into cars and namely performance ones around here the RWD vs. FWD debate would want such. I think alot of people honestly don't connect a with b or think of anyone but themselfs. Can I afford $3 a gallon gas sure for now but when I was 25 I couldn't. If it hits $6....7......&#036;h&#33; 10 I will be talking differently. People have no idea what happens when taxes on anything or anyone go up. Honestly for any of you that think good will come about from this besides smoother roads and the goverment doing more with alternatives which they should to a certain point then your hood-winked. I think if you honestly agree with this you are smug bastards. Who in the hell gave you the idea that raising taxs on gas is good for folks and people that need trucks to make a living. What a bunch of ass-wholes. This kind of thinking hurts everyone! Including our beloved GM and the big three along with the rest of industry. People should drive what they want and if you want to do a gas guzzler tax that is fine (I wish it wasn't around tho) but a tax on the gas is stupid. Mark my words if either president put this into action I will be writing him and it will kill buisness and not only those that have a fleet of pick-ups.

Edited by gm4life
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I'd be more comfortable with a one time increase than with rolling increases, but I do favor the idea. Once OPEC cuts production because worldwide demand has been dropping we're going to see higher prices again, so we need to do something to encourage investment in alternatives. Offshore drilling would be like pulling a Band-Aid off slowly, raising the gas tax would be more of a tug.

As a counter for truck drivers and others whose job relies on their car or truck, would an increased mileage credit or fuel subsidy make it more palatable? A person who drives 30,000 miles a year while averaging 10mpg would pay an extra $1500/year (or about $29/week) due to a $0.50 increase in fuel tax. A $1500 tax credit would offset this, would it not? Some things would have to be juggled around, but it evens out for the taxpayer and the government gets the benefit of people finally seeing the need for alternatives.

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The best option would be to convert the flat gas tax to a percentage-based gas tax, similar to a sales tax. This would solve two problems: 1) the diminished value of a flat gas tax (the gas tax bought a hell of a lot more in 1965 than in 2005) due to inflation and 2) the need to raise the gas tax to combat inflation-driven diminished buying power. A percentage-based tax would never need to be adjusted to the CPI as its revenue would be based on the fluctuating value of fuel.

A small increase seems ok, but continued increases to the tune of 50 cents is pretty ridiculous. At that point I feel it will do more harm than good, as the price of food and other goods that require transportation (so pretty much everything) will increase. Plus, everything that requires someone to drive a truck (not fuel efficient) will also increase, because there is a demand for those things and the people doing them for a living aren't going to want to lose money doing so.

If you're referring to a truck in the sense of diesel truck traffic, the gas tax is different for commercial vehicles. If you're referring to the average construction worker, or someone else who tends to require pickup trucks, vans and SUVs for their job, then your argument is weak as nothing would stop them from getting a hybrid truck. Hell, give them a tax deduction to encourage a switch to a hybrid truck and I'd be fine with that.

Edited by Croc
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The best option would be to convert the flat gas tax to a percentage-based gas tax, similar to a sales tax. This would solve two problems: 1) the diminished value of a flat gas tax (the gas tax bought a hell of a lot more in 1965 than in 2005) due to inflation and 2) the need to raise the gas tax to combat inflation-driven diminished buying power. A percentage-based tax would never need to be adjusted to the CPI as its revenue would be based on the fluctuating value of fuel.

If you're referring to a truck in the sense of diesel truck traffic, the gas tax is different for commercial vehicles. If you're referring to the average construction worker, or someone else who tends to require pickup trucks, vans and SUVs for their job, then your argument is weak as nothing would stop them from getting a hybrid truck. Hell, give them a tax deduction to encourage a switch to a hybrid truck and I'd be fine with that.

I'm with you my brother from another mother!

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I'm with you my brother from another mother!

We don't say that at our chapter.

But seriously...transportation infrastructure is my field. Thankfully CA is the only state that has a percentage component to the gas tax. It still needs to go all percentage, though...it just doesn't fund anything these days.

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Gas taxes trickle down and have price effects on anything shipped by truck.

If you introduce a gas tax, food prices will go up. Clothing prices will go up. Etc, etc, etc...

The gas tax difference is the main reason why the basic cost of living is lower in the US than it is in Canada.

I've been noticing less and less California produce as the gas prices go up, there's more local Ontario food being sold in supermarkets here. That's part of the effect the gas tax has as well. Expect California farmers to get hit pretty hard by this, as they depend strongly on exports from their state.

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Gas taxes trickle down and have price effects on anything shipped by truck.

If you introduce a gas tax, food prices will go up. Clothing prices will go up. Etc, etc, etc...

The gas tax difference is the main reason why the basic cost of living is lower in the US than it is in Canada.

I've been noticing less and less California produce as the gas prices go up, there's more local Ontario food being sold in supermarkets here. That's part of the effect the gas tax has as well. Expect California farmers to get hit pretty hard by this, as they depend strongly on exports from their state.

So what are you saying, we should just stop funding transportation infrastructure because things may cost more? That's ridiculous. Sure, trickle-down occurs. But with gas low again (who wants to take bets on how long this will last?), and the prices of goods not dropping, what's the deal?

As I already said, CA has a percentage component to its gas tax, and the world didn't end. Prices on basic items haven't skyrocketed, and in fact, my grande iced coffee at Starbucks is cheaper in LA than it is in Indianapolis!

I know this happened back in 2007, but it's important that we don't forget what happens when necessary repairs aren't made because the gas tax hasn't kept up with inflation:

MinneapolisBridgeCollapse.jpg

Is saving $0.13 on that cheeseburger REALLY worth it?

Edited by Croc
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So what are you saying, we should just stop funding transportation infrastructure because things may cost more? That's ridiculous. Sure, trickle-down occurs. But with gas low again (who wants to take bets on how long this will last?), and the prices of goods not dropping, what's the deal?

As I already said, CA has a percentage component to its gas tax, and the world didn't end. Prices on basic items haven't skyrocketed, and in fact, my grande iced coffee at Starbucks is cheaper in LA than it is in Indianapolis!

I know this happened back in 2007, but it's important that we don't forget what happens when necessary repairs aren't made because the gas tax hasn't kept up with inflation:

MinneapolisBridgeCollapse.jpg

Is saving $0.13 on that cheeseburger REALLY worth it?

Your premise is deeply flawed.

Reliance on gas tax revenue to maintain and improve our infrastructure is a proven failure. You are asking for more of the same. To fix the countless substandard, aging, and inadequate bridges, roads, rail systems, dams and so on will take a far greater commitment of resources - one that is long overdue. In fact, the entire practice of tying the gas tax to infrastructure needs to go away. It doesn't work now , and it won't work in the future. It is typical wasteful inefficient government foolishness that is used as leverage to pit the interests of one level of government against another.

The exploration and implementation of alternative fuels, as well as infrastructure maintenance and improvement need to be high priority items not tied to yet another condescending, manipulative, social experiment. We need to get real about this and just fund what needs to be done directly without all of the asinine social engineering politicians are so insultingly fond of.

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>>"It is typical wasteful inefficient government foolishness that is used as leverage to pit the interests of one level of government against another."<<

Nutshelling 101, Instructor- Mr Camino, 3 credits.

Now is the time, economically, to take a deep, harsh look into the grotesque inefficiency of government. There's 100s of billions to be realized. The time where a state, county or federal job is a place to grow one's wallet fat needs to be over. Far too many of these upper positions are still making way too much money for doing mediocre (or downright criminal) work, and we can no longer afford the Wining, Dining & Pocket-Lining Era. The taxpayer is alread being crushed- it's the government's turn to contribute.

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Your premise is deeply flawed.
Then enlighten me, please.

Reliance on gas tax revenue to maintain and improve our infrastructure is a proven failure.
Worked quite well as long as the tax kept being raised to keep up with inflation. Worked well until 1981.

You are asking for more of the same.
No, I'm advocating for a percentage-based tax instead of a flat tax.

To fix the countless substandard, aging, and inadequate bridges, roads, rail systems, dams and so on will take a far greater commitment of resources - one that is long overdue.
Can't disagree there, but where will the money come from? Until you can identify a reliable, alternate source of funds, the gas tax is it.

In fact, the entire practice of tying the gas tax to infrastructure needs to go away. It doesn't work now , and it won't work in the future. It is typical wasteful inefficient government foolishness that is used as leverage to pit the interests of one level of government against another.
Really? It seems to me that it came about as a way for drivers to pay for the cost of roads. If the gas tax were to go away, what would you propose in its place? Drivers use roads, contributing to wear and tear. This needs to be paid for.
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It's more than just the drivers though - every time you buy groceries you are indirectly using the roads. Let's not entirely punish the farmer for that.

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