The US Chamber of Commerce is proposing the federal government raise the gasoline tax by 25 cents per gallon, in 5 cent increments over 5 years. The levy has not been raised in 25 years because of weak-willed politicians who are scared to death of uttering the word “tax” in public. The proposal comes at an interesting time. The alleged president wants to blow a trillion and half dollar hole in the federal budget paid for by slashing or eliminating Medicare, Medicaid, and Social Security.
So far, the proposal has elicited not a peep of protest from the Tea Partiers and Freedom Caucus members of Congress who got elected by promising voters they would never ever, under any circumstances, cross out hearts and hope to die, approve any spending that results in a budget deficit or increases the national debt. So much for integrity.
In theory, the tax hike would go to pay for rebuilding America’s crumbling infrastructure — the thousands of roads, bridges, and tunnels that are so substandard they threaten us with death or dismemberment every time we get behind the wheel. The politicians haven’t even had the decency to use the money derived from the paltry 18 cents per gallon tax currently in place to fix the roads, preferring instead to raid the so-called Highway Trust Fund to reward their friends in high places.
The Highway Trust Fund is expected to run an annual deficit of $138 billion a year by 2027 if things continue going the way they have for the past 25 years. Clearly, new sources of funding America’s infrastructure system need to be found. As much as we are advocates for electric vehicles here at CleanTechnica, it’s as plain as the nose on your face that electric cars use less gasoline than conventional cars. That means they contribute next to nothing to infrastructure maintenance via the gas tax, although some states are considering special assessments to address that issue.
The Energy Innovation Analysis
Energy Innovation has studied the Chamber of Commerce proposal using the open source Energy Policy Simulator, a peer reviewed tool that uses government data to assess the impact of dozens of energy-related policies on emissions, costs and savings, and fuel consumption. The Chamber of Commerce says the gas tax hike would funnel an additional $394 billion into federal coffers over the next ten years. Energy Innovation claims the figure is actually $303 billion.
The organization also suggests the higher gas tax would spur the adoption of electric vehicles. In fact, it says higher fuel costs could increase annual EV sales by about 100,000 per year, which would put an additional 1.2 million EVs on the road by 2050. Drivers of conventional cars would see their annual cost of driving go up by about $30 billion per year once the full 25-cent increase goes into effect. The higher tax is projected to reduce US oil consumption by up to 35 million barrels per year, and total more than a billion barrels by 2050. The effect of the increased gas tax would be equivalent to a $29 per ton carbon tax, which is higher than the cost of carbon under the current cap and trade system in place in California and Quebec.
What Is The Chamber Of Commerce Up To?
The fact that the Chamber of Commerce is proposing the tax increase is interesting. In general, it is the bastion of “corporations can do no wrong” thinking that savages all government regulations as “job killers” in the current political parlance of Washington, DC. In fact, The Donald has proposed a 50 cents per gallon tax hike. Not surprisingly, the Koch Brothers and their minions are implacable opposed to any increase in the gas tax. But the Chamber often toes the line drawn by the KochHeads so maybe this is a trial balloon meant only to test the waters.
25 Cents Per Gallon Is Chump Change
As welcome as the news that any increase in the gas tax would be proposed by an establishment organization like the Chamber of Commerce may be, 25 cents per gallon is chump change when it comes to paying for the damage done by fossil fuels over the past 150 years. When the costs associated with shorter life spans afflicted by pollution-related disease, filling the oceans with plastics, and the unimaginable bill that will come due soon for the effects of global warming on the world community, a tax of $10 a gallon would be more realistic.
And that doesn’t even begin to address the cost of permanent war to protect America’s oil industry. Throw that into the mix and $25 a gallon would be closer to the actual social cost of fossil fuels. 25 cents a gallon? Oh, please. That won’t even scratch the surface. And the politicians will find a way to steal even that modest amount and divert it to their own purposes.
Civil engineers suggest fixing America’s infrastructure will cost $4.6 trillion. The Chamber’s proposal is too little, too late. It should be embarrassed to even put such a weak kneed proposal on the table. Praise for the Chamber’s proposal should amount to little more than the sound of one hand clapping.