Tom?s proposal addresses the root problem. Our country consumes an embarrassing share of the world?s fossil fuel. Twenty to thirty years ago some advocated a sixty-cent per gallon increase in the gas tax in order to change our consumption and, in fact high gas prices over the last several months caused us to dramatically reduce fuel consumption. However, as soon as large vehicle prices fell and gas prices started to abate some people have traded their more fuel efficient vehicles for larger less efficient vehicles. It is naive to expect consumers and automobile companies to voluntarily change their behavior.
In addition to increasing the gas tax to 50 cents, the federal government should outlaw all state gas taxes and routinely allocate half the tax increase to states based on 1) gas tax remittances from each state, 2) total publically maintained road miles in each state or 3) other equitable formula that is sustainable over time. States use of gas tax revenue should be limited to transportation construction and maintenance and mass transit. Federal use of gas tax revenue should be limited to transportation related purposes including high speed rail, research and new technology which would reduce our use of fossil fuels. In other words the federal government and states should not be allowed to use gas tax revenue for non-transportation purposes.
Further the gas tax should increase by ten cents each year until the gas tax equals $2.00 per gallon but the state?s portion would progressively decline from 50 percent to 25 percent. The federal government would make grant money available to states for construction and repair of interstate highways, mega transportation projects that support economic development and mass transit.
For the next ten years the federal government could use a portion of the new revenue to subsidize automobile companies during a reinvention and restructuring period, progressively reducing the available subsidy each year. Companies who accept subsidies and bailout money would have to repay those funds. The federal government should send a clear message that the subsidy is all the money the automobile companies can expect to receive and they have ten years to fix their businesses but not encumber the subsidies with lots of rules.
Lastly, I acknowledge gas taxes negatively impact those who can least afford taxes and the federal government would need to provide a tax credit to low income people for gas taxes they paid during the year or a standard deduction based on income.
The bold change I have outlined would also send a signal to the rest of the world that our country is ready to do the right thing regarding one of our behaviors which negatively impacts the world politically, environmentally and economically and that we can move beyond self interest. Reducing our consumption could possibly prove to be a win-win situation for our country and the rest of the world.
Further, this is an opportunity to demonstrate for the first time in decades that our elected officials have the courage and conviction to lead the United States to cause significant, long range, positive change.