Agree

by John F Mann

Created on: May 03, 2008

Mention "gas tax" at your local watering hole and you will likely spark a lively "discussion" bordering on cries for revolution. If you dare to voice an inclination to support an increased gas tax, you risk, at a minimum, being taunted with the political "L" word.

One defense to the "liberals as tax hikers" attack is to explain (with a smile) that supporting increased gas taxes is actually a conservative approach. With this disarming move, you can then take the offensive.

Allowing everyone (and every business) to drive as much as they want, without paying for the real costs of the highway system, is liberal in the extreme.

For at least the past 25 years, the American Society of Civil Engineers (ASCE) has issued their annual "report card" on the state of national infrastructure. Invariably, our highways and bridges have been rated substandard. Repair costs (conservatively) have been estimated in the hundreds of billions (with a B) dollars.

The problem of course is to fund necessary repairs. Unless we start selling every bridge and highway to foreigners or hedge funds, the only sources of funds is our government.

For several important reasons, we Americans must also reduce consumption of gasoline.

Rational thinking of these two problems should result in the conclusion that higher gas taxes are necessary and much-preferred compared to the alternatives.

The only realistic way to significantly decrease consumption of gasoline in the US is to greatly increase the price. Of course a much larger war involving Iran and Saudi Arabia would also put a large dent in gas consumption, though we would not be in control.

Based on just about any recent news report and opinion poll on the subject of gas taxes, a very high percentage of Americans claim that they do not believe any increase in gas taxes is warranted or fair. Yet, at the same time, a very high percentage of Americans also claim to agree with the notion that, as a nation, "we" need to do all we can to reduce consumption of oil, especially oil from non-American sources.

The NIMBY (not in my back yard) syndrome, applied to personal finance, jumps to mind as one way of explaining this obvious inconsistency. A more accurate explanation however is likely more complicated. When you listen to Americans try to explain why they claim to believe these glaringly inconsistent positions, it becomes clear that there is a general lack of knowledge about basic economic principles among the population.

Unless foreign suppliers were to literally halt delivery of oil and gasoline to our seaports, there is simply no practical way to reduce consumption of oil in the US without a significant and sustained increase in the price of gasoline. With gas now about $3.50 per gallon, we are only beginning to see a small decrease in consumption. At some higher price, consumption may begin to decrease at a much faster rate. However, based on our well demonstrated love affair with cars and trucks, that price is likely to be well north of $5.00 per gallon.

Raising automobile fuel efficiency by government fiat (using CAFE standards) may help in the long run, although prior experience since the 1970s demonstrates that, so far, Americans just drive more miles. Fuel consumption therefore is not reduced.

The price of oil will surely gyrate up and down in the short run. However, there is every reason to expect that long-term global demand for oil will continue to increase faster than the potential increase in world supply, resulting in a long-term upward move in oil prices.

Almost all citizens agree with the concept that we (as a nation) should try to reduce the flow of "petro-dollars" out of the US and increase the amount that stays in the US. Yet, we have (so far) recoiled when faced with the hard facts of what is necessary to actually accomplish that bold goal.

Raising gas taxes provides a way to keep, inside the US, more of "our" money that is spent on fuel. We also stop funding oppressive regimes that are openly hostile.

A substantial reduction in gasoline consumption has other important benefits, including; (1) Reduction in pollution, (2) Reduction in traffic congestion and (3) Reduction in accidents.

To allow for as much economic adjustment as feasible, gas taxes should be raised steadily, over many years. The schedule should be announced now.

Taxes collected must be dedicated to specific highway maintenance and safety programs. Siphoning off a large amount of gas taxes to mass transit or other programs should be minimized, until essential infrastructure is repaired.

For the repair of bridges and roadways, state gas taxes should be raised more-so than the federal tax. However, diesel fuel taxes (for trucks) should be raised much more than gasoline taxes. The reason is that a very high percent of the cost for bridges and highways is due to the weight of trucks, not cars.

As with all highway bridges in the US, the Interstate Highway bridge that collapsed in Minnesota (August 2007) was designed to support the weight of heavy trucks, in accordance with federal highway (AASHTO) standards. At the time of design, the design weight of the "standard" truck was 40,000 pounds, on three axles (8,000 + 16,000 + 16,000). The long bridge of course had to be designed to support many such trucks, at the same time.

Even today, the weight of the average car is not more than 4,000 pounds. Large pickups of course weigh more, though much less than 40,000 pounds.

Just as important as weight is the effect of frequency (number). Repeated applications of heavy weight (load) by vehicles causes "fatigue" stress in steel bridge members. The effect of fatigue is almost entirely caused by the heaviest vehicles.

If bridges (and highways) did not have to be designed to support heavy trucks, the cost to build and maintain highway infrastructure would be much, much less.

We have had a long-standing public policy of subsidizing trucking. As a contrast, railroads, which are far more fuel efficient, have very high operating costs to maintain their railroad infrastructure (tracks and bridges).

Therefore, it is reasonable that public policy should be modified to charge trucking companies more of the full cost for providing what has been a nearly-free service. A program to increase diesel fuel taxes over a long period of time is warranted, along with a general gas tax increase for cars.

Many critics of higher gas taxes complain that the "poor" would be unfairly affected. Such argument does not have much (if any) validity since the truly poor can not now afford to own, operate and insure a car.

As for the effect on the so-called "working poor", there are ways to mitigate the effects, such as increasing the Earned Income Credit.

In 1960 the vast majority of households who owned a car had only one car in the driveway. Car-pooling was routine for many commuters, as difficult as that "draconian" idea may sound to those under 50. The "real" cost of owning and operating that car was more that it is today, considering the great improvements in car lifespans since then. Yet, when the new President, John F Kennedy, challenged the nation to give back to the country, there was very little whining and complaining.

We need to consider the precarious position, relative to energy, that we now find ourselves in, as individuals and as a nation. We then need to remind ourselves where we have come from, and realize that we must provide for future generations.

Learn more about this author, John F Mann.
Click here to send this author comments or questions.