Americans currently pay $0.18 per gallon in federal gasoline taxes at the fuel pump. Most states tack on their own fuel taxes, but the federal share is pretty low. It hasn’t been raised in decades and during those decades the quality of our transportation infrastructure has declined dramatically.
Enter (Or should I say exit? It is kind of a swan song for the proposer of this) President Obama’s proposal for the 21st Century Clean Transportation System. (Hat tip to Watts Up With That for their rather disapproving coverage of this. As I am going to come out in favor of this below, if you want the other side of the story check out WUWT.)
It’s actually a $10 per barrel tax on oil, which would translate to about $0.24 per gallon at the pump if it were passed through to consumers, as it most likely would be. The revenue raised from the tax would be used to “make public investments and create incentives for private sector innovation to reduce our reliance on oil and cut carbon pollution from our transportation sector, which today accounts for nearly 30 percent of U.S. greenhouse gas emissions,” “increase the competitiveness of U.S. businesses and the productivity of our economy by making it faster, easier, and less expensive to move American-made products,” and “expand clean, reliable, and safe transportation options like public transit and rail, making it easier for millions of Americans to get to work, access new jobs, and take their kids to school—reducing the 7 billion hours that American waste in traffic each year.”
It also might spur conversion to transportation not reliant on oil, something I’m sure is on the President’s mind as well.
So why not just raise the gas tax? Vox has a good story on this, writing “In theory, there’s not a huge difference between a broad oil tax and a tax on gasoline. An oil tax might sound better — the White House says it will be “paid for by oil companies” — but the costs presumably pass through to consumers anyway. …”A gasoline tax mainly affects drivers; a broader oil tax would hit air travel, home heating, and a few other sectors as well” and crucially, “If you were going to tax oil or gasoline, right now would be the time to do it. The price of crude oil has been plummeting over the past year, down to around $30 per barrel, a level not seen since 2004. A $10/barrel tax would lift that to $40 per barrel, which is roughly the (still-low) price we saw… last November.”
I’ll quote the next part of the Vox article in full: “The oil tax will get all the headlines, but perhaps the most radical part of Obama’s budget proposal is the outline for a “21st century clean transportation system.” Generally speaking, US transportation policy over the last 50 years has largely focused on funding and building new roads and highways, with a smaller fraction carved out for mass transit. That build, build, build dynamic has led to more driving, more suburban sprawl, more gasoline use, and more CO2 emissions.
The White House wants to break that pattern, diverting a greater share of federal funds to transit and rail instead:
The President’s plan invests nearly $20 billion per year above current spending to reduce traffic and provide new ways for families to get to work and to school.
The plan would expand transit systems in cities, suburbs and rural areas; make high-speed rail a viable alternative to flying in major regional corridors and invest in new rail technologies like maglev; modernize our freight system; and expand the Transportation Investment Generating Economic Recovery (TIGER) program begun in the Recovery Act to support high-impact, innovative local projects.
Republicans have already come out against the plan, vowing it will not pass. I guess their limousines can handle the potholes and traffic without disturbing them.
Seriously, although I would prefer a revenue neutral carbon tax to deal with the negative externalities of CO2 emissions, this seems broadly like a good idea. Lord knows American infrastructure needs the work. Lord also knows that American transportation needs an upgrade. Especially the poor (and mostly Democratic) need help getting to work and school. Getting better trains and bus lines will help.
Our President has made some real mistakes regarding climate change and energy. But he was correct, IMO, in starting the big transition away from coal in energy generation and he is broadly correct here in taxing oil to pay for the infrastructure oil-using vehicles depend on.
To those who would oppose it just because it comes from Barack Obama, I ask: Does America deserve to have infrastructure as bad is it has become? How long do you want it to get worse before something is done about it? And finally, what would you offer as a proposal instead?