There is a new idea being kicked around in Congress. Basic idea is to start taxing miles driven in addition to existing taxes such as the tax you pay on gas. Why? Well with new efficient cars and technologies such as hybrids and electrics it is possible someone would pay no gas tax and or revenues may fall due to the increased efficiency (less gas\diesel purchased).
Really? I might be able to understand this one if and only if they dropped the gas tax altogether. This is just getting plain silly. Let me get this straight. I make money. I pay income tax. I buy gas and pay sales tax (only in some states) and a federal gas tax. THEN I pay a tax for the miles I drive in the car I pay yearly registration fees (tax) on. Just exactly how many times do I need to get taxed on this?
Let me be clear... I am not some looney that thinks taxes should not be collected. However, I am a firm believer that any dollar I make should only be taxed once. IE if I pay an income tax to the federal and state governments then I should not have to pay ANY more tax because every red cent I make has been taxed. At least then it would be easy to determine just how much money vanishes down the government maw. Lets use this gas thing as an example.
I make one dollar. It is taxed at ~28% after FICA, SS and State income tax is removed. Leaving me 72 cents. If I buy 72 cents of gas that gets me... .21 gallons of gas. In Al that is taxed at about 32 cents a gallon... so 6.7 cents in tax leaving me to purchase ~65 cents worth of actual product from a dollar I made. That is a 35% tax rate on every dollar I spend on gasoline. If I drive a 30mpg car that will let me get a little over 6 miles down the road. If the tax rate is say 1 cent per mile driven (120$ yearly at 12k miles average) that adds another 6 cents leaving me with 59 cents of gas/driving purchasing power with the rest going to the government. ~40%. A ~40% tax rate. taxed at ~40%. No matter how I say it it seems ludicrous.
Now the article I link to does not say what the potential rate would be, or even that it would be a single rate. Perhaps 1 cent is to high? Well a 50 cent per gallon tax (over all national average) would be 1 cent per mile in a car getting 50mpg (not that many get that). Since average gas mileage is in the low - mid 20’s we already pay more than 2 cents a mile on average. So it isn’t crazy talk. Lets not even get into the sticky mess that would be variable rates. A 50mpg 2000lbs car does far less damage to roads than a 6000lbs soccer mom urban assault vehicle, which in turn does far less damage than a fully loaded Semi (~80,000 pounds). A single Semi on a deserted road does less damage than all us rats in our tiny go karts in rush hour. The combinations are endless as is the argument over what would be ‘fair’. Ideally fair would probably be something on the order of some calculation taking into account congestion, weight and cost of maintaining the current piece of road you are on at any given particular time. With GPS and some other electronic monitoring devices that is now actually a realistic possibility.... but that then raises privacy issues. Whether fuel consumption taxing is the best method or not it seems relatively fair to base your share on the amount of fuel you buy. It is is pretty simple and probably good enough. Electric charging stations and home meters can be rigged to charge similarly for juice going to electric vehicle batteries. Seems a much simpler fix than some convoluted electronic nanny system that will likely be royally abused anyway. And for those yammering about commercial vehicles causing more damage they are very right... and they are generally faced with further charges because of it.
Based on 2005 numbers it looks like we generate some where in the neighborhood of 69 billion a year in gas taxes (50 cent average tax per gallon, 20 million barrels of oil a day, 19 gallons of gas from a barrel, 365 days in the year ). This doesn’t include the added collection of diesel taxes. That isn’t enough? Really? Even with hybrids and electrics the amount of gas or diesel being bought isn’t exactly dropping just yet. When it does then perhaps it will be time to reconsider how we fund transit infrastructure costs. But it should NOT involve any method of double (triple if you count income tax) taxation. I personally think this should be rolled into income tax, or the entire tax collection system in the US should be switched entirely to consumption based taxes where money goes to things it is spent on when it is spent. Doing that would have the added bonus of killing the nightmare that is yearly tax filing and refocusing the IRS on sales tax collection\reporting rather than overseeing the incomes of every single wage earner in the country.
Anyway... enough ranting for one night.
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