States to drop gas taxes?
With gas prices rising politicians in states like Maryland, South Caroloina, Connecticut, Georgia, New York and Nevada are considering reducing or even eliminating their state's gas taxes to ease the burden on the average citizen. This seems to us like a shortsighted solution designed more to curry favor with voters than actually ease anyone's financial burden. As the article from The Detroit News points out, state and federal gas taxes are levied when retailers buy their gas from distributors, so there's no guarantee those savings would be passed on to consumers instead of just being absorbed by retailers.
Add to that the fact that most state budgets have been operating at or near deficit levels and reducing or eliminating a major source of income seems like an idea that will lead to more potholes and less teachers in public schools.
Check out the article and let us know in the comments whether or not you think repealing state gas taxes is a good idea.
[Source: The Detroit News]
Reader Comments (Page 1 of 2)
Howard Kerr 7:06AM (5/13/2006)
I read what is essentially this same news item on the Op/Ed page of my hometown 'paper's website. They made a pretty good argument for keeping the state's share of gas taxes in place until the writer goofed and said something to the effect that since gas prices were rising, the state was collecting MORE in taxes. I always thought that the tax on a gallon of gas stayed the same, no matter what the price is. If the price goes up or down, doesn't the tax stay the same, unlike pretty much every other taxed consumer good...where the amount collected in tax goes up with the price? Besides, when the price of gas hits a (temporary) ceiling, people will buy less of it, until the price falls back to a (perceived) comfortable level. I can't imagine anyone not realizing this.
The Op/Ed piece also mentioned that my home state had more miles of roadway than any other state (which I don't believe), and no...I don't live in Tx. or Ca.
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Steve 7:28AM (5/13/2006)
I've never met a tax that should not be repealed. The dozens of taxes on our phone bills, utilities, airline tickets, etc., etc., not to mention income taxes, sales taxes, gasoline taxes and inheritance taxes make it more and more difficult for young families to survive, and often force both parents to work, when children most need a parent at home (studies show that the first five months of our annual income goes to our state and federal government). A 10% federal income tax and a 2% state tax could cover all of our real needs, and all other taxes should be repealed. Additional taxes should only be levied on politicians and their fundraising income.
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Viktor 8:50AM (5/13/2006)
It's just not fair.. :(
//European
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Chris Adams 8:55AM (5/13/2006)
Some states levy a fixed amount per gallon of fuel. Other states, including New York, levy a percentage based on the going price of fuel. The end result is the states such as New York currently seeing windfalls because of how the math works out.
Agree that people need to get more fuel efficient cars, and keeping the prices high would prompt people to pull their heads out of their a$$ the next time they buy a new or replacement car.
OTOH, the method of levying gas taxes should be the same everywhere.
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Edsel 9:05AM (5/13/2006)
I'm with you Steve (#2). Historically, government makes more on a gallon of gasoline than any other entity in the supply & distribution chain. Gasoline stations are a "profit center" for our colossally bloated government bureaucracy.
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Koba 9:24AM (5/13/2006)
I believe in only one tax, the progressive income tax. Gasoline taxes hurt poor people since they end up eating a larger percentage of their income than wealthier folk. This coupled with the fact that in many smaller cities the public transit system is woefully inadequate, almost forcing many people to drive just to save a few hours a day. Nothing will change, gas tax or no gas tax, the rich will get richer, and the poor poorer, no matter how much the govt. taxes gas. Hell, they would probably just start taxing tires instead.
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Rob Lowe 9:28AM (5/13/2006)
Americans love to whine. They kill a hundred thousand innocent civilians in Iraq and then they changed their mind about. Same with gas prices. Eight percent of the worlds population uses 25% of the worlds energy, they pay half of what almost everyone else in the world pays for gas and they're in an uproar about it.
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David Lazarus 9:31AM (5/13/2006)
Some years ago it was reckoned that every cent on gas tax would raise a billion dollars federally that could be used to eliminate the deficit and would also reduce the trade deficit at the same time. The US needs to think longer term, once the oil hits $100 a barrel then the US will suffer far more than any one the other G8 countries. At that point the US economy will free fall and the you will be in a far worse position than you could have been. The tax should reduce imports and sustain your economy far better than relying on cheap oil.
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Razib Ahmed 10:07AM (5/13/2006)
At this moment, cutting tax on gas is surely a good thing to do as it would benefit every consumer. HOwever, it is upto the government to ensure that the benefit of the tax cut reaches to the consumers. Otherwise, it is useless and would hurt the common people.
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John 10:48AM (5/13/2006)
I say use it all up! I don't care. I can resort back to the old days before there was gasoline. Most, still have our legs and feet, there are still bicycles and I know I could survive without it. Although millions would probably die without it because most couldn?t cook their own food let alone grow it. And others would probably die just from the lack of hot commodities that they love so much. But don?t let the government fool you, they are working on things right now that haven?t even been mentioned at all that will take the place of heating oil, natural gas and crude oil. However while they can still get a few Billion extra dollars in their pockets they will. I say fight back, boycott gasoline prices or at least do everything you can to use less, buy a motor cycle, scooter, hybrid auto or ride a bike.
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rem83 10:53AM (5/13/2006)
raise the gas tax. i'm sick of trying to look over/around suvs in traffic. also, higher gas prices motivates alternative energy research, and the implementation of current alternative energy technology, like hybrid buses and utility vehicles. gas isn't getting cheaper, it's about time for everyone to accept that and start looking for solutions.
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Gus Hall 11:26AM (5/13/2006)
It's terrific to see so many forward thinking posters embracing progressive revenue streams and regulated life-styles. Perhaps one day, every man, woman, and child will posses equal societal benefits regardless of their abilities.
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Dave Carlson 11:43AM (5/13/2006)
Stupid idea. If anything, governments should RAISE the gas tax. I guess most people really don't understand basic economics. If you raise the price of a good, demand goes down. If you lower the price, demand goes up. If you want more big SUV's on the road, cut the price. If you want to be less reliant on Arab states, raise the price. BTW, any cut in the gas tax will, at least partially, go to the benefit of the gas producers or sellers, as opposed to the buyers.
Not much more complicated than that.
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alex 12:12PM (5/13/2006)
if you want people to buy cars with better average mpg, raising the taxes would be the wise decision. the extra money coming in should be used to give people alternatives by improving public transport and investing heavily in short and midterm alternative fuels to make us independent from foreign oil imports - rather sooner than later.
Lowering taxes will have the opposite effect: people will keep buying gas guzzlers as they can still afford them!
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scot murphy 12:15PM (5/13/2006)
If you want to save money on gas slow down. Everybody is still driving 90 mph using up a ton of gas no matter what you drive. If people just change the way they drive a little they could save money,
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blurger293 12:57PM (5/13/2006)
Let's drop all taxes. Yay for shortsighted knee-jerk reactions!
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md 12:58PM (5/13/2006)
It is not the government's place to tell people what they want them to drive. We have freedom of choice in America, and people have chosen to use gas in excess. Don't like it? Tough shit, nobody will ever like everything the free market dictates. If you want to buy a high mileage vehicle, nobody is stopping you, but you cannot tell other people what to buy.
Whenever the govenment tries to step and manipulate the economy to try and please the knee-jerk reactions of the populace, it tends to have a less than desirable effect.
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brian 1:22PM (5/13/2006)
In response to other's economic theories--let me give you the real one. The one exception to the rule of supply and demand is the rule of product elasticity. Most products truly have an elastic demand, that is if the cost goes up, the demand goes down, and vice-versa. However, gas is unique, in that it has an inelastic demand, which basically states that regardless of price, the demand will stay the same. There are very few products that have an inelastic demand, but gas is one of them.
Therefore, I say, reduce the taxes so that we can save some money for when the price does go up, we have that money to spend, as our demand will not drop.
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gbh 1:25PM (5/13/2006)
I'm not a big fan of taxes, our government (especially as of late) spends money like a sailor on shore leave.
I am curious though where we are going to get the money to repair our crumbling infrastructure. The government has been raiding a good chunk of highway funds for years, and tossing them into general revenue crap. Instead of spending that money on roads and bridges, like it was meant to be, it's funding somebody's pork barrel project. Ugh.
So if we cut the gas taxes, where's the funding? We have some of the lowest gasoline taxes in the world. We also have a vast array of roads and bridges that are falling apart.
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Buck Futter 1:27PM (5/13/2006)
Last August, the state of Florida dropped its gas tax for a month in order to ease the burden on the consumer. The lower prices were reflected across the state and not absorbed by the gas stations.
Rob Lowe, if you don't like the amount you're paying for gas in your country, then complain to your government about the fact that it artificially doubled the price of gas by taxing it too much. But of course, mouthing off about America is easier. Get a life.
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