Should the Gasoline Tax be Raised?
1. Some people believe that reducing dependency on foreign oil, help the environment, decrease the government deficit and all those things can happen if the federal government increases the gasoline tax. But the proposal is not supported by everyone. At the mention of a tax increase, the general public revolts. Many people do not like to pay taxes, so any suggestions for a tax increase are strongly opposed. The federal gasoline tax topic is actual in the United States today. With the growing concern about global warming, an increased tax could help by reducing pollution and reduce our dependence on oil and to finance alternatives. An increased tax could also make the United States more energy independent in the long run, but American drivers would be hurt by a higher gasoline tax in the short run. The purpose of this issue paper is to analyze whether the federal gasoline tax should be raised.
2. First at all lets go through some history. The first federal gasoline tax was adopted in 1932 at a level of one cent per gallon. The tax has increased in small amounts over the past 75 years. In 1951, government raised the tax to 2 cents per gallon to raise additional funds for the Korean War. The federal gasoline tax doubled in 1959 to 4 cents per gallon to assist in funding the construction of the new interstate highway system in the United States (Williams, 2005, para. 2). The next increase was in 1981 to 9 cents per gallon. An 18.4 cent per gallon federal gasoline tax increase in 1993, which is the current level of the tax.(Tax Foundation). To help understand how an increased gasoline tax might affect American society, one can examine what is occurred in Europe. Many European countries tax gasoline heavily, up to 75 percent of the price of a gallon of gasoline (Lehrer, 2000, para. 14). This tax has been around for many years but has attracted more attention as gasoline prices rise. The high tax is not widely accepted as prices exceed seven dollars a gallon in some places in Europe (Ford, 2005, para. 2). As the price of a barrel of oil continues to rise, gasoline prices also rise and more people are speaking out against the high gasoline tax in Europe. Demonstrations are occurring in several European countries and protestors also felt that the government is not using the revenue strictly for road maintenance and to compensate costs to the environment but instead using the money to fund pet projects. (North, 2000, para. 17). The gasoline tax has had some positive effects in Europe that many people overlook. European car manufacturers are producing more fuel efficient cars because the public is demanding this type of car. According to a study by an International Energy Agency in Paris, the average light duty vehicle in the United States gets 21.6 miles per gallon while a similar car in Europe achieves 32.1 miles per gallon (Ford, 2005, para. 5).
3. For decades, the excise tax on gasoline and diesel fuel has been the main source of funds for building and maintaining the nation's roadways. It has paid according to the Federal Highway Administration for 4.05 million road miles currently in service. But how will our nation pay for this expenses when "The federal tax was 18.4 cents a gallon in 1993, and it still is today even though the price at the pump has increased from little more than $1 per gallon to about $4 a gallon during that time.." (Totty, M.). Also with high gas prices, people start buying more fuel efficiency vehicals. That is mean, that people with more fuel efficiency vehicals can drive more miles for the same amount of gas. And this leads to decreasing revenue on gas tax. "Road construction will only become more expensive. And Congress hasn't raised the gas tax in almost two decades because of political pressure and games."(Wisconsin State Journal). In other hand "Even if Congress will raised the gas tax, it still wouldn't do the job because more and more vehicles are going to be powered by batteries and alternative fuels."(Wisconsin State Journal).
Here same positive reasons why Gasoline tax should be raised:
Reduce U.S. dependency on foreign oil. It will give more stability to economy. increase revenue.
With the huge budget deficit, raising Gasoline tax migth be used for increase revenue for the government and this can be used to start covering the deficit currently facing the U. S. government. innovative technology.
The increased gasoline tax would cause manufacturers to develop new technology to get the best mileage possible to attract the most consumers.
In other hand, here same negative reasons why Gasoline tax shouldn't be raised:
Increased prices of other goods
It's highly possible that consumers will see an increase in the prices they pay for goods. Shipping companies will have to raise their prices to cover the increased cost of gasoline. Manufacturers and retailers in turn will have to raise their prices to cover the increased cost of shipping. Consumers then pay a large share of the price increase by buying goods.
Unfair Burden
Abviously that the households in rural areas with no access to public transportation will be hit hard by an increased tax than urban households that have access to public transportation.
4. In my opinion, an increased gasoline tax seems like a good idea. but i think that this idia will become more real if political leaders will be persuasive in explaining the greater good that may be accomplished. Educating citizens on the purpose of the gasoline tax would help increase the acceptance of the tax. Also would be great if that additional revenue which gained from increased gasoline tax will be used to reduce income taxes in a progressive manner.