Your thoughts on McDonnell’s abolish-the-gas-tax scheme?
Daryl Mitchell | Wikimedia Commons
This afternoon Gov. Bob McDonnell unveiled an eye-opening plan he said would solve Virginia’s transportation funding woes once and for all: He wants to abolish the 17.5 cents-per-gallon gasoline tax and replace it by raising the general sales tax from 5 percent to 5.8 percent.
Because I may be doing a column about that proposal soon, I’m interested in your thoughts about it.
McDonnell says this will raise more than $500 million each year for transportation infrastructure projects in Virginia, which have been sorely hamstrung in recent years. Of course, that’s because the legislature irresponsibly hasn’t raised the gas tax since 1987.
From the governor’s email:
“That’s right, no more gas tax at the pump. No sales tax at the pump either. When this plan passes the price of gas will go down, and Virginians will spend $3.5 billion LESS at the pump over the next five years.
“We then propose increasing the sales tax from 5% to 5.8%, still below every neighboring state and the District of Columbia, and putting that increase into transportation from here forward. The advantage of that change? We’re ensuring that transportation receives the new funding it needs in the years ahead by tying it to a mechanism that moves in tandem with economic activity and inflation. That is how every other tax works. That is what will make transportation funding sustainable again.
The fact is, the gas tax is a declining revenue source. It is fixed at a flat 17.5 cents per gallon and does not fluctuate with inflation. Cars are getting better and better mileage. More Virginians are buying alternative fuel vehicles. Many have called for the gas tax to just be increased. But that’s not a long-term solution. All that would do is lead us back to the same revenue shortfall a few years down the road, and the same old debates. We need a complete change in how we fund transportation or else no new “solutions” will work. We can’t remain tied to an outdated model.”
What are your thoughts on this? Here are a few of mine:
1) Right now, the gas tax is a user fee. People who drive on the road are paying for their construction and upkeep through the gas tax. (Eexcept when the state unwisely borrows money for that stuff, which it has done under McDonnell. Then we all pay). McDonnell’s plan removes all burden from the driver, and places it on everyone.
2) “Everyone” includes those who don’t have cars — mostly the poor and the elderly who don’t drive any longer. In that sense, it can be seen as a transfer of wealth from the poor to the rich. They won’t have to pay gas taxes on their gas-guzzling SUVs any longer, but the poor schlep who rides the bus (because he can’t afford a car) will help finance road construction through every purchase he makes.
3) This isn’t the first unusual transportation funding scheme McDonnell has proposed. Remember the last oddball one? That was to sell the state liquor stores to finance highway construction. That idea was a miserable failure.
4) This one is likely to do better because of its simple, “Abolish the gas tax!” headline / sound bite. A lot of people will think that sounds just peachy — just like they did when Jim Gilmore cried “Abolish the car tax!” That one is still with us, in part, by the way.
5) McDonnell’s statement “the fact is, the gas tax is a declining revenue source. It is fixed at a flat 17.5 cents per gallon and does not fluctuate with inflation” is a pile of BS. The only reason it’s a declining revenue source is that the legislature has irresponsibly not increased it since 1987, and they’ve irresponsibly declined to index it to inflation. THOSE are the only reasons why its a declining revenue source. That was by choice.
January 8, 2013 - 5:55 PM
I don’t like the sales tax going up, but reducing eliminating the gas tax is a smart idea. It will help companies and school districts all over the state, and having the cheapest gasoline in the nation will bring more business and industry here. The achievers and the workers will get a break. That’s a good thing.
Maybe revenue will increase such that the sales tax can be lowered.
The regressive sales tax is not the way to fund transportation, but the gas tax does have some problems of its own. As average mileage increases, the tax has to be increased significantly. Even then, those who purchase hybrids and such will still be bleating for more roads even tho they pay very little towards them. Some states are moving to the milage-driven scheme even tho that has significant problems related to any method used for reporting what that milage is. A difficult subject, but the general sales tax–or the Republican-favored VAT–is not the way to do it.
He’s a horse’s ass Dan. Why would you end a “transportation” tax that’s aleady in place (i.e. gas tax) that only affects drivers that use the road, for one that penalizes everyone.
In short, driver’s who now pay for their roads with the transportation tax (gas tax), will soon be subsidized by poor bus riders and old people who walk when they buy clothes, medicine, etc.
Susie!!!! is Right!!!
Gasoline taxes, in my view, are a form of user fees. As a result, I believe that those taxes should be used to support transportation in Virginia. I don’t know the figures, but I-95, I-85, I-81 & I-64 are major thoroughfares used by a sizeable number of folks who don’t live in Virginia. When they buy gas in Virginia they pay gasoline taxes to support the maintenance of roads & highways. Virginia hasn’t increased its gasoline tax in 24+ years. Because of the inflation in the cost of maintaining, repairing, etc. of interstates, highways and local roads has increased significantly in that time. It’s time, in my view, to automatically increase the gas tax rate by the annual increase in the cost of repairing & maintaining them. I think the current tax rate is 17.5 cents per gallon. Because of inflation since the last rate increase the purchasing power of the 17.5 cents has decreased to around 10 cents a gallon. That means each dollar of tax revenue received buys 57 cents worth of repairs/maintenance. that should explain why Virginia is having problems maintaining its roads. Think about it.
By the way, Virginia is not alone is this problem.
TAKING AWAY THE GAS TAX IS A GREAT IDEA-EXCEPT-THE WAY THE OIL COMPANIES PLAY GAMES WITH PRICING, IT MAY JUST BE A WAY FOR THEM TO CHARGE MORE! VA’S GAS TAX IS LOWER THAN ALOT OF NEIGHBORING STATES,ANYWAY.
There are some things that absolutely should be funded by user fees, and transportation (roads and bridges and their upkeep)is absolutely one of them. I cannot fathom how asinine this idea will look in a few years as we burden ALL Virginians with what was shared by the actual users. It even made those with the gas guzzling luxury pay more for it, and the heavy trucks pay for their damage. It rewarded the hybrids and high mileage choices of the small cramped vehicle choices.
His argument for why the gas tax is bad is right wing sophistry at its best. This is purely to punish the poor and reward the wealthy which is the right wing mantra. What a putz.
Go watch the trucks pull out of the truckstop on Rt 11 and tell me again this is a good idea!
I’ve thought about this for a while, several years actually. While the fuels tax is increasingly problematic for long-term funding of transportation needs, I do not think it should be eliminated. The problem I foresee with this scheme is that it’s clear that fuels tax revenues must go to transportation expenses in the state. No question, no haggling, no politicking.
But, eliminating it entirely and simply allocating a portion of the sales tax revenues to transportation, well, that invites all manner of politicking into the mix. Eventually, I could see it being a political move to ‘starve’ VDOT by further cutting their funding, and instead shoving more roadways to PPTA’s like VDOT embarked on with Skanska on the Downtown/Midtown Tunnels in Hampton Roads…where Skanska builds needed improvements, but gets a 58-year lease on the roads to collect pricey tolls on (The project is slated to cost $3-4 billion, they could collect around $20 billion in tolls over the life of the project).
That would absolve the state of all responsibility, save oversight, for the entire interstate network and several primary highways. They would be turned over to a private group that would take over all maintenance, operations, and construction…and have the ability to raise funding by levying tolls (which are really just a highly localized tax). That would be a boon for private infrastructure and construction companies, but a horrible blow to the state.
It might seem far-fetched, but McDonnell has been pushing for just such arrangements since before he became Governor…
That’s the concern I have…that this move might make some semblance of sense in the short-term, and maybe even the mid-term…but that it’s part of a long-term strategy to further gut and privatize more and more functions the state one owned responsibility for…which in the end will saddle Virginians with higher costs and a diminished product.
Ordinarily I’m in favor of user fees.
However, there’re lots of folks who benefit from the roads that our user fees are maintaining…who don’t pay the user fees, because they don’t by gasoline. Ergo, I think it makes sense for all people who benefit from the use of roads built on the backs of the folks who currently pay the user fees, pay a little for the benefits they receive, ya know?
A 0.8 percent user fee may not be the right number, but I do think that the concept, in this case, is sound.
Let me get this straight. Because I drive a fuel efficient car that not only has a smaller carbon footprint and puts out fewer noxious emissions than other vehicles, but also burns fewer non renewable fuels, I am to pay higher fees? Interesting concept.
Raise ‘em both.
This plan from McDonnell, bless his heart, is as bad an idea as taking a beer to a job interview. This proposal benefits the wealthy and — if the plan is to keep revenue level — spreads the tax burden to all of us.
For our simpler readers, that means he is proposing a tax shift that will disproportionately affect the poor, elderly, students, the under-employed and the like.
This is a bad idea for every one to whom how their money is spent matters.
All the surrounded states would hate us. Gas is already 20 cents cheaper in Va than NC. Would it be revenue neutral? Probably not because we wouldn’t get tax revenue from people waiting to get to Va to buy gas.
Wait…if there are no gas taxes, would people pay sales tax on gasoline?
Anybody in a position to evaluate the math on this? Can you really make up the lost fuel tax revenue this way?
Who knows-McDonnell could be the next Jim Gilmore-his career really took off after he cut that car tax to nothing. Ron May is right. The gas tax is pretty much a user fee paid by those who are using the roads which is the best way to pay for things in my book. Suzie-I am pretty sure schools get their gas tax free.
My thoughts are similar to OJ’s. Plus, I can’t help but feel that the gas suppliers will make up the difference and we won’t really see a 17.5 cent reduction.
However, while agreeing that the gas tax is a user tax to some degree, I don’t think drivers are the only ones that benefit from having roads. Look around whatever room you’re in right now. Odds are ate some point everything you see was once in a truck. The first responders use the roads. Mail carriers do too. Roads are how food gets to the market and medicine to the pharmacy.
Everyone, not just drivers, needs a good transportation infrastructure. I’m just not so sure the governor’s plan is the way to do it.
Raise the damn gas tax! This incentives people to have a smaller carbon footprint. McDonnell is a dumb dumb. 30% of the revenue raised by the gas tax would be by folks driving through Va and not citizens. What a great deal! Why are our politicians so chicken$7It when it comes to things like the gas tax, or cigarette tax, alcohol tax, for crying out loud, these idiots talk about a users tax being fair, then start with the gas tax!
Once again, I give thanks to our founding fathers who saw fit to term limit the Governors seat in Virginia. We will soon be shut of McDonnells ignorance.
Before you start, they ain’t no way we are stupid enough to elect Cooch.
Why not just reduce the gas tax significantly and increase the sales tax to 6.0 percent. Somewhere between the two a percentage should be exclusively earmarked strictly for high speed rail throughout the state?
Did Gov. (Better than the Second Coming) McDonnell just get back from a trip to Washington state? Or did he just visit one of the local meth labs? Because anyone who puts forth (and supports) such a goofy plan has to be on drugs. As others have said, this is a great far-right plan to reduce the “burden” on the rich and shift it to the poor.
The gas tax is a simple user fee — drive on a road in Virginia, buy fuel in Virginia, and you contribute (minimal as it is) to the maintenance and construction of roads in the Commonwealth. This applies to everyone, whether they live in Virginia or are just passing through. An out-of-state driver may stop to fill up, depending on his route, but may or may not purchase anything that has the sales tax attached. So he gets a free ride while Virginians who don’t even own a car provide him a smooth road.
We can only hope that this plan gets a quick dismissal by the General Assembly (although I suspect there will be some strong supporters among the usual suspects).
Bad idea. Just raise the stinking gas tax.
Henry, the governor is saying no sales tax on gas, either.
“Ordinarily I’m in favor of user fees.
However, there’re lots of folks who benefit from the roads that our user fees are maintaining…who don’t pay the user fees, because they don’t by gasoline.”
–Comment by Frank
Lots of who, Frank? Please be specific.
Good idea. Since about 90 % of Americans a own car and the majority of households have two cars, this proposal makes sense. The % of Americans owning cars would likely even be higher if you factored out metro areas such as NYC and Chicago where they are not needed by urban citizens.Thus the overwhelming majority of consumers in Virginia will benefit from this program which to me is not a Scheme.
I’m going to guess ole frankster is talking about bikers.
According the state, 11 percent of gas taxes now are paid by tourists. This does not count truckers.
I’m sure Hey Frank isn’t talking about cyclists, Kristen. Because all the cyclists he knows personally buy gas for their cars. (He said the the folks freeloading off the current system do it because they don’t buy gas). And, when they’re riding their bikes on roads (rather than driving their cars) they’re actually doing less damage to the roads than their cars do. So, they’re both paying gas taxes AND doing less damage to roads.
Mike 3,
90 percent of Americans do not own cars. The number is not even close to that.
Even apart from that basic mistake of fact, your statement makes absolutely no sense.
Dan, apologies. I know “bikers” is the wrong term but I didn’t know the right one.
And glad those sorry assed non carbon emitting freeloaders are paying something.
In terms of school districts, if they operate in the manner of VDOT and Towns, the fuel they use is already tax-exempt at the state level.
13.”This plan from McDonnell, bless his heart, is as bad an idea as taking a beer to a job interview.’
comment by Saintbridge
Well put and true, Saintbridge, and it’s at least the second time that Gov. Ultrasound has done it. As V.P. wannabe he auditioned with his pockets stuffed with open bottles labeled “ultrasound” and “family planning punishment”.
This time he must not have known that even those most likely to hire him recognize this for the regressive tax increase it is, and everyone else recognizes it for the pander that it attempts to be.
i dunno, Kristen.
cyclists, who knows? could be biker-riders, who already have gas-tax-paying citizens pay for building them their own private “bikes only” lanes. has anyone ever seen a bike-rider riding in their own private “bikes only” lanes on Peters Creek Extension, paid for by gas-tax-paying motorists? I’m on that road frequently, and have not seen one, let alone two.
could be passengers in cars. could be moped riders. might bring the cost of services down, since the cost of gas will go down. the cost to businesses for reimbursing employee milage will go down.
the Roanoke Times’ low-paid delivery folks might enjoy a boost in disposable income by paying less at the pump for gas. of course, ol’ Dan will object to that.
Dan, you can search engine on your own the % of american housholds that own a car and it is 90%. The national car owner percentage would be even higher if you factored out the americans that do not require a car in metro cities since they can walk to work, take the subway, bus , or ride a bike.Thus abolishing this Va. tax would benefit the vast majority who are car owners.This includes all Hybrids and Gas Guzzling SUVS owners.
For our simpler readers, that means he is proposing a tax shift that will disproportionately affect the poor, elderly, students, the under-employed and the like.
Nah, the freeloading obama voters already get their food for free. Welfare takes care of the rest, so what do they care?
It’s a lot like the Melrose voters not giving a crap about the deficit.
Sadly, but as usual, Frank knows NOTHING regarding the subject he’s bloviating about.
The statement I read said that diesel fuel tax would not be reduced as large trucks are a major contributor to wear and tear on roads. Also I find it interesting that a number of comments indicate that only the weathly drive cars and buy gasoline. How do you figure that?? I am fairly certain there a lot of working, low income who buy gas every day. It is a interesting concept and I will be interested in hearing both sides of the debate. I think it is some what irresponsible and narrow minded to immediately condem this or any other idea for that matter.
per the usual, dan disputes noe of my specific points. he couldn’t even touch the ol’ private biker-lane on Peterscreek, ’cause he didn’t even realize it was there, and that gas-buying motorists are paying for it.
And, heaven forbid that people who use their personal autos for business should get a break at the pump!
I’m serious. I can’t make this stuff up!
“In terms of school districts, if they operate in the manner of VDOT and Towns, the fuel they use is already tax-exempt at the state level.”
OJ, surely you’re not suggesting that once again suzie has no idea what she’s talking about?
Frank dominates this board. He makes great point after great point. You can tell by how many responses he gets.
I’m with OJ on this one. I think it’s all a part of the plan to eventually privatize everything in about transportation and the building and maintenance of roads. And as we’ve already seen with snow removal and ill maintained sections of highway, this isn’t getting the job done. The privatization of transportation, prisons, and schools is just another way of lining the pockets of corporations ands IMO opens the door wide for bid rigging and corrupt practices as well. And the oil companies will step right in and raise gasoline prices to make up at least part of the decreased gasoline tax to line their own pockets.
Mike 3, you originally said “90 % of Americans” and then you correctly changed that to “% of american housholds”. Those are two different numbers. Don’t blame Dan or any one else for you sloppy mess and regardless of what you may think, McDonnell is only the governor of Virginia, so America’s cars are not relevant.
Sure it will benefit the people who most use the roads, especially the gas guzzling SUV’s but it will hurt the poor, the people without vehicles and those who purchase goods more often (i.e. not in bulk). It spreads the pain but does not spread the benefit.
“Dan, you can search engine on your own the % of american housholds that own a car and it is 90%. The national car owner percentage would be even higher if you factored out the americans that do not require a car in metro cities since they can walk to work, take the subway, bus , or ride a bike.Thus abolishing this Va. tax would benefit the vast majority who are car owners.This includes all Hybrids and Gas Guzzling SUVS owners.”
–Comment by Mike 3
Nice try, Mike 3! Except, that’s not what you wrote in the earlier post. See, I was taking issue with what you actually wrote in the earlier post. Here it is:
“Good idea. Since about 90 % of Americans a own car and the majority of households have two cars, this proposal makes sense. The % of Americans owning cars would likely even be higher if you factored out metro areas such as NYC and Chicago where they are not needed by urban citizens.Thus the overwhelming majority of consumers in Virginia will benefit from this program which to me is not a Scheme.”
Perhaps you understand the difference, and perhaps you don’t. Either way, there is a huge difference between claiming that 90 percent of AMERICANS own a car, like you originally said, and that 90 percent of American HOUSEHOLDS own a car. (Use a search engine on our own and you can see the Census figures yourself). The difference, with your “90 percent figure,” equals 178 million cars. That is all you were off by, with your original (and apparent) misstatement.
Now let’s take your REVISED statement and consider why it appears to make little sense.
Lets say you have a household with two cars, and each is spending $50/week on gas. That is roughly 33 gallons total at current prices. That means the household is paying $5.76 per week in gas taxes.
Now lets say that same househould, apart from gas for two cars, is spending $500 per week on other items such as groceries, eating out, clothing, dry cleaning, car repairs (parts), entertainment and other purchases. With an added .8 sales tax, they’ll be paying $4 more in sale tax on that stuff. Which means this relatively well-off household will be saving $1.76 per week in this scheme.
On the other hand, the guy who earns minimum wage and has no car and spends $200/week on expsnses will be paying $1.60 more per week net in taxes, to subsidized the first household’s savings AND their use of the roads.
BUT REMEMBER: You claimed that 90 percent of households own a car and would benefit from this. What that means is you’re saying 10 percent of the households, mostly poor, paying $1.60 extra a week, and 90 percent are going to be saving $176 per week.
If you are right about that, then the state is going to take in FAR LESS revenue overall by abolishing the gas tax and increasing the general sales tax by .8 percent.
Guess what? Gov. McDonnell says you’re dead wrong — that the state will take in $500 million more per year under the scheme.
Do you follow that, Mike 3? There is no way in the world this scheme can produce the amount of additional revenue McDonnell claims it will if 90 percent of the households save money on it — like you claimed they would.
And THAT’S why both of your statements make no sense.
Hey Frank, you are not serious. And you are making stuff up. That’s all you do.
Frank is yanking Dan around like he’s on a string
“Frank dominates this board.”
He spouts a lot of mindless drivel. If I didn’t think Dan was watching the IP’s I’d almost swear he was you.
We will all be giving more of our money to the state. That’s all the politicians want regardless of the stripe.
“We will all be giving more of our money to the state. That’s all the politicians want regardless of the stripe.”
–Coment by Rodant
Rodant nailed it — though the wealthier may save a little and the poor will certainly pay more. It’s almost as if this scheme is McDonnell’s revenge for the fiscal cliff tax increases on the wealthy.
Are we sure this isn’t another ploy to funnel more money into the general fund that’s meant for other, specific things?
I mean, we got sort of swindled with the whole lottery thing and “100% going to education”.
Perhaps I’m just distrustful.
the Roanoke Times’ low-paid delivery folks might enjoy a boost in disposable income by paying less at the pump for gas. of course, ol’ Dan will object to that.
Comment by Frank — January 8, 2013 @ 10:33 pm
Frank, the pay for the carriers is (and has been) set on the Rke. Valley average per gallon of gas, so any lower prices at the pump result in a direct reduction of pay for said carriers. So, let’s go ahead and drop this whole imagined “gotcha” point with the RT carrier thing because you’re talking out of your rear, brother.
You wouldn’t want to make an ass of yourself, would you?
“Frank . . . You wouldn’t want to make an ass of yourself, would you?”
–Coment by J.M. White
It’s way too late to be raising that question . . .
Dan – I agree with your thinking. Makes more sense for revenue to come from people who are purchasing gas and therefore using highways. Increase gasoline tax, is there additional taxes that trucks pay – particularly those with trailer behind? They must cause more wear and tear on road than Honda Fit car or motorcycle?
per the usual, dan disputes noe of my specific points. he couldn’t even touch the ol’ private biker-lane on Peterscreek, ’cause he didn’t even realize it was there, and that gas-buying motorists are paying for it. -Frank
If you don’t live by Peters Creek, or travel around there frequently you would have never known it was there. The Bike Lane has just been paved out not even 2 months ago. The road has always been wide enough, and after they repaved it, VDOT, painted bike lanes… so really the only thing the “tax payer” paid for was the paint.
“Frank dominates this board. “
Comment by Suzie — January 8, 2013 @ 11:05 pm
Classic. The woman who convinced herself Romney was going to win in a landslide is encouraging Mr. Hook, line and sinker to make an ass out of himself. What a riot.
Frank’s posts are pretty much the virtual equivalent of the dumbest guy in the trailer park saying “Hold my beer and watch this!”
“the Roanoke Times’ low-paid delivery folks might enjoy a boost in disposable income by paying less at the pump for gas. of course, ol’ Dan will object to that.”
Comment by Frank — January 8, 2013 @ 10:33 pm
Sounds like Frank’s trying to get a little bump in his take home pay again.
Sure sign that a right-wing poster is flailing around and desperately in need of help: suzie shows up to claim that person is dominating the board.
HOWEVER, I will agree that Frank is dominating the board if by dominating the board you mean he’s proven wrong about simple facts time after time after time after time, most of his posts are obvious trolling efforts, he has difficulty with spelling and punctuation, and he’s even willing to call his own sister names to get a reaction from people.
In fact, given all that, I can see why you rushed in to prop him up, suzie. He’s a whole lot like you.
Bob McDonnell was electing promising that he held all the keys to our transportation funding dilemma and he’s delivered nothing at all. The solution is simple — index the gas user fee to inflation and let the people who use the roads most pay the most. Conservatives claim that’s the way we should do things, but in reality all they want is a free ride.
“as we burden ALL Virginians with what was shared by the actual users. ..”
sandi saunders
oh so if its transporation, of utmost importance here, sandi doesnt like to pay for what others use….uh sandi, what about abortion and birth control in obamacare? do you still feel that way?
In the end, 3.1 Billion more $ will flow from taxpayers (of one kind of another) to the government (in this case the state government)- note- that is how governments INCREASE revenues, it has to come from somewhere and that somewhere is John Q Citizen.
Based on the above and that government will get larger at the expense of the taxpayer- which is the goal of every liberal- I can’t see why Dan has any issue with this at all.
But then, if a republican found a way to turn old tires into gold, Dan would find something wrong with it.
“…could be biker-riders, who already have gas-tax-paying citizens pay for building them their own private “bikes only” lanes. has anyone ever seen a bike-rider riding in their own private “bikes only” lanes on Peters Creek Extension, paid for by gas-tax-paying motorists? I’m on that road frequently, and have not seen one, let alone two.”
So, let’s see Frank, you’re claiming that nonexistent cyclists are benefitting from these bike lanes? People who aren’t using these lanes are benefitting by using these lanes? Yeah, that makes sense.
And even if they were using the lanes, Frank, which you assure us they aren’t, the ONLY person I know who bikes regularly and doesn’t use a car (and therefore avoids paying the gas tax) is someone who lost their driver’s license. IOW, cyclists in this area pretty much all own cars and all pay gas user fees.
suzie, see how easy it is to rip apart just about anything Frank says?
What’s that sound? “Here I come to save the dayyy!” Oh, hi J.M.
Gee, I was hoping that the Governor’s tax proposal would not negatively impact low wage earners, and might even benefit the RTs delivery carriers. I’m glad to have learned something. Thank you.
By the way J.M., please note my use of the word “might” in the sentence you are referring to. The word MIGHT is defined in Merriam-Webster as “used as an auxiliary to express permission or possibility in the past, a present condition contrary to fact, less probability or possibility than “may”, or as a polite altenative to “may”, “ought”, or “should”. In other words, the word “might” doesn’t mean “fact”. Sheesh. I thought you were up on things like that.
Well, during this little exchange, I learned that the RTs delivery carriers will likely not directly benefit from paying lower prices at the pump for the business-related gasoline use. And, you learned the meaning of the word “might”.
“Frank . . . You wouldn’t want to make an ass of yourself, would you?”
–Coment by J.M. White
It’s way too late to be raising that question . . .
That sounds a lot like a personal attack. I thought Dan said he wanted to eliminate those. Instead, he’s piling on.
@52 so can dany or any other liberal answer this question…..
I didnt think so….
Suzie, Frank still gets responses and can have actual discussions because unlike you, he has not burned every bridge he crossed. And we like playing with his ridiculous efforts.
Frank, I believe most “bike lanes” are paid for with federal transportation funds, not VDOT. It is all under the auspices of the safe routes to school funding or some such. That is why they are not on all roads. This will not affect bike lanes per se.
If diesel fuel is exempt then yes, this is all just to subsidize the gas guzzling SUV crowd who have whined like children over the gas prices. We are spreading the pain, not the gain. Typical GOTP.
Dan – I just posted some thoughts on the gas tax elimination plan at the RIDE Solutions blog. Basically, I’m supportive of any effort to improve transportation funding, plus there are some benefits of removing the idea of the gas tax as a user fee and just treating transportation as any other public benefit (I make the point that cyclists are often said not to belong on the road because they don’t pay gas taxes [a dumb argument, but still regularly made]; this would take care of that line of reasoning). The whole post is here: http://ridesolutions.wordpress.com/2013/01/09/eliminate-the-gas-tax-increase-the-sales-tax-a-good-idea/
“this is all just to subsidize the gas guzzling SUV crowd who have whined like children over the gas prices.”
Correct. Why should people who use public transport or bike to work have to pay for roads they’re not using? People who drive big gas guzzling vehicles (i have 2) SHOULD pay up at the pump. If it bothers you, drive a smaller car.
Sandi: Bike lanes in counties are generally paid for out of a portion of VDOT’s maintenance and paving budget. In some cases, bike lanes and sidewalks in the immediate vicinity of target schools are paid for out of Safe Routes to School, but the new MAP 21 transportation bill eliminated the SRTS program as a stand-along effort (it’s now part of a larger Transportation Alternatives program). Bike lanes in cities are paid for out of city funds.
The reason they’re not on all roads is that, being part of the maintenance/paving schedule, they’re only considered for sections of roads that VDOT is already planning on going in and fixing up. Rarely are they put down as a stand-alone project.
the Safe Routes to School can include bike lanes, but not all bike lanes are built as a part of that program. For a while (and it may still be the case), there was a state requirement that all new or reconstructed roadways have bike lanes included in them if the road was in an urban or suburban area…unless the local government made the decision to not include them. Otherwise, they were added by default to the road template. Funding for them is murky though. Many roads do have Federal dollars tied to them, mainly interstates (no bike lanes) and a lot of Federal/State primary highways (think Route 11 which is Federal, or Peter’s Creek…which is a state primary)…but typically other roads are state/local funded only.
Bike lanes make sense when they are along roads where parks, schools, trails, residential areas, and other origins and destinations for bike traffic are present. They do not make sense when applied universally without any planning for additional connectivity to neighborhoods or other bike traffic generators, which is what the state standard had been (and may still be, I’m not 100% certain).
In terms of funding mechanisms for the roads…I strongly, strongly dislike tolls being levied on existing roadways that have no tolls on them. That is the completely wrong approach to take, and limits all funds collected to only that road and connecting intersections or interchanges. It does nothing to boost revenues available for other parts of the state or other local/regional needs…and it’s far, far more regressive than any fuels or sales tax ever has been.
I’ve done a lot of research and I actually like the idea of an indexed vehicle-miles traveled tax…it could be set up to encourage purchase of more fuel efficient and lighter vehicles…rather than being a punitive measure against heavier/larger ones. The main problem with such a measure is how to collect revenues off out-of-state drivers. A fuels tax would need to remain in place for them, but it makes it rather difficult to exempt state residents…and the thought of collecting the fuels tax and then issuing a refund creates too much beaurocracy. Plus, how would that information be collected and appropriately taxed? Would the state install GPS tracking devices to log mileage? Would state inspection centers be required to log and submit mileage for vehicles so the state could assess the VMT tax? In short, this idea, while probably a more fair means to collect user fees along roadways, has a huge potential for either more government invasion into our lives, or a huge potential for major fraud and tax evasion through improper or lack of reporting.
And that leads me back to thinking we should give a slight bump up in the fuels tax, and look at indexing it to inflation so that as road costs inevitably rise, the revenue stream has a better chance of keeping up. The problem we face is that we have very, very little money available for construction, and the maintenance obligations we have are straining the budgets as is…and we’ve already cut a lot of the maintenance back tremendously, which directly reduces the lifespan of our critical infrastructure. That will have a direct and measurable negative impact on economic activity if our infrastructure cannot sustain growth and opportunity in the Commonwealth, the ability to move people and freight, and the potential to lure new employers and jobs into Virginia in the future.
Speaking of Gas, Dan probably has plenty of it dealing with Frank.
I like how a tax increase by republicans still has democrats whining. Isn’t a revenue increase created by higher taxes what you guys want?
Nope, Mcdonnell could come out with higher taxes across the board, balance the budget, and the Left would still call it a scheme or conspiracy.
Thanks guys, guess I should have read ALL of the links.
“Section 217 of Title 23 of the U.S. Code calls for the integration of bicycling and walking into the transportation mainstream. More importantly, it enhances the ability of communities to invest in projects that can improve the safety and practicality of bicycling and walking for everyday travel.
In 1991, Congress passed landmark transportation legislation, the Intermodal Surface Transportation Efficiency Act (ISTEA), that recognized the increasingly important role of bicycling and walking in creating a balanced, intermodal transportation system.
The National Bicycling and Walking Study, published by the U.S. Department of Transportation in 1994, translated this renewed interest in nonmotorized travel into two specific goals: to double the percentage of trips made by foot and bicycle while simultaneously reducing the number of crashes involving bicyclists and pedestrians by 10 percent.
Subsequent legislation provides the funding, planning, and policy tools necessary to create more walkable and bicycle-friendly communities.
A bicycle transportation facility is “a new or improved lane, path, or shoulder for use by bicyclists and a traffic control device, shelter, or parking facility for bicycles.” The definition of a pedestrian includes not only a person traveling by foot but also “any mobility impaired person using a wheelchair.”
Funding Sources for Bicycle and Pedestrian Projects
Federal-aid Highway Program
Federal Transit Program
Highway Safety Programs
Federal/State Matching Requirements”
http://www.fhwa.dot.gov/environment/bicycle_pedestrian/overview/bp-broch.cfm
I still maintain that ending the user fee gas tax in Virginia will reward the gas guzzling SUV owners and punish the compact hybrid and high mileage vehicle owners, scooters and bike riders and that is in part why it is being done. If I had a dollar for every wealthy SUV owner I have heard whine about their gas bill and bike lanes, I could buy a lot of gas for my own car.
Agreed, Sandi. Transit riders, bikers, and pedestrians don;t add a whole lot to the physical strain on the infrastructure since the impacts are substantially reduces as compared to driving a personal vehicle or a large truck…but they do add to the cost for maintaining specific systems and facilities they use (like bus stops, bike lanes, and sidewalks). I have no problem with a portion of the normal sales tax being allocated to transportation to supplement what is collected through fuels taxes and other vehicle-specific user fees…that helps to spread the burden to folks who may not own a car, but who do in some shape or form use part of the infrastructure that we need to fund. But entirely shifting the revenue mechanism to sales tax would be a poor way to accomplish a stable revenue source, that equitably applies the revenue stream to the users.
I hated gassing up my old Dodge Ram…but it was paid for, so dropping 25+ gallons in it every 2 weeks wasn’t so bad. But, it still sucked to spend over $200 a month on commuting. So, once that old beater died, I more than doubled my fuel efficiency with the Focus I now drive. We still have our SUV though, and will be putting a good $1500-2000 into it over the next 6 months to make sure we get another 5-6 years out of it before we replace it. Even though it only pulls 18-19 mpg, it can haul a trailer with ease and is great in the snow.
Several good points here, but I think OJ makes wicked good sense in his comments on January 8, 2013 @ 7:11 pm.
In terms of road usage, how much fuel a vehicle burns is less the point than how much space the vehicle takes up, its weight, and how many miles it drives. There are hybrid SUVs out there which use less gas but still weight a ton, tear up the roads, and eat up a lot of space. Increasing gas taxes on them, while a start, still doesn’t necessarily account for their actual impact on infrastructure. And as mileage standards improve, more and larger vehicles will use less and less fuel while still driving the same amount (or more) on increasingly deteriorating roads and bridges.
If the concern is with the environmental impacts of burning fossil fuels, then a carbon tax is the appropriate solution. But we’re really talking infrastructure and mobility needs, which impacts gas-guzzlers and gas-sippers alike. In the latter gas, hybrids get a really sweet deal – they get to contribute just as much to congestion and infrastructure costs, while paying less into the system.
Bikes and pedestrians are a different story in my mind – their impact on road maintenance is zilch, so you’re talking about access and safety issues more than anything
Hey Suzie,
Yes, we have to take the libs’ abuse, ’cause it’s dano’s blog, and he is their leader, and they are his posse. That’s all right. ’cause at the end of the day, they are still libs, and thankfully, we’re not.
Kristen: I am a HUGE bike and transit supporter, but still recognize that buses need good roads to drive on to get their riders where they need to be and the best accommodations for cyclists are bike lanes or facilities parallel to existing roadways.
For example, an interesting impact of the recent 496 Express Lane project in Northern Virginia is for the first time buses can take the beltway, because they get to ride in the HOV lanes for free, and the tolls there are doing a good job of managing congestion such that the transit systems can accurately predict their travel times. So, transit riders are a huge beneficiary of that road-building project.
hey sandi,
your last post kinda makes me wish i was wealthy and had an SUV…
by the way, I think Jeremy Holmes has the right idea.
sandi cannot answer the question…….didnt think so, liberals are moistly hypocrites
uh oh spelled ‘mostly’ wrong, so sorry sandi, I meant to spell it so you would understand…..
Frank, I’m glad that you grasp the definition of that big, scary five-letter word. However, your grasp of its usage is a little suspect and your application to context is entirely too broad in this case. Your use of the word “might” was in reference to “enjoy a boost in disposable income”. That’s like saying I might enjoy winning the lottery. I also might enjoy a steak dinner tonight. “Might” in your reference is simply a modifier for the verb “enjoy”, nothing more. I neither misunderstood nor misconstrued your usage of the word “might”. You’re a dog chasing parked cars, man.
And since your entire premise was erroneously based on RT carriers benefiting from lower gas prices, your logic train derailed while still sitting at the depot, “might” or no “might”.
One would think that someone who can barely form a coherent sentence and struggles with cogency in his arguments would stay away from grammatical and definitive condescension. In this case, obviously, one would think that wrongly. For future reference, it’s better to just say, “I stand corrected” when these scenarios arise.
——————-
Suzie, I simply asked Frank a question and I can’t speak for Dan’s commentary. With his finely crafted and carefully constructed “argument” outlined at 8:40AM, Frank eloquently answered my question as only he could.
Pammala, are you channeling honey boo boo today?
what is a honey booboo..no, just wonder why sandi cannot answer thats, because if she does, she will be a hypocrite either way…lol
76 thank GOD !!!
BTW, I’m not *entirely* sure that the sales tax increase is the correct fix, but the fact is that, both statewide and nationally, gas taxes fall far short of paying for transportation needs so both the state and feds move large amounts of general fund revenue into the transportation system. It’s already heavily subsidized, so I’m not sure there’s a *whole* lot of damage done in stopping pretending that the gas tax is a user fee, and instead just raising the money the system and services need.
If the gas tax was raised sufficiently to cover the infrastructure, environmental, and social costs of driving, we’d probably be looking at per-gallon prices near European levels. This would certainly discourage driving and mitigate the costs above, but would also be regressive in a state/country where most people don’t have access to transit, rail, or other alternatives.
In other words, it’s tricky.
I say abolish the gas tax entirely, and the 16th amendment (income tax) while we’re at it. I don’t mind the sales tax on gasoline and I really think our country would be much better off with the FairTax in effect. People should be taxed on what they spend, not what they earn.
-My wallet, after learning that FICA went up 2% this year on all wage earners.
pammala, nobody has the slightest idea what question it is you want answered, so your incoherent babbling is getting nowhere. You referred to post #52 and then 13 minutes later sent out a blast of fetid gas. But the question by Marjorie Joyce at #52 has already been answered.
You really don’t ever make much sense, do you?
“BTW, I’m not *entirely* sure that the sales tax increase is the correct fix, but the fact is that, both statewide and nationally, gas taxes fall far short of paying for transportation needs so both the state and feds move large amounts of general fund revenue into the transportation system. It’s already heavily subsidized, so I’m not sure there’s a *whole* lot of damage done in stopping pretending that the gas tax is a user fee, and instead just raising the money the system and services need.
If the gas tax was raised sufficiently to cover the infrastructure, environmental, and social costs of driving, we’d probably be looking at per-gallon prices near European levels. This would certainly discourage driving and mitigate the costs above, but would also be regressive in a state/country where most people don’t have access to transit, rail, or other alternatives.”
Jeremy, the failure of gas taxes, both in Virginia and nationally, to cover the costs of transportion infrastructure is entirely due to the lack of political will by lawmakers to ensure fuel tax revenues keep up with inflation. For pete’s sake, the last time it changed in Virginia was 1987, to 17.5 cents. It would take exactly 35 cents per gallon tax in 2012 to have the same buying power today.
They should act responsibly and raise it PLUS index it to inflation (and yes, something needs to happen with bybrids and elec vehicles, too) instead of putting forth sound-bite-friendly and cockamamie (but regressive) schemes to “abolish the gas tax” and substitute that with a general sales tax.
Bikes and pedestrians are a different story in my mind – their impact on road maintenance is zilch
If only that were true. There are still maintenance and construction costs related to bike and pedestrian facilities…and at present, they are funded through vehicular user fees like fuels taxes, because the revenue streams that fund their maintenance and construction generally come from the same pool of money.
Look at things like the New River Trail and the Roanoke Greenway system. That takes several million dollars to construct…and over time the trail surfaces must be maintained…sometimes re-paved, and repairs from storm damage, etc. Plus, where there are bridges…those must be inspected and repaired from time to time. With sidewalks, over time the concrete can degrade and crack, and must be replaced.
So while the users may not do nearly the physical damage of say a 3-ton truck or a full-size car, there are still costs borne by non-vehicular users of the transportation network. And, as such non-vehicular systems become more widely used for both recreational and commuting purposes, the need to expand them will increase as will the maintenance responsibility for them.
Presently, maintenance fees are based on lane-miles of roadway…the trails and sidewalks are not given a specific pool of funding, to my knowledge.
I actually agree with the proposal, since overall it is supposed to bring in more revenue. I am honestly surprised that more conservatives are not up in arms about this fact. I guess it’s OK if a Republican does it. Apparently, the gas tax will remain on diesel so truckers will continue to pay, which is good.
g until you can make out the difference between 42 and 52 I shall not discuss anything with you dearie
is that all you have to do g is to calculate how much time is spent from the time one might post something and when another might post something else?..what a boring existence…get a hobby
There are plenty of public services that rely on the public transportation infrastructure that benefit all citizens and currently are exempt from paying the gas tax. Fire and rescue, police, garbage collection, public transportation to name a few, why shouldn’t all citizens help pay for these services use of the transportation infrastructure by adding to the sales tax. Trucking which puts the most strain on the infrastructure will still be paying the fuel tax on diesel.
Also, I don’t see how this plan only benefits the rich, the rich typically have a higher discretionary income and therefore spend more, which means they pay more. Additionally, from what I read on the Blue Ridge Caucus I don’t think groceries are included in the full sales tax.
Dan: In Virginia, unless there was a massive new investment in transit, rail, and park and ride projects, a huge increase in the gas tax might be just as, if not more, regressive to Virginia’s rural drivers than a sales tax. Take Craig County, for example – almost all the residents there drive significant distances to get to work in Roanoke or Blacksburg. A European-level gas tax without an alternative transportation option would be a huge financial burden. In Northern Virginia and other places where there is robust transit and rail, a lot of those residents have the option to avoid gas taxes by moving to rail and transit (which is still paid for through gas taxes, of course), even if they did so grudgingly. I think the dynamic may be more complicated than you give it credit for.
Of course, I will agree that we find ourselves in this situation because of a lack of political will to do the right thing with the gas tax years ago, the increase of which – indexed to inflation – might have resulted in a more gradual effect on transportation habits and development patterns resulting in shorter average driving trips. But, we deal with the system we have, not the system we want, and there are winners and losers both ways.
I think there *could* be a benefit in treating transportation like we do every other public benefit. For folks like me who work in alternative transportation, it would be nice to no longer have to go begging for a percentage of gas tax money to fund transit and bike projects. Its perception as a user fee does create some parochial interests – often, gas taxes paid for by drivers is considered *their* money, so people wanting bike, ped, and transit projects are left in the position of arguing that their projects benefit drivers in some way (I agree with this statement, by the way – bike, ped and transit projects do benefit drivers in a number of ways), rather than arguing from the public benefit of the projects themselves, whether social, environmental, or economic.
At any rate, I’m not reflexively opposed. I’d like to see more about how much money it will raise and how the increased rate affect various economic sectors. I do think it would indicate a fundamental shift in how the state views transportation philosophically – from a system paid for by its users, to a recognized public good regardless of whether or not its used.
Another way to think of it: We don’t have a “kid tax” to fund public schools – education is recognized as a public good, so citizens pay into it whether or not they have kids in school. Can transportation be considered analogous? Should access to safe, convenient transportation systems and services be an option for all citizens, whether or not they are using a particular element of it?
(Note: I just now thought of this analogy so be kind when shooting holes in it, which I’m sure can be done easily enough).
“People should be taxed on what they spend, not what they earn.”
Why?
Oh Frank, there are none more grateful than I that you and I are not on the same “team”. Thankfully indeed!
hey J.M.,
well you and i could go on and on and on about what the meaning of the word “might” might be. seems to me that’s a pretty common lib tactic.
that said, i still think that’s it good that the both of us have had the opportunity to have learned something from our exchange. And, to go a step further, i think that it’s good that ol’ dano enables us to expand our knowledge on his blog.
thanks, dano.
Some quick napkin math. Since I have no data to back this up, nor the time to dig it up, let’s just say (for argument’s sake) that everyone who fills up gets 10 gallons per week. I realize a really low number for some people and a really high for others (I’m closer to 4-5/week, personally), but the number should be good to illustrate the point.
0.175 – gasoline tax, per gallon, in Virginia
10 – average gallons filled per week
52 – weeks per year
8,185,867 – residents in Virginia per the 2010 Census
Again, for argument’s sake, we’ll say there are 3 million cars in Virginia. That’s slightly more than 1 car for every 3 people. Probably a low number but I’m also taking into account people who don’t drive and people who can’t drive.
.175 * 10 * 52 * 3,000,000 = 273,000,000
That’s $273M that goes back into the pockets of Virginians to be spent… and taxed at a rate of 5.8 percent. Last time I filled up, gas was $3.159 / gallon. If the sales tax is applied to the cost of fuel…
($3.159-0.175)*1.058 = $.3157
You lose $0.002 on every gallon of fuel purchased.
$0.002 * 10 * 52 * 3,000,000 = $3,120,000
That’s all that’s “lost” in tax revenue… until you take into consideration that sales tax revenue on everything else went up 16%. That’s a net GAIN in revenue.
There’s the math. Now, tell me again how you can oppose the idea of abolishing the gas tax, especially if -everyone-, even people coming from other states, have to pay sales tax on the gas instead?
Why pammala, I would sooner wilt away and die than not answer one of your substantive questions.
“oh so if its transporation, of utmost importance here, sandi doesnt like to pay for what others use….uh sandi, what about abortion and birth control in obamacare? do you still feel that way?”
I suppose you are not aware that McDonnell was already using general fund money on transportation? We are already ALL helping to pay for transportation.
As I already said, there are some things that absolutely should be mainly funded by user fees, and transportation is one of them. Mainly because there are choices that users make that impact us all and the sacrifice to buy a hybrid or small high fuel economy car instead of a luxurious SUV (about the same price) is one of them. This will punish the conscientious and reward the self indulgent. (Yes, it will help those who drive what they can regardless of mpg too)
There are also items that we, as a society have to contribute monies for to help us all out. I am happy to pay my part for birth control for all and wish many more used it. I believe in a woman’s right to choose abortion, so I am comfortable with helping to pay for it, but I am not at all clear how it is you think I or “Obamacare” do that.
Any more questions from that inquiring mind of yours?
I don’t think you can say this plan “only” benefits anyone. But it certainly removes the penalty that gas guzzling vehicles and behemoths have been paying for their privilege while punishing those who pay/paid for the hybrid or smaller more compact car with better fuel economy. That it definitely does. In the end, it will likely be a wash on “the difference”, if not a gain for many road warriors, but the regressive nature of a consumption tax hits the poor the hardest for obvious reasons and in this case they are often the ones not owning or driving a car at all.
For those who were so concerned over the meals tax addition for schools instead of raising property taxes I cannot see a difference, but you apparently do.
Other John: You’re largely right, though the off-road trails like the Roanoke greenway system are often funded by a mish-mash of programs not directly related to transportation. Chunks of the Roanoke River Greenway, for example, were Corps of Engineer projects that were integrated into flood plain improvements. In some cases, greenway sections were funded in part or in full by private contributions, such as those made by Novozymes or Carilion. That said, on-road accommodations are generally built and maintained as a percentage of transportation spending. I suppose what I meant by having an impact of zilch was in terms of the wear and tear a bicycle has on the road, which is effectively none. Even new accommodations are often done within the existing road footprint as part of a repaving/restriping project that narrows the vehicle travel lane to add a bike lane or striped shoulder. So, while you could apportion that percentage of road work to bicycles in terms of assessing user fees, the reality is that the road would have been paved and striped in just that way regardless, and it was just a matter of where the stripes where positioned on the road.
All that said, a benefit of the sales tax might be that it gives alternative transportation users a larger voice in how transportation systems and services are built, since now *everyone* is paying the taxes that support the system, rather than just drivers.
nope got the pat answer I expected, which doesnt make it a real answer…hypocrite
Sandi,
I’m actually opposed to ALL of the following taxes (list not all inclusive):
* income and payroll taxes of any kind
* personal property
* business taxes of any kind
* meals – just make it part of the sales tax and give the local communities a portion of it
* usage taxes of any kind – especially gasoline since I can prove to you, unequivocally, that government makes more money per dollar (profit margin) on the taxes from a gallon of gas than the fuel companies do and one is providing a service and creates jobs while the other simply spends money
Except for sales tax, the only taxes I’m in favor of are intended to punish behavior whereas abolishing the other taxes above encourage behavior (owning property, starting a business, earning as much money as you possibly can) and would argue a progressive income tax (which is part of the Communist Manifesto) is actually regressive in nature because it punishes those who work hard. As Dave Ramsey says, 80% of millionaires (people worth $1M or more, not people who make $1M or more) are 1st generation rich.
I’m in favor of a sales tax because government does have to earn -some- revenue, and with a sales tax you’re taxed on what you spend, not what you make. People who make more typically spend more.
I’m in favor of (not inclusive):
* cigarette taxes (reward the behavior you want to encourage, punish the behaviors you don’t)
* alcohol tax (same)
* INCLUSIVE sales taxes on all new items and all services – no exemptions
The more you spend, the more you pay. Plus, a sales tax brings in revenue from illegals, people visiting from out-of-state/country, and those who earn their income illegally such as drug dealers. And by no exemptions, I include medicine, home sales, charging the full rate on car sales, etc. Bear in mind that I’ve already ruled out all other taxes in the process, and since (on average) 23% of every item you purchase is imbedded taxes (business taxes, payroll, matching FICA, etc), the natural process is those prices will go down… but then go back up with an inclusive income tax that compensates, but you now get to keep 100% of your paycheck. You doubt the prices will go down and companies will try to keep more, I point you to when some of the airline taxes expired in the 80s. Most of the airlines considered keeping the extra money rather than lowering prices, but then ONE airline lowered its prices and everyone else in competitive response. Unfortunately, Congress realized the tax lapsed and renewed it the next day.
And I say inclusive sales tax because that’s how the income tax is quoted, so if your income tax rate is 20% on $1,000, you paid $200 in income taxes. If the sales tax rate is 10% inclusive, and you spend $100, $10 of that 100 is taxes. If you want to quote one exclusively ($10 of 90 is 11.11%), then you need to do the same for the other ($200 of 800 is 25%)
“g until you can make out the difference between 42 and 52 I shall not discuss anything with you dearie”
pammala, here is EXACTLY what you said in post #63
“@52 so can dany or any other liberal answer this question…..”
What is that number there? Yep, looks like a 52.
God, pammala, can your posts get any more illiterate? How much are you drinking right now?
“is that all you have to do g is to calculate how much time is spent from the time one might post something and when another might post something else?”
pammala, darling, I know it’s a supreme time-cosuming effort for you to calculate the time between two posts that are right together, what with all that higher-level math involved. Shucks, you can’t even determine the difference between a 42 and a 52. But it took me maybe a second or so. Didn’t eat up too much of my day.
Forgive me i this has been posited before, but could it be that McDonnell is simply trying to head off any effort to raise new revenue for any road work? Has he proposed something that he knows hasn’t a ghost of chance of passing but which will distract folks from the more rational and needed effort to fix the gas user fee?
Donald, I think that being “against” taxes is your problem. They are not going anywhere. Even in this case, the tax just got shifted. I think you are being naïve if you think that shifting to a consumption tax means everyone will be paying the sales tax. They don’t now.
The reality is that the poor and the low-income working poor spend virtually all of their income surviving. They literally cannot save like those who actually earn more. They have no “disposable” income to speak of and therefore any sales or consumption tax on any product will hurt them the most. It is simply a fact. That is why the Fair Tax has always included a “prebate” in its system, to combat that regressive taxation on the poor.
There is no way around this tax not hurting the poor and the working poor.
Those of lesser income “typically” have to spend all of it just to get by. People with higher incomes can live with spending a relatively small proportion of their income. So what we have is poor people being taxed 100% on what they make, while the rich skate by (no way!) with whatever tax rate they feel like paying that day.
Donald, for starters, the sales tax would not be applied to fuel sales; all of the revenue on gasoline sales in the form of state taxation is eliminated. Looking through some data (from a state tax revenue information PDF), the state collects about $850 million a year through fuels taxes…and, as I learned, they are NOT collected at the point of sale by gas stations, nor are they directly paid by the consumer any longer. In 2001, the taxation structure was revised so that the taxes are levied at the terminal, rather than the retail point of sale. So the fuel arriving at the station has already had the tax applied and paid. That change was made to improve collections rates on fuel sales, by reducing the number of tax-remitting entities and to clean up the fuel wholesale transfer potential, which resulted in a lot of untaxed fuel being consumed. Unfortunately, state data did not differentiate between gasoline, diesel, or aviation fuel taxes. Our fuels tax rate is lower than all our neighboring states (and only 7 have a lower rate).
Sales tax revenues at the 5% rate (and 2.5% for groceries) yield close to $3 billion a year in revenues, or about 20% of total General Fund revenues. Our sales tax rate is lower than all neighboring states, except Maryland…which also has a 5% rate (and only 6 nationwide have a lower rate). Data did not differentiate how much of the revenue was from general goods vs. how much was grocery sales though.
So, let’s assume 2/3 of fuel sales are for gasoline and 2/3 of the sales tax revenues are from general goods (taxed at double the grocery rate)…since that data is not available. That would lop off about $550 million in fuels tax revenues, give or take a bit. Boosting the sales tax rate on non-grocery items would yield about 320 million in new revenue…a lower net total than lost revenue from fuel sales.
Looking at the news release, my estimate is actually a tad more generous for new revenues…the Governor’s plan says about $280 million in new sales tax revenues. It’s clear that the change of fuels to sales tax is not a revenue gain, or even revenue neutral plan by that switch alone.
But, there’s also the vehicle registration fee increase (read, tax increase) of $15. There are about 7.5 million registered vehicles in the state. That fee increase translates to $112.5 million in new annual revenues, which closes the gap on the shortfall.
Then, the $100 annual fee on hybrids and other alternative fuel vehicles. One source mentioned there are 91000 alternative fuels vehicles in the state (though how many are agency-owned, it did not say). The new fee would levy $9.1 million in new revenue.
Another aspect of this is collecting retail sales taxes on online purchases…to close that tax loophole. Technically, Virginians are supposed to remit the tax in their income tax filings, by keeping track of untaxed online purchases and calculating the applicable sales tax. Unsurprisingly, very few people do that. According to the Governor, fixing this loophole would generate the remainder of new revenues needed to have his plan work.
But, according to the Governor, It would be revenue-neutral at first, but McDonnell anticipates that over the years, the sales tax revenue would grow, and grow at a larger pace than the gas tax would have. He said the sales tax is a more appealing tax than gas, because it’s more likely to grow. So, we’re relying on fuzzy future projections on growth that are hard to predict, in order for this to actually create those *NEW* revenues of $3 billion over 5 years.
And, as if it weren’t bad enough, even Grover Norquist has opposed this measure and has chastised several Republican leaders in the state for proposing it…saying that all new revenue sources should be offset by other tax cuts, that the sales tax rate should be increased by a smaller amount, all fuels taxes should be eliminated, and that revenue dedicated to other areas of state funding should be shifted to transportation instead.
http://news.fredericksburg.com/newsdesk/2013/01/09/mcdonnell-proposes-sweeping-changes-to-transportation-funding/
Just off my own estimates for myself and my wife, I figured what our net change might be…to satisfy my own curiosity. It turns out this would be a net cut in our taxes, of about $3 a month. Our driving patterns yield about $140 a year in fuels tax revenues to the state. Dropping that and calculating the sales tax % increase would generate only about $70 more a year through that, because we do not purchase many consumer goods…plus $30 for vehicle registrations since we own 2 cars. Net difference is -$40 a year.
The only aspects of this proposal that truly make some semblance of sense are the online sales tax correction, and the alternative fuel vehicle fee of $100 a year, because the online sales should be subject to taxation anyway…and the new vehicle fee translates roughly to the lost potential in fuels sales taxes through the reduction or elimination of traditional fuel consumed. But those things should be done anyway, independent of monkeying with the fuels tax and sales tax rate.
@Dan, thanks for the follow up posts. Kinda made you think for a few minutes economically instead of just emotionally.Math a little fuzzy. Perhaps a win – win for us both.Enjoyed the blog.Cheers!
What makes anyone think that gas prices will go down? These money hungry companys are NOT going to lower the prices after working so hard for so long to get them up to where they are now. They will just find some other way to scres the american public. And do the math—-if you buy 40 gallond of gas a week for 52 weeks thats about $225 give or take a buck or two while spending $20000 in a year at 5% tax is $1000 and at 5.8% its $1160. Besides, I already have a deal with the Va Dot from back before McDonald wasm gov. You can’t keep our rest areas open and my highways fixed with the money that I already give you I’ll buy my fuel in Tennessee before I come back home and it will last til the next trip to Tennessee especially when I see state DOT workers sitting in state DOT trucks asleep when they are supposed to be working. MY rant is over!
Gas prices wont go down because of this. This will just encourage local distributors to take a larger profit.
What this also does is creates this label where we have no gas tax, brought to you by republicans. Look what The Republicans did! they eliminated the gas tax!!! YEE HAW!!! It’s a good talking point, but it ultimately will only help the oil companies.
I remember how well the ‘No Car Tax’ thing worked out for the state…
And I was on Gilmore’s campaign to get him elected with that.
Mistake.