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.
Bruce Lemieux
June 13, 2011 at 8:08 am
These two guys do a terrible job of explaining and arguing the merits of their counter-proposal. If I understood them correctly, it's bad to have the banks keep a 5% stake in loans that don't meet QRM guidelines of 20% down plus other stuff. Instead, they argue for lower down payments and MIP to cover the additional risk. Seems logical to me this would raise the cost of a loan. Now, if a bank has to charge the consumer more for a non QRM loan to cover the additional risk, then the loan cost is still going up. The difference: the bank is covering additional risk instead of the government. Isn't that a better scenario?
To me, it sounds like NAR is basically saying 'Don't make any real changes'. Keep low down payments, require MIP for all loans with less than 20% down, tighten up underwriting (but not too much – don't want to keep someone from buying a home), and insure securitized loans so that banks and investors are off the hook for any risk.
For our housing to stand on its own feet, the government can't continue subsidizing private home ownership at such a high level. And, the banks and investors who buy mortgages must take on the risk of keeping the loans. Yes, interest rates will go up. Yes, many people would be unable to buy a home. But that must be the end-game in any scenario.
If this video is representative of how NAR lobbies our behalf, then they aren't helping to influence a reasonable way out of the housing mess.
Jonathan Benya
June 14, 2011 at 9:32 pm
This sort of crap is why Realtors are disenfranchised with NAR. This is a massive risk to our industry, folks, and NAR comes up with ineffectual arguments like this? What happened to the slick marketing and lobbying of the boom years?