Politicians Are Looking to Raise Prices at the Pump Says Gasbuddy.com Analyst

[jbauer]

http://finance.yahoo.com/blogs/break...131821195.html

The Federal gas tax is currently $0.18 per gallon and has been since 1993. Factoring in varying state government taxes, the national average for gas taxes and fees is $0.49 a gallon, making the U.S. the lowest gas taxpaying industrial nation.

With soaring debt, rising government spending and the Fiscal Cliff looming at the end of this year, there's growing speculation that State governments could target the gas pumps to gain some revenue to go towards infrastructure funding. It's a battle that no politician wants to take on directly because even the smallest increase tends to ignite the driving public.

"We're not paying a little extra, we're paying a lot extra," says Patrick DeHaan, sr. petroleum analyst at Gasbuddy.com about the current gasoline tax levels. "As CAFE standards are increasing fuel efficiency, we're having to find tax revenue from additional sources. Raising the gas tax may be something the politicians look at doing here."

The more Americans opt for fuel-efficient cars like the Toyota (TM) Prius, Nissan (NSANY) Leaf, Chevy Volt, and new Ford (F) Fusion, the less they're spending on gasoline. Consequently the revenue hit the government is taking is two-fold. Not only are the taxes generating less revenue, the production of fuel-efficient cars is subsidized and incentivized by the government.

"Not only are governments hurting for revenue, but they may be divvying up the portion that is for roads and putting it in a general fund," he explains. "We've seen [State] governments now interested in looking at different avenues for gas tax."

One option garnering attention is adding a mileage-based user fee.

"Several branches have talked about now charging per mile based on how much you drive; instead of gasoline tax, a usage-based system that would penalize those that use roads the most," says DeHaan.

This seems the fairest of them all; the more you drive, the more tax you pay that goes towards fixing roads and infrastructure. The drawbacks here are that drivers would likely face larger lump sum tax bills and it's difficult to track mileage accrued. The government can track your odometer, but that would likely invite an uptick in odometer tampering. Plus, they can't track whether you're traveling within your home state or across borders, unless of course there's a GPS monitoring your every move.

"You may see sales tax being added to gasoline because in some States that's easier than increasing a tax; just slapping a sales tax in addition on gasoline," says Dehaan.

Some states charge an actual sales tax, while others do not. Right now, state fees and taxes vary widely. Accounting for Federal and State taxes and fees, New York leads the country imposing 69.6-cents onto each gallon of gasoline, while Wyoming has the lowest 32.4-cents, according to gaspricewatch.com.

"The States got a bit smarter, they are charging a percentage-based sales tax," says Dehaan. "Whenever gas prices go up, States win. It's their cash cow. Look for the Feds to try something similar, but it's not going to go over very well."

[Yieu]

So, because rich people buy unnecessarily expensive cars that use less fuel, the rest of us who don't have those cars are still going to have to pay more, too? Is this okay for them to do because we were too dumb to buy the government approved cars and take on that debt?

If the problem is that they are spending money set aside for roads on other things, then raising taxes on the poor and middle class more will not fix the problem to any degree. They will just continue to spend it elsewhere.

[jbauer]

I guess you'd have to see if we are actually bringing in less revenue from increased mpg or or less revenue from less use. I theory if you drove a electric car you'd pay no gasoline tax.

[acptulsa]

This is a sticky problem. Up to now, the motor fuels taxes have been one of the fairest, most progressive taxes around. Setting aside whether the fedgov ought to charge any fuel tax at all (I think they shouldn't; we didn't have a federal fuel tax until we set out to build the Interstate System--that is now built--and the fedgov is just a middleman in this which directly maintains no roads outside of D.C.), this type of tax was a pure usage tax. The more miles, and the more weight, you put on the concrete the more you pay. Not only do electrics and hybrids use less or no motor fuels, they're inordinately heavy, and put more wear on the roads compared to other vehicles their size.

Of course, most electricity is not used for powering transportation. So, a road tax on the stuff couldn't even be called a use tax. What's more, this oil fiasco and the wars that accompany it has us using other fuels in our motors besides what comes out of the pump. This lack of uniformity is destroying the fairness of one of our best pay-for-what-you-use taxes of all time. Hell, it even works for rented and borrowed cars--the renter or borrower puts in gas, and thus pays for his or her own road usage.

It's going to take a creative solution. Unfortunately, the most creative plan is the GPS plan. Which is something only Big Brother could love.

[HOLLYWOOD]

Factoring in varying state government taxes, the national average for gas taxes and fees is $0.49 a gallon, making the U.S. the lowest gas taxpaying industrial nation.

In Commade's California it's double taxation... So, Yes, governments want high priced(inflation) to bring in more revenue. That's why they love taxing @ percentages, the higher the price, the more TAX YOU PAY in revenue for cronies. New York is absolutely loonie on all thier taxes and fees on a gallon of gas.

Snapshot California's burden:

Gasoline Tax: Second Highest in the Nation
California's statewide gasoline taxes and fees total 48.6 cents per gallon,the second highest in the nation, just behind New York (49 cents gallon) and tied with Connecticut (according to the American Petroleum Institute, for rates effective January 1, 2012). When the federal gas tax of 18.4 cents per gallon is added, Californians pay 67 cents in taxes for every gallon of gas they purchase. Additionally, California's general sales tax and various local sales taxes are levied on the sale of gasoline — and the sales tax is calculated after the state and federal excise taxes are added to the price, so motorists pay a tax on a tax.

California

35.3

18

15.2

“Other Taxes” columns include a 2.25% state sales tax for gasoline and minimum of a 1.25% local sales tax for various counties in the state for diesel. The tax rate applied is a weighted average based upon county populations. A 2 cents per gallon state UST fee is also included