U.S. shale oil is still rip-off

How dare you propose that we forgo instant gratification and invest in infrastructure.

Lower my taxes. Let the next generation pay.

 

Bob,
Just make the "gas taxes" a percentage of the price instead of a fixed $ amount. This is much simpler than indexing it to a fake inflation number.

JeffD

 

My concern is, if they increase gas taxes, are they really going to use it for road maintenance and infrastructure repair?

Toll booths in general were supposed to be a temporary thing too in many places, yet they turned into a cash cow as far as politicians are concerned. And the traffic still mostly sucks in those areas.

 

JeffD a fixed percentage wags the dogs. When oil prices spike, it exaggerates the spike, when they decline it exaggerates the decline. When this effect sits on top of oil futures speculation, we increase the damage to the economy from oil price volatility. A fixed tax per gallon, increasing every year though (based on both inflation and decreased gas use per capita) provides a good signal to reduce gas usage. We can study the impact of this percentage tax on europe, and a fixed rising tax would likely have been better. If we look at it regan raised gas tax to $0.09 cents in 1982 when gas prices were $1.30/gallon. IF we had set this price as a percentage, gas taxes would have been far lower under clinton when gas prices in 1996 were $1.10, but taxes $0.183 cents. Indexing by per capita use and inflation would have properely moved up the taxes (per capita use and inflation had increased while gas prices had decreased).

If your goal is to charge oil for its ghg impact and pollution impact as well as road maintenance, taxes are too low in the US even simply for road maintenance. Unfortunately the government does not pay to mitigate ghg and pollution impacts, but we could try to tax at a rate high enough to change behavior (we have decent data from europe and japan) and reduce other taxes like payroll taxes.

Simply giving the federal government money for roads and bridges does not mean it will efficiently build and maintain these though. We had a an example of government throwing money at shovel ready projects in the stimulus bill and wasted a great deal of money. DOTs procedures need to be reformed and congressional pork projects stopped if we are going to give it much more money.