As Gas Prices Plunge, New Gas Taxes Proposed

Heading into the weekend, I filled up my tank for less than $20 for the first time in over a decade. It was surreal. I recall, in my younger and poorer days, routinely putting five bucks in the tank to get through the week on a partial fill. Six months ago, five bucks couldn’t get you two gallons. Yet, here we are, back to the good old days.

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But before it gets too easy to work and raise a family, politicians are lining up with proposals to hike state and federal gas taxes. In Minnesota, Democrat Governor Mark Dayton is looking to supplement the existing 28.5 cent per gallon tax with an additional “wholesale gas tax” that would kick in as a percentage (like sales tax) when the pump price hits about $2.15.

Not to be outdone, and doing his best to forward the increasingly popular notion that no difference exists between the major parties, the incoming Republican chairman of the Senate Commerce, Science and Transportation Committee told Fox News Sunday that a federal gas tax hike is on the table. From the Associated Press:

Sen. John Thune of South Dakota says all options must be looked at to fill an enormous shortfall when the existing highway legislation expires in May.

Gas and diesel taxes haven’t risen since 1993, resulting in perennial shortfalls in the fund that pays for most road projects.

Several commissions have called for raising the taxes, but Congress has been reluctant. Instead lawmakers have dipped repeatedly into the general treasury to keep the trust fund solvent.

The chatter around Governor Dayton’s proposal boasts similar rhetoric. Roads and bridges are in tough shape and getting worse. It’s projected that far less revenue will be raised through current taxes than that needed to maintain, let alone improve, the current infrastructure. The only rational option is to raise taxes, we’re led to believe.

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But is that really the only possible approach to the problem? Couldn’t we cite the same scary stats to argue for something like – I don’t know – prioritizing existing spending to focus on infrastructure instead of the gazillion other things that government wastes money on?

Governor Dayton presides over a state which will spend $63.6 billion this year alone. He says he wants an additional $6 billion for transportation over the next 10 years to “cover existing needs.” That translates to $600 million per year. We can’t shave $600 million from a $63.6 billion budget? That’s less than 1%. We’re going to raise taxes on everyone in the economy rather than divert less than 1% of the budget to transportation? Really?

(Today’s Fightin Words podcast is on this topic available here.)

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