A small gas tax could provide the spark our economy nee... A small gas tax could provide the spark our economy needs (diaper, Flickr).
As much as it pains me to say this: America needs a $1 a gallon gas tax.

And right now would be the perfect time to start. Vote, pass, sign. Please.

This gas tax could rebuild America, create jobs, help the auto industry, improve the environment and do something no politician likes to do: Pay as you go.

Last week, the Congressional Budget Office released a report that said if car-makers meet the government regulated fuel efficiency standards, the government will lose billions and billions of dollars in gas tax revenue.

Please take a moment to relish the irony of unintended consequences.

You see, higher fuel standards mean people buy less gas, which may curb America's addiction to oil, but doesn't curb our government's addiction to money.

The CBO points out that by 2025, the federal government will lose $57 billion in tax money. This, any government official will tell you, is bad. Worse yet, for the past 10 years, the government has been collecting less money than it spends on the nation's roads. This, most motorists and their tires and suspensions will tell you, is bad.

Currently, the government gets 18.5 cents for every gallon of gasoline sold. That money is supposed to go the Highway Trust Fund, where the cash is doled out to fix highways and supplement mass transit projects, minus a few dollars of overhead and handling fees for the Department of Transportation.

But that amount was set in 1993, nearly 20 years ago, and it obviously needs to go up, if simply adjusting for inflation. I say, round it up to exactly $1.

The time is right

While I hate the idea of giving government a nickel more than it needs, right now is a golden opportunity to raise the federal gas tax. It is easy enough to implement.

Raise it 10 cents every year for the next 10 years, or 25 cents every year for the next four years. A bold politician might raise it the full dollar right now.

I promise, nothing catastrophic will happen. The world will not end. Z mbies will not roam our streets. Doomsday forecasters will gleefully sit in their bunkers and proclaim over ham radios that they were right. Gas will just cost a buck more than it does right now. We'll get over it. We're Americans, and we don't remember anything prior to last fall's TV lineup.

In fact, a recent study by Autotrader.com found that more than 70 percent of drivers said they wouldn't change their buying habits for a new vehicle unless gasoline went above $5 a gallon or higher. At current prices, gas prices wouldn't go that high with with the tax, except in a few quarters of the country like the area around Disneyland in Florida. And we could always tell the people gassing up there that the higher gas prices are just part of the European experience at Epcot Center.

The CBO says that just raising the current tax 5 cents would cover the future deficit for highway work. But that's not enough. It never is.

People know gasoline prices are going to continue to go up. They're ready for prices to climb. Forcing the price of gasoline higher through a tax could significantly change consumer behavior. People will drive less, and they'll carpool more. They'll find innovative ways to work around higher gas prices.

A tax could help sell more cars

Furthermore, a gas tax would push some people into new, more fuel-efficient vehicles. The evidence is very clear that when gas prices go up, people buy more efficient cars. When gas prices drop, sales of those cars dip. So, jack up the prices of fuel and open dealerships 24 hours a day. There's lots of iron to move.

Additionally, a real gas tax – I recommend calling it an oil-based revenue stream – would create an environment that makes the Corporate Average Fuel Economy rules make sense. Right now, CAFÉ is one of the most idiotic, nonsensical regulatory mess of rules on the books. It penalizes an automaker for building a good pickup, truck or SUV.

Paying for our future - today

Our changing transportation modes in the future require massive cash injections. Cities from Maine to California need to overhaul their public transportation systems (something that should be done before anyone rolls out the pipe dream that is high speed rail), and infrastructure repairs are desperately needed on our nation's roads, highways, bridges and tunnels.

Our nation is literally falling apart before our eyes. It needs to be fixed, and it needs to be paid for by the people using it. A gas tax will actually mean when a dollar of work is done, there's a dollar waiting to pay for it. A novel idea, for sure, but one worth exploring.

And note, the $1 gas tax would not apply to diesel. This would push more consumers into clean-diesel cars (more efficient vehicles), create a growing market for diesel vehicles (new car sales) and help the environment. Not taxing diesel would also keep prices down on many consumer goods. While many people don't realize it, diesel is the real lifeblood of America, not chocolate sauce. It builds our buildings, grows our food, and delivers all of those things people buy every day in big-rig trucks.

A gas tax makes sense. And with consumers already thinking gasoline prices are going to climb higher, they're prepared for it. So why not, for one time, have the government go out and give people what they want, what they expect: higher gas prices.

Of course, it won't happen. No politician if either party wants to sign on for a deeply unpopular gas tax. Republicans are bound by their no-new tax pledge made to Grover Norquist's Americans for Tax Reform. And even Democrats are afraid to endorse a tax that motorists are reminded of every time they go to the pump.

The idea did not fly at the start of the Iraq War after the terrorist attacks on 9-11 when the country's patriotism was running highest. It has less of a chance now.

But the government desperately needs the money, and this is one tax that people who don't want to pay it, don't have to.

They can walk, ride a bike or ride the train, where ever that is available.


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  • 34 Comments
      • 2 Years Ago
      We have plenty of gas to go around and cheap, most of our gas goes to the military. and gas companies are getting richer and richer, and we the poor and middle class feel it when we have to fill our gas tank. outragious.......
      • 2 Years Ago
      Oh sure, let's just engineer markets to magically fix everything. That's work oh so well in the past. Facepalm.jpg this author is an authoritarian, "gov't is our salvation", clown.
      • 2 Years Ago
      everyone who has commented is an idiot. except me and im in highschool. the gov needs to do this. i mean really how the hell do you think the gov pays for everything. and the vharvsr guys comment. i didnt think anyone could be the stupid. look up inflation. it is not good for the gov to just print money.
      • 2 Years Ago
      Some people are IDIOTS
      lenny87brown
      • 2 Years Ago
      Raising the tax only if the cost of gasoline goes down. Higher gas prices obviously hurt the lower middle and lower classes disproportionately. They drive farther to work and farther to modest entertainment. And they can ill afford to hop on the Prius of the month club just for greening their public image.
      • 2 Years Ago
      Scott do us a favor and move somewhere else. You don't belong in the US!
      • 2 Years Ago
      Am I the only one that understands this? The government does not need our money. They create money on a printing press. They never needed tax money from us. If the government stopped taxing folks, who do you think would pay the government's bills? The government would create money on a printing press as they do now and pay their bills. This notion that more taxes are needed to finance a government that prints money as needed (prn) is stupid. Cities are going bankrupt not from lack of taxes, but lack of common sense. Governments local, state and national in this country are writing hot checks that their citizens can no longer cover. Time for big spending governments to come back to the fold. We individuals are making ends meet, with what we have and that is it. Want to stimulate this economy? Give the people tax breaks. The government can just print money to fund the tax breaks. The government can dissolve debts, with a stroke on a computer keyboard. It is so simple. Why tax, when the opposite is needed? People need the money to flourish not the government. Give the people tax relief, and watch government run business as usually. Never hurt them(government) before. They can wipe out all debt, with the stroke of a pen. This taxing just to be taxing is just plain stupid and dangerous in a country, with high unemployment, 45 million plus people on food stamps, cities going bankrupt, food prices rising(farming with high priced fuel yeah that's smart huh), from massive drought in the mid west, housing sector collapse (the only game in town), and a congress that cannot stop spending (no need for more taxes they just keep printing money). So your idea, of tax on fuel is really counter productive to this current economy; moreover, if our economy follows the Japan's economic malaise for the last twenty years, a ten cent a year tax increase on fuel will definitely create a hardship on families in this country. Not thinking there huh? I do not think you thought this through, before you put pen and ink to paper did ya? Back to the drawing board for you!!!!!!!!!!!!!!!!!!!!!!!
        • 2 Years Ago
        This is by far the dumbest thing I have ever witnessed. Everyone who reads this now dumber.
      Pantino4
      • 2 Years Ago
      obsurd
      • 2 Years Ago
      You cannot tax your way to prosperity.
      Erma
      • 2 Years Ago
      just as Charles explained I am amazed that some people can profit $8024 in a few weeks on the computer. have you read this page...MakeCash12.com
      igotzzoom
      • 2 Years Ago
      If the federal government were a better steward of our resources, I'd be in agreement with you. But they have shown themselves to be quite the opposite. Besides, what's to stop them from plundering gas tax revenues to pay for other pet pork-barrel projects? Once we get our federal spending down to below 20% of GDP, and start making some meaningful headway on our $15+ trillion debt, then I'd be willing to consider this, but not until then.
      • 2 Years Ago
      No, we don't need a dollar a gallon gas tax now because we can barely afford to pay for gas now as it is. What a stupid idea.
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