In this blog we will be debating both sides of the story. We invite you to take a look at the information we’ve found for reasons to be against increasing the Federal Gas Tax and reasons to be for increasing the Federal Gas Tax. For some more background information on the Federal Gas Tax, please feel free to visit the USDOT Federal Highway Administration’s website for a comprehensive history of the Federal Gas Tax.
The Gas Tax
5 UMN students discuss the pros and cons of raising the gas tax.
Friday, March 25, 2011
Should The Federal Gas Tax Be Increased?
In this blog we will be debating both sides of the story. We invite you to take a look at the information we’ve found for reasons to be against increasing the Federal Gas Tax and reasons to be for increasing the Federal Gas Tax. For some more background information on the Federal Gas Tax, please feel free to visit the USDOT Federal Highway Administration’s website for a comprehensive history of the Federal Gas Tax.
Thursday, March 24, 2011
The Gas Tax and the Environment
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The Gas Tax, Energy Independence, and the Middle East
The Gas Tax, It's Purchasing Power and Our Economy
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Greg Mankiw, a professor of economics at Harvard University suggests that a one-dollar increase in the gasoline tax would generate $100 billion dollars in revenue in just one year. Not only could an increase in the federal gas tax greatly help repair our roadways, but it could also help pay off the deficit and economic bailout currently facing the US government. As these bailouts are used to stimulate the economy, hopefully they would be able to more than offset the impact of high gas prices would have on the economy. It is possible that these bailouts could create more jobs, make tax cuts for businesses, and reduce the demand for fossil fuels by increasing public transportation and increasing research on new sources of energy. If spent correctly, this gas tax should in fact give a boost to our economy.
Increasing Gas Tax ≠ Increasing Consumers’ Burden
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concerns of increasing gas tax are increased burden of consumers and hence
hurt the economy. Americans are generally opposed to raising the federal tax
on gasoline, but a majority would support a gasoline tax increase if they knew
the money would be used to reduce global warming or to lessen United States
dependence on foreign oil, according to a New York Times/CBS News poll
conducted in late February 2006.
Economists Urge Lower Income Taxes to Offset Gas Tax Increase
According to The New York Times, many mainstream economists believe
that the best way to reduce gasoline consumption is by raising the gas tax
significantly—perhaps $1 per gallon over five years—while lowering income
taxes to offset the added cost. The goal would be to force people to drive less
because of the increased cost of gasoline, but to reduce the overall financial
impact with the offset, which many economists believe would actually improve
things for most low- and middle-income people.
While many economists may support the idea of offsetting a gasoline tax
increase by lowering federal income taxes, people who responded to the poll
were not wild about the idea. Only 28 percent said they would support a gasoline
tax hike if their income taxes or payroll taxes were lowered to provide an offset.
Even so, many experts believe raising the federal gasoline tax could go a long
way toward reducing America’s gasoline consumption.
Raising Gasoline Taxes Would Lower Gasoline Consumption
According to Severin Borenstein, director of an energy institute at the University
of California, Berkeley, a 10 percent increase in gasoline prices would reduce
consumption by 6 percent to 8 percent over time.
On the other hand, if the price of gasoline went down, people would be less likely
to buy fuel-efficient cars, relocate to be closer to their jobs, or look for other ways
to reduce their commute, their use of gasoline and, ultimately, the greenhouse
gas emissions that contribute to global warming.
Source: http://environment.about.com/od/environmentallawpolicy/gasolinetax.htm
Critique for Julia Anderson
and demand in gas. As price goes up, people decrease gas consumption and
therefore price of gas will go down. Then demand of gas may go up again but
will maintain at a certain level as the price reaches equilibrium. Because of the
tax control, gas demand can be controlled and consumers get less hurt by the
increasing crude price as they lessen their dependence on gas.
As far as raising price and using part of the tax revenue to pay for roads damage,
I think it makes perfect sense to me. Gas is a necessity and a large portion of
gas demand won’t change because of the raising price. Therefore, there is no
worry for the huge drop of gas consumption, which has no effect on collecting
money for road maintenance.
One of the New York Times articles mentioned that two
senators have called for a 25 cent rise in the federal gasoline tax to pay for road
and bridge construction and maintenance and debt reduction. They suggest that
10 cents of the increase go toward paying down the debt, and the rest toward
transportation infrastructure. This indicates that a significant portion of tax income
will be used to cover debts, which will help the economy to recover.
As far as the job loss, I wonder how the statement “Initial losses of over 154,000
jobs by the end of 2011, not only in the energy sector but across the whole
economy” is deduced. I can’t this huge shock to employment rate because of
25 cents increase in gas. Meanwhile, raising gas tax creates job opportunities
as part of tax income is used for road maintaintence. If we want the economy
to rebound, we must increase investment in our transportation system. We are
faced with the decision of paying now, or paying even more later. Every $1 spent
now to keep a road in good condition prevents spending $6-$14 to rebuild the
road once it has deteriorated. There are other alternatives the government can
use to support small business, using the gas tax income. Therefore, I think the
actually effect of gas tax is not as server as mentioned in the second article you
quoted.
Wednesday, March 23, 2011
Anti-Gas Tax
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As gas prices are soaring, many people are wondering where they think we are getting the money to pay for this! It seems that the gas prices continue to rise. Although we know that with the gas tax increase many Americans will be pushed off the roads because they just cannot afford to drive. There are many that will just tighten their budget on other things so that they can still drive.
The first thing that the gas tax affects is the economy. Not only does it take the money away from me by having to pay more for gas, but it increase the amount of we will have to pay for everything else. For example, there are many small businesses that rely on transportation in order to make their business run, how do stores and restaurants get their food? Most of them are delivered by some sort of truck, and of course, these trucks will have to pay more money for gas just like us. This means that the prices of the food we get there, the clothing stores etc will also have to go up. So, we pay more money for not just gas, but many other things.
The gas tax will also affect the government. In an article on the New York Times, Kate Galbraith wrote, “Yet for governments, the trend has a distinct downside: their fuel-tax receipts will dwindle, because drivers will buy less gasoline.” The government thinks that they will be making money, but it will be hurting them. It also will affect how people choose their leaders. The stance on the gas tax may be an issue that will be addressed now as part of a political campaign.
These are some of the points that we hope to hit in this blog! More may come up or we may not get to touch on all that we want, but hopefully this gets you thinking about how the gas tax will affect you!