Gas taxes and your bottom line
Many industries rely heavily on time in their vehicle, not just truck drivers and delivery trucks. Sales professionals hop in their vehicles throughout the day, as do many other types of professionals (service providers like plumbers, and so forth). For that reason, gas prices and taxes are a relevant line item that must be budgeted for 2015, but with politicians making the rounds to push for higher gas taxes, budgeting becomes more complicated.
Gas prices are down roughly 50 cents per gallon compared to a year ago, which some analysts say have contributed to more money in consumers’ pockets. Some believe that this will improve holiday sales, but others believe the timing is just right to increase federal taxes on gas. The current tax on gas is 18.40 cents per gallon, and on diesel are 24.40 cents per gallon.

Supporters and opponents are polar opposites
Supporters argue as follows: gas prices are low, so it won’t hurt to increase federal gas taxes, in fact, those funds must go toward improving our infrastructure, which in the long run, saves Americans money because smoother roads mean better gas mileage and less congestion.
Gas taxes have long been a polarizing concept, and despite lowered gas prices, the controversial nature of the taxes have not diminished.
While some are pushing for complete abolition of federal gas taxes, others, like former Pennsylvania Governor, Ed Rendell (D) tell CNBC, “Say that cost the average driver $130 a year. They would get a return on that investment” in safer roads and increased quality of life, he added.
The Washington Post‘s Chris Mooney points out that federal gas taxes have been “stuck” at 18 cents for over 20 years, last raised when gas was barely a dollar a gallon and that the tax must increase not only to improve the infrastructure, but to “green” our behavior, and help our nation find tax reform compromise.
Is a gas tax politically plausible?
Mooney writes, “So, this is not an argument that a gas tax raise is politically plausible — any more than a economically efficient tax on carbon would be. It’s merely a suggestion that — ignoring politics — it might be a pretty good idea.”
Rendell noted, “The World Economic Forum, 10 years ago, rated us the best infrastructure in the world,” adding that we “need to do something for our infrastructure, not in a one or two year period, but over a decade.”
Others would note that this rating has not crumbled in just a few years, that despite many bridges and roads in need of repair, our infrastructure is still superior to even the most civilized nations.
Regardless of the reasons, most believe that Congress won’t touch this issue with a ten-foot pole, especially leading up to another Presidential campaign season starting next year.
“I think it’s too toxic and continues to be too toxic,” Steve LaTourette (the former Republican congressman best known for his close friendship with his fellow Ohioan, Speaker John Boehner) tells The Atlantic. “I see no political will to get this done.”
Whether the time is fortuitous or not, and regardless of the positive side effects, many point to a fear of voters’ retaliation against any politician siding with a gas hike, so this matter going any further than the proposal stage is unlikely.
jp moses
August 11, 2007 at 9:41 pm
I’d also suggest you add to your list to create a short list of trustworthy real estate investors – folks who are interested in buying preforeclosure, who can treat the transaction with integrity, close quickly with cash, and help the clients your short sale team works with to make their exit sooner rather than later. Seems like a great compliment to the short sale strategy.
…jp
Michael Cook
August 13, 2007 at 8:06 am
I think this is an interesting theory on the surface. Unfortunately, many “bubbles” are caused by real valuation issues that exist in the market. The tech was obvious and I think the mortgage issues have been long overdue. I think a better theory might be to examine the event that triggers rationality. As prices get more and more out of whack, the likelihood of a trigger event becomes very high. This could be a bad economic report or a slow down in growth, that then tailspins.
To say that there is no problem or that there is an easy fix to a problem that has been growing for years is a bit too simplistic.
B. R.
August 13, 2007 at 10:16 am
I responded with a new post by Ben Stein. Fear is a very real thing and drives people to do very insane things.
You and I are talking on two totally different levels. You’re yelling for the lenders, I’m simple telling you what it’s like here on the ground in residential. Obviously if you’re heavilly invested in subprime, you’re maybe ready to jump off of a building, but the overall hit the markets will take is still a drop in the bucket by almost all accounts of folks in the know. But the minute I see what you see down here, I’ll let you know.
Erik Hersman
August 13, 2007 at 11:41 am
Ben, this was one of my favorite posts in a long time, not just for this week’s carnival.
B. R.
August 13, 2007 at 12:10 pm
That means a lot, thanks so much.