Is Now the Time for a Gas Tax?

The other day on Car Talk, they suggested that now is the time for a (higher) gas tax.  The idea is that now, when gas is only $1.70 per gallon, an extra 50 cent tax would only bring the cost up to $2.20 -- still less than half what we were paying a few months ago.

According to the Car Talk guys, a 50 cent tax would bring in $50-$100 billion per year.  They suggest this could be used to help fund high-speed rail projects between major cities.  They also suggest the big 3 Detroit car companies could lead these projects.  Considering how well they run their current enterprises, though, I’m not so sure they’re the best candidates for the job.

It seems to me that getting lots of cars running on something other than gas should be a higher priority than setting up high-speed rail service between major cities.  When the gas runs out, people who live in cities aren’t going to have much trouble getting transportation to their jobs, since mass transit within cities already exists.  The real problem will be the huge amount of people who live in the suburbs and have long commutes to their jobs.

The best investment might be to work on upgrading the nation’s power grid.  Whether you’re talking about alternative energy from wind and the sun, or powering a large and growing fleet of electric vehicles, there seems to be consensus that the current grid isn’t going to be able to handle it without serious upgrades.

But whatever we would spend the money on, is the gas tax a good idea to begin with?  I’m not anxious to hand over more money to the government, but desperate times call for desperate measures, and the "desperate times" case can certainly be made right now.  There’s also the added bonus that when gas prices go up, people buy less gas, and of course reduced consumption will make the gas we have last longer.

Posted by Anthony on reply

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