Streetsblog Capitol Hill, 3/14/13.
I said no. Tax reform discussions have focused on the income tax. Also, an increase to the gas tax is likely something more for a budget discussion - are more funds needed for the Highway Trust Fund (yes).
Yet, tax reform will focus on cutting back or eliminating tax preferences ("base broadening"). Will that include ones, such as repealing percentage depletion, that benefit the oil and gas industry? President Obama has already suggested this action in his FY2013 budget released in February 2012. If these changes are enacted, tax liabilities for oil companies will increase and quite possibly gas prices. That doesn't bring in money for the Highway Trust Fund though. It does make the public less inclined to accept a gasoline excise tax increase and for their elected officials to give them one. So perhaps tax reform or budget dsicussions should include allocating a portion of the general fund to the Highway Trust Fund.
Tax reform, a time to review the system and identify weaknesses and how to fix them, should ideally consider these transportation-related items:
- Gasoline excise tax reform - with more fuel efficient vehicles on the road, people buy fewer gallons of gasoline and thus pay less excise tax, but likely drive as many miles or even more than prior to owning the fuel efficient car. So, a new system is needed. A common suggestion is to switch to a vehicle miles traveled (VMT) tax rather than the current fixed cents per gallon of gas purchased. For more on the VMT tax, see this Rand study or just do a Google search on the topic. Oregon has been studying it for years and even did a pilot of it (see 12/27/12 Governing blog post).
- Carbon tax - can this help reduce greenhouse gas emissions? Can it help reduce the deficit? See this March 2013 paper on this topic from the Tax Policy Center.
A 3/15/13 infographic from the White House suggests creation of an Energy Security Trust with "revenue from profitable oil and gas companies." It suggests that the funds be used for energy projects that will also help create jobs. Why not also have it help fund the Highway Trust Fund?
What do you think? Should the gasoline excise tax be raised? If yes, when? What about switching to a VMT tax? What about a carbon tax?