Jan. 2nd, 2009

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Motorists' habits spur call for tax increases
By JOAN LOWY, Associated Press Writer
WASHINGTON – Motorists are driving less and buying less gasoline, which means fuel taxes aren't raising enough money to keep pace with the cost of road, bridge and transit programs. [...] A roughly 50 percent increase in gasoline and diesel fuel taxes is being urged by the commission [...]

The dilemma for Congress is that highway and transit programs are dependent for revenue on fuel taxes that are not sustainable. Many Americans are driving less and switching to more fuel-efficient cars and trucks, and a shift to new fuels and technologies like plug-in hybrid electric cars will further erode gasoline sales.

According to a draft of the financing commission's recommendations, the nation needs to move to a new system that taxes motorists according to how much they use roads. While details have not been worked out, such a system would mean equipping every car and truck with a device that uses global positioning satellites and transponders to record how many miles the vehicle has been driven, and perhaps the type of roads and time of day.
I may be missing something but I don't get this at all. What's the problem with a tax that discourages people from driving large, fuel-inefficient vehicles? What's wrong with putting economic pressure on trucking to encourage development of fuel-efficient ways of moving goods? Sure, if there comes a time when there's lots of people driving cars that cause congestion and wear but don't consume gasoline, they're going to have to have an alternative way of taxing roads, but that day is a long long way off, and developing that alternative now will only help postpone it.

Fuel in the states averages 42.6 ¢/L. Fuel tax in the US varies by state but averages 12.4 ¢/L.

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Paul Crowley

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