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The Almighty Buck Transportation Government United States Politics

The Downside to Low Gas Prices 554

HughPickens.com writes Pat Garofalo writes in an op-ed in US News & World Report that with the recent drop in oil prices, there's something policymakers can do that will offset at least some of the negative effects of the currently low prices, while also removing a constant thorn in the side of American transportation and infrastructure policy: Raise the gas tax. The current 18.4 cent per gallon gas tax has not been raised since 1993, making it about 11 cents per gallon today, in constant dollars. Plus, as fuel efficiency has gotten better and Americans have started driving less, the tax has naturally raised less revenue anyway. And that's a problem because the tax fills the Highway Trust Fund, which is, not to put too fine a point on it, broke so that in recent years Congress has had to patch it time and time again to fill the gap. According to the Tax Policy Center's Howard Gleckman, if Congress doesn't make a move, "it will fumble one of those rare opportunities when the economic and policy stars align almost perfectly." The increase can be phased in slowly, a few cents per month, perhaps, so that the price of gas doesn't jump overnight. When prices eventually do creep back up thanks to economic factors, hopefully the tax will hardly be noticed.

Consumers are already starting to buy the sort of gas-guzzling vehicles, including Hummers, that had been going out of style as gas prices rose; that's bad for both the environment and consumers, because gas prices are inevitably going to increase again. According to data from the U.S. Energy Information Administration, taxes last year, even before the current drop in prices, made up 12 percent of the cost of a gallon of gasoline, down from 28 percent in 2000. And compared to other developed countries, US gas taxes are pretty much a joke. While we're at it, an even better idea, as a recent report from the Urban Institute makes clear, would be indexing the gas tax to inflation, so this problem doesn't consistently arise. "The status quo simply isn't sustainable, from an infrastructure or environmental perspective," concludes Garofalo. "So raise the gas tax now; someday down the line, it will look like a brilliant move."
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The Downside to Low Gas Prices

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  • by Anonymous Coward on Saturday November 15, 2014 @09:34AM (#48391149)

    Simply change the tax structure on commercial trucks which are the ones that do all the damage to the roads and highways. You fuel efficient Toyota Prius couldn't damage the road if it tried.

    • by ganjadude ( 952775 ) on Saturday November 15, 2014 @09:50AM (#48391213) Homepage
      There is no downside to lower gas prices. lower prices on anything is always a positive.

      we as a group are saving billions a day after a very long recession. The gas prices are still not low enough to help those who need it most, the poor and lower middle class.
      • by MrL0G1C ( 867445 )

        The gas prices are still not low enough to help those who need it most, the poor and lower middle class.

        Unless they go by foot, bicycle, moped / low-cc motorcycle, electric car or use public transport.

        Cheap fossil fuels are not a necessity, they will run out.

        • Except in most parts of the country those methods are practical. foot and bicycle limit you to living within a few miles of where you work. that just isn't possible as rents in the cities are massively higher homes in the country where you still need a car. motorcycles don't work well in rainy, or snowy areas. Public transport is limited to cities. Electric cars are possible. especially if you own two cars. one for long distance driving and one for driving around town.

          • rents in the cities are massively higher homes in the country where you still need a car.

            Obvious solution: Repeal zoning laws that block construction of dense urban housing. Last year, in San Francisco, 95% of multi-unit housing building permits were rejected. Many other cities are nearly as bad.

          • Our current culture in the US, where unsustainable transportation (driving personal automobiles) is prioritized over sustainable transit, needs to change, and the sooner the better.

            The hope would be that people would start building sustainable transit BEFORE the roadways reached their breaking point, but cities like Atlanta, LA, and Houston have proved that humans really are not that smart.

            At some point, you have to stop building endless low density suburbs and start infilling with high density transit corr

        • that might work in most places around the world where everyone lives on top of each other. in most places in america, you have a good 20 mile round trip commute to work. what should these people do, just quit their jobs and suffer???

          MrL0g1cc, you need to think more logically about this
          • A 20 mile round trip is easily doable on a bicycle. During the rush hour it is actually faster than using a car.

            • Except for the half of the country that gets snow for months at a time. Or for anyone that needs to carry more than a change of clothes in a dufflebag.

              • by dunkelfalke ( 91624 ) on Saturday November 15, 2014 @12:29PM (#48391991)

                Snow is not really a problem for a bicycle. Neither is carrying stuff, for that matter. That is what racks are for. Your picture of a bicycle is a bit skewed by all these fixie riding hipsters, but this kind of a bike is, thankfully, a small minority (but with loud owners).

                • by I'm New Around Here ( 1154723 ) on Saturday November 15, 2014 @12:41PM (#48392051)

                  Considering I rode a bike to work for years, including in the Michigan winter, I will stand by my statement.

                  A bicycle is not an acceptable solution for most of the working public. For many reasons, two of which I mentioned.

                  • by dunkelfalke ( 91624 ) on Saturday November 15, 2014 @12:47PM (#48392075)

                    I have done the same, in Germany though. None of your mentioned problems whatsoever.

                    • by dasunt ( 249686 )

                      I have done the same, in Germany though. None of your mentioned problems whatsoever.

                      I commute to work, by bike, from an affordable house that's technically in the suburbs (less than a quarter mile from the main city). My commute is 5 to 8 miles (say 8 to 13 km).

                      This is in the US, in the north where it's snowy. It was a fun week last week, that's for sure. It was below 10F (-10C for everyone else), which wasn't bad - easy enough to dress for. However, for the most part, we're automobile-centric enough

            • by Oligonicella ( 659917 ) on Saturday November 15, 2014 @01:10PM (#48392191)

              I have arthritis in both knees, my friend has a deformed hand, an acquaintance is eighty and a young man I know has asthma. Glad to see you think in broad, general terms instead of myopically focusing on solutions that work for yourself.

          • by itzly ( 3699663 )
            What are they going to do when the oil runs out ?
          • that might work in most places around the world where everyone lives on top of each other

            Although the mean population density when you average across land mass is pretty low in the US, the modal and median population densities (averaged across people) are actually compared to most places in the western world. The problem is the batshit insane zoning policies of US cities that insist that people live on top of each other in one place and then work on top of each other somewhere far away, and shop on top of each other in a third place.

      • There is no downside to lower gas prices. lower prices on anything is always a positive.
         

        There is no downsides to crumpling roads causing lower speed limits and bridges collapsing taking lives, lower taxes is always a positive, right?

        • by TheCarp ( 96830 )

          Actually a good portion of that should come from other sources. As one of the early posters pointed out, commercial vehicles do far more damage to the road than simple passenger vehicles, but the cost of the gas tax hits all drivers. Yet, all people, drivers or not, benefit from commercial traffic since commercial traffic is what brings them their food and goods.....so why specifically target drivers?

          I mean yes, gas taxes for the roads makes a lot of sense but, the idea that it should be the sole input for

        • Re: (Score:3, Insightful)

          by ganjadude ( 952775 )
          none of that has anything to do with our spending on roads, we have a spending problem to begin with. we would have plenty of money to fix our roads if we stopped spending it on social programs and wars and went back to the basics.
        • by jedidiah ( 1196 )

          Maintaining infastructure is entirely orthogonal to fuel prices. If anyone thought it was a priority, then it would get done regardless of what kind of revenue was being generated from fuel taxes.

          We have been ignoring our roads and bridges for a lot longer than fuel has been cheap.

        • by Earthquake Retrofit ( 1372207 ) on Saturday November 15, 2014 @03:05PM (#48392957) Journal
          Gasoline is taxed by the gallon, not the dollar. Lower priced gas means more driving and more taxes for the highway funds.
      • Re: (Score:3, Interesting)

        by SourceFrog ( 627014 )

        There is no downside to lower gas prices. lower prices on anything is always a positive.

        Yup. You have to look carefully at where the "information" in this "article" is coming from - this is not even an article, it's basically a piece of political propaganda for the government - the same "author"'s other "article" headlines look like this: "More Evidence Austerity Is Terrible", "President Obama Deserves a Vacation", "Sympathy for the IRS on Tax Day", "How Cheap and Free Parking Is Screwing Up Cities".

        Why

        • Re: (Score:2, Insightful)

          by ATMAvatar ( 648864 )

          Why do people seem to take political propaganda at face value, as if this article actually carries weight as a piece of economic advice, ha ha ha.

          Because outright propaganda is what they get from the major news networks (Fox, MSNBC, et. al.), so they can't tell the difference.

        • by TubeSteak ( 669689 ) on Saturday November 15, 2014 @12:12PM (#48391897) Journal

          Yup. You have to look carefully at where the "information" in this "article" is coming from - this is not even an article, it's basically a piece of political propaganda for the government - the same "author"'s other "article" headlines look like this: "More Evidence Austerity Is Terrible",

          Italy is currently being roiled with strikes and protests over austerity.
          France recently presented their budget and told the EU to stuff its immediate cuts to social spending.
          Besides Germany, you can throw a dart at Europe and it'll land on an example of austerity not-working.

          I'd be happy to see your examples of successful austerity since the global recession started.

        • You have to look at the issues, and the pros and cons individually.

          Austerity is terrible.
          Depends on what you think is more important: preventing a recession from becoming a depression, or minimizing government spending, taxes, and government debt. I agree that generally governments should only be spending what they collect in taxes, but in exceptional circumstances, like a financial melt down, it IS a good idea to have the government spending to prop up the economy until things get better. Generally les

      • There is no downside to lower gas prices. lower prices on anything is always a positive.
         

        And you buy all your milk and pet food from China.

      • by ultranova ( 717540 ) on Saturday November 15, 2014 @11:34AM (#48391701)

        There is no downside to lower gas prices.

        Except greater gas consumption and the associated pollution. But hey, profits are private, costs are public, right?

        lower prices on anything is always a positive.

        So you'd prefer Iran to have been able to afford the price of acquiring weapons-grade plutonium? Or perhaps you'd celebrate a pay cut for yourself?

        we as a group are saving billions a day after a very long recession.

        You, as a group, are externalizing costs and setting yourself up for an even harder fall when the next price hike comes.

        The gas prices are still not low enough to help those who need it most, the poor and lower middle class.

        Higher minimum wage and unemployment benefits would do a lot more to help the poor while avoiding the problems associated with direct and indirect gasoline subsidies, which is what ignoring pollution ultimately amounts to.

      • There is no downside to lower gas prices. lower prices on anything is always a positive.

        Heartily disagree with this. To me, the OP points it out perfectly:

        Consumers are already starting to buy the sort of gas-guzzling vehicles, including Hummers, that had been going out of style as gas prices rose; that's bad for both the environment and consumers, because gas prices are inevitably going to increase again.

        Problem. On so many levels. We as a collective need to stick to the fuel efficient vehicles to conserve the supply. It's not limitless. I agree also with the OP, if people are going to be morons with the memory of a stoner, then yeah, crank up the taxes to discourage a return to the gas guzzlers.

  • Sigh (Score:3, Funny)

    by koan ( 80826 ) on Saturday November 15, 2014 @09:37AM (#48391161)

    https://en.wikipedia.org/wiki/... [wikipedia.org]

    Prior to the 1956 Highway Revenue Act and the establishment of the Highway Trust Fund roads were financed directly from the General Fund of the U.S. Treasury. The 1956 Act directed federal fuel tax to the fund to be used exclusively for highway construction and maintenance. The Highway Revenue Act mandated a tax of three cents per gallon.

    It's been a political ping pong ball, and whenever I read the word "consumer" I think "stupid". seriously think of the implications of calling people " consumers, the psychology there.

    It's very much like a rancher discussing his cattle.

    • So if "consumer" connotes a livestock mentality, then what's a better word for "someone who buys a thing other than to use it to make other things that he can sell"?
      • Re: (Score:2, Interesting)

        by geoskd ( 321194 )

        So if "consumer" connotes a livestock mentality, then what's a better word for "someone who buys a thing other than to use it to make other things that he can sell"?

        There really isn't a better word for it, but it has negative connotations because the behavior is generally not rational. There are two kinds of consumption: Necessary and discretionary. No one talks about necessary consumption because it is a fact of life: Eating, place to sleep, clothes, etc... The other kind of consumption is not necessary to survival, but consists of luxuries. The purchase of luxuries is not rational, but rather an expression of personal enjoyment. Some discretionary consumption is more

        • There are those on the far right who hold similar opinions.

          So eating is a basic necessity of life, and we need to provide a social safety net that people don not starve, but meals above a bare subsistence level are a luxury good?

          I have heard Conservatives argue that instead of Welfare and Foodstamps, we should just have these government stores where everyone can purchase as much whole-wheat flour, lard, and powdered milk as they want, and if a person wanted more than these subsistence food items, they s

      • "Citizen" sounds good.

  • by geekmux ( 1040042 ) on Saturday November 15, 2014 @09:39AM (#48391171)

    "The increase can be phased in slowly, a few cents per month, perhaps, so that the price of gas doesn't jump overnight."

    Oh yeah, because that never happens today when Puxatawnie Camel farts in the wrong direction...give me a break.

  • How about no... (Score:2, Insightful)

    by fuzznutz ( 789413 )
    Gas prices sometimes vary 10% on a weekly basis. So when prices are down by 25% for a single month, the do-gooders want to raise it back up and "hope" we won't notice when gas costs rise back to their "normal" levels? So I should expect $5 a gallon gas when prices restabilize? I pay surcharges on shipping, trash hauling and a number of other services because of high prices. Fuel prices are one on the reasons the economy has had trouble recovering.

    Take your social engineering tax and go suck my balls
    • Re: (Score:3, Informative)

      by gbjbaanb ( 229885 )

      you also have an annual deficit of $564 bn [usgovernmentspending.com]

      Your whole insistence of spending more than you take in tax is the reason the economy has had trouble recovering - mainly as when Bush left office the deficit was $1.3tn. Those election promises didn't come cheap!

  • Although the world seems to focus on America, we must remember that aside from subsidized countries like Venezuela, Americans enjoy an average gas price that is much less than the global averages. That said, we must understand that the recent movement in crude prices is in direct correlation to the ongoing strategy that the United States has with choking off Russian monetary supplies. It's not a conspiracy theorist and as a pure market technician, which can be defined in my book The Market is not Random., [tminr.com]

    • Re:Lucky America (Score:5, Insightful)

      by atriusofbricia ( 686672 ) on Saturday November 15, 2014 @10:08AM (#48391285) Journal

      Although the world seems to focus on America, we must remember that aside from subsidized countries like Venezuela, Americans enjoy an average gas price that is much less than the global averages. That said, we must understand that the recent movement in crude prices is in direct correlation to the ongoing strategy that the United States has with choking off Russian monetary supplies. It's not a conspiracy theorist and as a pure market technician, which can be defined in my book The Market is not Random., [tminr.com] the market foretold this sell off going all the way back to the swing sell in May...

      Whenever one mentions that gas prices are so much higher elsewhere and that American's are lucky, one should also mention the why of gas prices being higher else where. It's almost always, if not always, entirely due to punitive taxation on fuel. According to the BBC filling up a 55 liter tank would currently cost about 68 pounds, of which 43 is bloody taxes. So, gas in the US isn't cheap. It just isn't taxed to death like in other parts of the world.

    • You should have debunked Mandelbrot's Misbehavior of Markets instead. You understand Fama's efficient market hypothesis was a mathematical proof, yes? Where is your math?

      Your price theory is obvious bullshit, simplistic on the level of "What comes down must go up." I hope that being a nutcase was worth your "federal conviction and permanent ban from the securities industry."

  • I can agree the gas tax needs to go up, particularly the federal one. Will congress agree? I doubt it.

  • I wonder who's actually behind this message? I mean, most folks aren't exactly going to come up with a mythical downside to "low gas prices". Who even goes, "Oh my god, gas prices are too low!" when they wake up in the morning?

    No one. No one who isn't in the gas industry. Lower gas prices mean higher possible margins for those selling gas. Low gas prices mean you get more money for your buck on your long drive to work, that your bread costs less in the store, etc, etc, ad nauseum. .

    • Who even goes, "Oh my god, gas prices are too low!" when they wake up in the morning?

      Hard core environmental whackos? :D

  • by cirby ( 2599 ) on Saturday November 15, 2014 @09:51AM (#48391221)

    ...is "broke" because we're funding a lot of things out of it that aren't highways.

    If the money was used as originally intended - to fund building and maintenance of the Interstate highway system - it would be brimming with cash. Instead, it's also being used for lots of other projects, like mass transit, bicycle paths, and landscaping for roads. About a quarter of the income from the HTF goes to non-highway projects.

    Oddly enough, if you moved the non-highway spending out of the Highway Trust Fund, it would be completely solvent, with a decent surplus for more highway spending on things like bridge repair.

    • by dinfinity ( 2300094 ) on Saturday November 15, 2014 @10:02AM (#48391261)

      Rename it 'The Transport Infrastructure Trust Fund' (which is what it has become). Problem solved.

      • by tomhath ( 637240 )

        Rename it ...

        I hope that was sarcasm. Unfortunately that bait and switch is all too common; create a source of revenue for a purpose that most people support (e.g. Highway Trust Fund) then switch what it's used for on the assumption that "the American people are too stupid to understand the difference" (tm - Jonathan Gruber) .

  • Comparison Chart (Score:3, Interesting)

    by lu-darp ( 469705 ) on Saturday November 15, 2014 @10:05AM (#48391275) Homepage

    A week back the BBC posted a chart comparing world gas prices. Might be of interest:

    http://www.bbc.com/news/business-21238363

  • by WillyWanker ( 1502057 ) on Saturday November 15, 2014 @10:23AM (#48391337)

    Find another way of funding the HTF that doesn't rely upon bleeding more gas money from people.

    People drive less and buy more fuel efficient vehicles because the price of gas is so fucking high. Lower the price and people will drive more because the amount they spend on gas every month won't be the same as their rent.

    Basic Economics 101. Not surprising it goes right over their heads.

    • by Ichijo ( 607641 )

      Speaking of Economics 101, a far better way to pay for the roads than a gas tax is express tolls (variable congestion tolls), because they permanently eliminate traffic congestion, and without traffic congestion, you no longer need to widen any freeway just to prevent traffic congestion (which doesn't really work well anyway), so it saves taxpayers a LOT of money.

      Also, because the toll is low or free during off hours, it gives you a way to avoid paying for the roads that doesn't exist today with the gas tax

      • That's an interesting proposal. The downside I see is that it requires installing a lot of toll infrastructure. A few years ago Denmark looked hard at doing something like this, but rather than installing toll infrastructure on the streets they were going to install GPS tracking in all vehicles, with a cellular data connection to report travel. This was much more cost-effective, but ultimately died due to privacy concerns; and Danes are much less worried than Americans about being tracked by their governmen

  • The stupidity of people will always amaze me. Sure the tax will go away when needed... Just like the death tax that was put into place to pay for World War 2. That will go away once that is over too right? Right guys?

  • The wonderful thing about markets is that human activity adjusts to whatever economic reality is out there, just as we adapted over time to any given set of conditions in nature. Whenever some parameter in the economy changes, a constituency somewhere feels pain. If the oil price rises or the oil price falls, someone gets hurt and has to readjust. Every squawk makes the news; people who are happier at the change that just occurred are the ones who keep quiet and enjoy it.

  • We stop using "tax the fucking citizens" as our go-to everytime something is broken?

    My suggestion: stop pouring $billions in subsidies, tax incentives, sweetheart land-use deals etc at the petro companies, and then let them sell their gasoline at market-necessary pricing?

  • Seriously, the ideal way is to raise diesel and gas by .1/gal each year for the next 5-10 years. At that point, index it to inflation. Note, that this will then encourage Americans to buy high mileage vehicles only as initial posting says and which Europe has already done.
    BUT, the question becomes, where should the money go? The diesel tax should go exclusively to DOT who then uses it only federal highways, dams, etc. It must be infrastructure use ONLY.
    The gas money should likewise, go to the state in w
  • Index fuel taxes to inflation. Gas eaters pay more. Long distance drivers pay more. econoboxes pay less. grandma, going to the market once a week, pays less. No violation of privacy, no odo readings, we put off the realtime "govt car tracking service" a bit longer. Oh, and this only works if the money stays for roads and bridges....OK, I see why politicians will not let this simple system work.....
  • ... it will never happen with a Republican Congress.

  • Seriously, where we went wrong on this, is that the hummer is the ideal vehicle to convert into a series hybrid. With electric motors, it would have great torque similar to what Tesla has.
    BUT, the smart thing to do, is to not have one large engine/gen, but 2 or more smaller units in the hummer. By making these smaller units, they can use them in a number of other vehicles. In addition, it simplifies maintenance. Just pull it out and replace it with another one that was fixed.

    Sadly, GM is STILL ran by M
  • Here's an old podcast from last year, that sums up the problem pretty well in Connecticut...sorry for the length but it's pretty interesting and still relevant: http://ctmirror.org/truth-behi... [ctmirror.org]
  • There is no political will to raise gas taxes. Hell, liberal Massachusetts just voted to decouple their gas tax from inflation, and the Democratic-dominated state government dare not speak the word tax even though none of them will ever face a credible reelection threat. Besides, raising the gas tax means that some of the magic fairies that go out after midnight and fill potholes and repair bridges will have to be let go. Why do you hate them so?
  • Plus, as fuel efficiency has gotten better and Americans have started driving less, the tax has naturally raised less revenue anyway.

    That's only true if you compare to gasoline consumption during the economic bubble from 2003-2008 [ritholtz.com]. If you look over a longer period [taxfoundation.org], gas tax revenue is the highest it's been since before 2003 in nominal dollars, and is roughly the average it's been from 1990-2014 in inflation-adjusted dollars. The tax is due for an increase to counter inflation, not because of the reasons

  • It's not often I see an entire /. article written by a troll.

    Well played sir.

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