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Old Posted May 10, 2010, 5:10 PM
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202_Cyclist 202_Cyclist is offline
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Join Date: Feb 2009
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Please raise my gas taxes!

Please raise my gas taxes!

If the gas tax were to increase one dime year for each of the next five years, many people would actually end up saving potentially significant money. The federal gas tax is currently 18.4 cents per gallon, thus the first year of the increase it would be 28.4 cents per gallon until it reached 68.4 cents per gallon at the end of year five. The new revenue from the new gas tax could then be used to provide very generous tax credits for the purchase of electric vehicles and fund a significant expansion of transit (bus, rail, streetcars, etc…). A gradual increase in the gas tax would give people time to adjust to the increased fuel costs by purchasing a more efficient vehicle, finding carpool partners, or moving to a more transit-accessible neighborhood.

I calculated the potential savings (or costs) of the higher gas tax for two alternatives. First, I assumed that I would purchase a new car that gets 10 miles per gallon better fuel mileage in year one of the program. My current vehicle gets approximately 25 mpg and I assumed 35 mpg per gallon for the new vehicle. I also assumed a one percent annual decrease in my annual vehicle miles traveled for years one through four, followed by a ten percent decrease in year five. This is probably a realistic assumption since quadrupling the federal gas tax would provide significant revenue to accelerate the development of transit options. This is based on currently driving 7,000 miles per year.

Under this assumption, with the current US average price of gas at $2.898 per gallon (I subtracted out the federal gas tax, so the price per gallon is $2.714), I would use 448 fewer gallons of gas and save a net of over $1,000 for the five year period.

The second scenario assumes I continue to drive my car that gets 25 miles per gallon until year five of the higher gas tax. Like the previous example, I continued to assume that I would drive one percent fewer annual vehicle miles traveled from years one through four, followed by a ten percent decline. During year five, I would purchase a vehicle that gets 35 miles per gallon.






Under this second scenario, I would consume over 100 gallons less gas for the five year period but pay a combined $53 through the five years for higher gas taxes. I would consider this a pretty fair bargain for the expanded transit that I would have helped finance (with all of the construction jobs that would be created) and less oil money going to Middle East countries hellbent on getting nuclear weapons and petrodictators.

This is just a very quick estimate of my own monetary savings. It assumes current transit technology (not high speed rail crisscrossing the nation) and cars that are available today (regardless of how much I would like to see everyone drive an electric vehicle). I did not include social benefits nor did I include the reduced annual vehicle maintenance expenses from driving less, which would have saved me even more money. Nor does it include travel time savings that I would benefit from with people driving less each year.
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