Let’s Modernize the Gas Tax!

August 30, 2012 by · 9 Comments
Filed under: Car Stop 

This column and The American Conservative Center for Public Transportation have longed promoted increasing the tax on gasoline. Yes, that can be a conservative position, so long as such an increase is balanced by cuts in other taxes, preferably the income tax. As a member of the National Surface Transportation Commission, Paul Weyrich voted for an increase in the gas tax.

But we have gone past that position to promote a particular kind of gas tax, one that would vary according to the market price of gasoline. The goal would be to create a stable, predictable gas price that would rise slowly over time. Adjustments in the tax could not always cover market fluctuations, but they could do so much of the time. If consumers could know what future gas prices would be, they could take that into account when buying a car.

Now, it appears we found an ally in an unlikely place: car dealers! A piece in the NationalJournal.com (“$1 Gas Tax? One Auto Dealer Says, ‘Yes, Please,’ “) dated August 9, 2012, quotes the owner of an automobile dealership in LA, Mr. Peter Hoffman, as saying, “A lot of our industry has been saying, ‘Put a progressively increasing price on gasoline.’ “

Mr. Hoffman’s reasoning is the same as ours, with the difference that he is looking at it from the standpoint of a car salesman and our perspective is that of car buyers. Both need the same thing: predictability. The National Journal says, “What Hoffman wants most . . . is market certainty – – the ability to plan.”

Car dealers are caught in a whipsaw of fluctuating gas prices. When prices rise, people want small cars that get good gas mileage. So car dealers order lots of them. But then the price of fuel drops and the small cars sit unsold as customers demand SUVs. The dealer orders SUVs but then the price of gas soars again and they don’t sell. He can’t win.

The National Journal says Hoffman and this Center are not alone:

Hoffman is one of a growing number of car dealers who advocate the same solution to the problem: raise the gas tax, enough to create consistent, predictable demand for fuel-efficient cars . . . One way to do this, says automakers, would be to create a new gasoline price floor – – a point below which prices won’t fall.
“it allows the population to plan. It allows automakers to plan. It allows us to plan, “ Hoffman says.

Now all we need are some politicians with the guts to go forward with the idea. How about you, Rep. Ryan?