[lbo-talk] RE: A Case for a Higher Gasoline Tax

[Gary Mongiovi]

I've been a little curious about why this issue is, in the discussions of the past year or so, mainly framed in terms of taxing gasoline rather than in terms of taxing gas-guzzling vehicles. Taxing fuel is no doubt a sensible way to encourage conservation over the long run, but as listmembers have rightly pointed out, the impact is regressive. But I would guess that a tax on SUVs would be much more progressive, and would have a much faster impact on the average fuel efficiency of vehicles on the road.

 
So why not a modest increase in gasoline taxes combined with a killer tax on gas guzzling SUVs?

 
Regards,

 
Gary 

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	Message: 6

	Date: Tue, 10 Jan 2006 12:37:49 -0500

	From: Doug Henwood <dhenwood at panix.com>

	Subject: Re: [lbo-talk] A Case for a Higher Gasoline Tax

	To: lbo-talk at lbo-talk.org

	Message-ID: <p06230907bfe9a052cad7@[192.168.1.100]>

	Content-Type: text/plain; charset="us-ascii" ; format="flowed"

	

	Dwayne Monroe wrote:

	

	>  it seems to

	>me, on two shaky pillars:

	>

	>One, only (or mostly) people with disposable income

	>will feel the pinch and use their middle and upper

	>middle class political clout to force change.

	>

	>A good example of this thinking is found right in

	>Yoshie's post:

	>

	>from -

	>

	><http://mailman.lbo-talk.org/pipermail/lbo-talk/Week-of-Mon-20060109/028770.html>

	>

	><quote>

	>

	>The cost of higher gasoline taxes will be borne by a

	>very broad middle-income swathe of the population (the

	>poorest, often carless, already use mass

	>transportation, and the richest will feel no immediate

	>impact).

	

	Here are some numbers on spending on gasoline & motor oil as a

	percentage of after-tax income for the U.S. by income quintile. The

	2003 figures are as reported in the BLS's Consumer Expenditure

	Survey; the 2005 numbers were estimated by me, based on the growth in

	average incomes and the level of gasoline prices, and should be

	considered decent guesses. Clearly from these numbers gas is a big

	deal for the bottom half of the income distribution. Higher gas

	taxes, however, could be rebated through an income tax credit for the

	lower brackets.

	

	Doug

	

	----

	

	PERCENT OF AFTER-TAX INCOME SPENT ON GAS, BY INCOME QUINTILE

	from the BLS Consumer Expenditure Survey

	

	                    all      Q1      Q2      Q3      Q4      Q5

	after-tax income  $48,596  8,260  20,543  36,363  58,593 119,091

	% on gas

	   2003 (actual)     2.7%    7.4%    4.8%    3.7%    3.0%    1.7%

	   late 2005 (DH)    3.3%    8.9%    6.1%    4.5%    3.6%    2.1%

	

	

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	End of lbo-talk Digest, Vol 25, Issue 66

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