The latest scuttlebutt in Washington surrounds President Obama's bipartisan debt commission and the group's initial recommendations. I will leave most of the analysis of the recommendations to those with real fiscal and budgetary expertise, but I did find one of the recommendations interesting: an increase in the federal gasoline tax.
A proposed 15 percent increase on the federal gasoline tax is one of the many unpopular recommendations made by commission co-chairmen Alan Simpson and Erskine Bowles. Nobody likes the idea of an increase in the gas tax. No one likes the idea of any increase on any taxes. It is no surprise that the politicians recommending it are no longer courting voters.
Robert McTeer summed it up perfectly in a blog post on Forbes.com: “I’m sure I won’t like many of the proposals, which matters little. The commission won’t either, which matters more.” McTeer’s point is that the commission’s recommendations may, at the very least, spark some conversations.
The gas tax conversation is interesting for a few reasons. First of all, Simpson and Bowles want to use the increase to pay for maintenance and infrastructure improvements over the next several decades. AOL estimates that would increase by $117 the amount the average American, driving a car with a 15-gallon tank, spends on gasoline in a year. As far as construction costs go, The Hill reported last week that the Congressional Budget Office estimates the federal highway trust will need an additional $34 billion in the next six years.
What is unclear is if Simpson and Bowles considered that in the coming decades, more and more vehicles are likely to be running on alternative fuels. Furthermore, the ones that still use gasoline are likely to be using less. I imagine the need for highways and bridges is the same regardless of whether a car runs on gasoline or not, but will an increase in a decreasingly used energy source really make a difference for the nation’s bottom line?
It will be interesting to see if the commission recommends the tax increase for whatever fuel is used — gasoline or alternative.
Another consideration is whether Simpson and Bowles think a gas tax will change peoples' habits. Will Americans drive fewer miles? Will they buy alternative energy vehicles? If this is the case, will there be new revenue generated from the resulting boom in the clean vehicle industry? Will there be a savings for the nation as carbon emissions decline?
Who knows? I certainly don’t. And like I said, I’ll leave the real analysis to the folks who can do math. I’ll stick to the talking and the pondering — after all, it seems that’s the least the commission would want to result from its initial recommendations.
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