11/25/10

Gas Tax

Because this blog is committed to talking about all kinds of taxes, not just income taxes, and because I'm about to drive from Denver to DC, let's talk a little about how messed up the gas tax is:
The gas tax isn't indexed to inflation. It was 18.4 cents per gallon years ago when gasoline was less than a dollar per gallon overall, and it remains 18.4 cents per gallon today. Since revenue generated from the gas tax stays the same while the rest of the economy grows, that means the gas tax revenue doesn't have the buying power that it used to.
In fact, when you take inflation into account American drivers are only paying half as much in federal gas taxes as they were in 1975.
Basically, the gas tax doesn't even cover the cost of maintaining roads, much less building new ones or paying for public transportation. But since we have one major political party unwilling to seriously address America's revenue problem and because the car is some kind of totem of real American culture, I don't expect this problem to be solved any time soon. Fiscal responsibility means never having to pay more for anything because you pay enough already, even if it's not enough to cover the true cost anyway. USA! USA!

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