Thursday, January 14, 2010

Another call to raise the gas tax

It's become obvious to many people that if the price of gasoline is too low, there is little incentive to conserve. A solution is to raise the gas tax, so that instead of having gas price increases go to countries like Saudia Arabia, Kuwait, Iraq, and Iran, some funds would remain here and could be funneled into road improvements and possibly alternative modes of transportation.

The Federal gas tax is currently 18.4¢/gal and was last raised in 1993, and the Virginia gas tax is one of the lowest in the country, 17.5¢/gal and was last raised in 1987. Bob Lutz, vice chairman of General Motors, thinks we should raise the Federal tax by 25¢ a year. This will encourage more people to drive fuel-efficient vehicles and to pursue alternatives to driving along, which is what most people do today.
"You either continue with inexpensive motor fuels and have to find other ways to incent the customer to buy hybrids and electric vehicles, such as the government credits," he said. "Or the other alternative is a gradual increase in the federal fuel tax of 25 cents a year, which in my estimation would have the benefit of giving automobile companies a planning base, and giving families that own vehicles a planning base."

Lutz said if a car buyer knew that gas that costs $2.75 a gallon today would likely go to $3 next year and $3.25 the year after that, it would prompt some buyers to say: "You know sweetheart—this time we should go one size down because we know what fuel is going to do."
When auto company executives come out in favor of increasing the gas tax, you know that times are changing.

Via m-bike.


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