Opinion: End hidden car taxes -- raise gas tax
- Published Monday, July 21, 2003, in the San Jose Business Journal
Drivers get cheap ride at everyone else's expense
By Walt Seifert
Remember the free lunch? Neither do I. Free lunches disappeared
because it's tough to keep a business going when you're giving away
Yet Audrie Krause seems to worry more about losing her free lunch
<http://groups.yahoo.com/group/BATN/message/12654> than about paying
the very real tab for automobile overuse ("Bureaucrats mull $1.5
billion in hidden gas taxes," Guest Comment, June 13 Business
Ms. Krause and an organization called Stop Hidden Gas Taxes want us
to tell the governor and state legislators that we oppose a
California Energy Commission and Air Resources Board recommendation
to reduce the demand for gasoline. The reason we should oppose this
sensible idea? It might mean higher gas prices.
Stop Hidden Gas Taxes professes to be a coalition of business,
taxpayer and consumer groups. Yet its approach is distinctly
unbusinesslike, unfair to taxpayers, and works contrary to the most
important concerns of citizens and consumers.
Let's start with being businesslike.
Even though they may not give away lunches anymore, some retailers
use loss leaders to increase customer traffic so they can boost
profits from sales of other items. But when government "sells" road
use at a loss, the increased traffic doesn't create profits. The
result is more losses.
More traffic means more road repair and creates a multitude of other
problems, including air pollution, congestion and crashes. This is
not good business.
Current gas taxes don't even cover road maintenance needs, let alone
costs of road widening and new construction. And when simple,
inexpensive road surface treatments are deferred too long, roads
must be reconstructed at gargantuan costs.
Why are we in this fix? Better fuel economy means cars go roughly
twice as far per gallon as they did 50 years ago. As a result, the
amount of gas tax revenue per mile driven has plunged. Moreover, gas
taxes haven't kept up with inflation, while road construction costs
have outpaced inflation. In California, gas taxes were 6 cents a
gallon in 1957. Today they are 18 cents per gallon. If state fuel
taxes had merely kept even with inflation, gas taxes would be 32.5
cents per gallon, nearly double the amount now.
While nobody is clamoring for new taxes, high taxes aren't at the
top of the list of citizen concerns. According to a Public Policy
Institute of California survey of the Central Valley, residents'
major concerns are air pollution and traffic congestion. Making it
more expensive to drive, while unpopular, will reduce pollution and
congestion, just as charging more for cigarettes has reduced tobacco
Sadly, it's only too true that the way we've designed communities
has virtually forced people to drive. It's very difficult to change
how we live in the short term. But economics affirms that price does
affect behavior. People tend to make rational choices about
If gas costs more, they will use less. In the long term, paying the
right amount for gas will influence where people choose to live and
where businesses locate.
When gas taxes paid by users aren't high enough to pay for the
roads, general taxes, such as sales taxes, must make up the
difference. Though expedient, this is not fair. Why should someone
who drives very little have to pay for road use when they dine at a
neighborhood restaurant or buy a new suit?
Which is a "hidden" tax -- gas taxes paying for the costs of gas
use, or sales taxes on a DVD player footing transportation bills?
Stop Hidden Gas Taxes asserts that energy conservation is a
reasonable goal, but we need to let market competition work, citing
a doubling of fuel efficiency over the last 30 years. Efficiency has
gone up, but because of federal fuel economy standards, not because
of market competition. Though cars get better mileage, miles driven
continue to increase at a much faster rate than population growth.
(See definition of sprawl.)
Eating is not a bad thing. Gluttony is. Driving is not a sin. Too
much driving is a problem. It simply is not good public policy to
subsidize excessive auto use when that subsidy is accompanied by so
much negative baggage. Why subsidize transportation that fills our
neighborhoods with noise, fouls the air, pollutes the waters,
degrades public health, and kills 40,000 Americans every year?
No one likes to pay taxes. Everyone would like a free lunch. But if
we want a better world, drivers need to pay the full costs of
vehicle use, not continue to avoid them.
Walt Seifert is executive director of the nonprofit Sacramento Area
Bicycle Advocates and is a member of the Sacramento Air Quality and