Va. governor: Tax alternative fuel vehicles, not gasoline
Americans have a weird fetish about gasoline prices. We tend to see the prices posted on the corners near our houses as some indicator of the nation’s economic health as opposed to a reflection of the amount international traders are willing to pay for a barrel of oil. As a result, politicians love to make promises about the extent to which they would reduce the price of gasoline; Newt Gingrich rode a lower gas prices pledge all the way to … winning one state in the 2012 primaries.
But pandering politicians have met their match in Virginia Gov. Bob McDonnell. From The Hill:
McDonnell, who was considered a potential vice presidential nominee for Republicans in 2012, said his state would be better off without the 17.5 cents per gallon tax on gasoline.
To replace it, McDonnell is calling for a 0.8 percent increase in Virginia’s state sales tax to generate revenue that would be dedicated to transportation.
There are, by my quick count, nine ways in which this is stupid. But before articulating them, here’s McDonnell’s rationale.
“We simply cannot continue to do what we have always done and expect this problem to go away,” McDonnell continued. “The gas tax is a stagnant revenue source, and no changes to it will provide a reliable growth mechanism for transportation in the state.”
Yes, right. Since the gas tax doesn’t raise enough revenue for the state’s needs, the obvious solution is to eliminate it entirely. Just as the best solution for America’s budget deficit is to eradicate the income tax, since it doesn’t cover the bills.
Slate’s Dave Weigel explains why McDonnell’s push for an increased sales tax is a bad idea.
So, if you don’t drive — if you just make use of public transportation (which you pay for) and goods transported on the highways (the prices of which take into account things like gas prices/taxes) — you pay more, and the guy who fuels up a car pays, effectively, less.
Pretty good deal, right? McDonnell has another winner, too. His proposal calls for a $100 annual fee on alternative fuel vehicles since, you know, those vehicles don’t fund road maintenance by paying the gas tax. Which he wants to eliminate anyway.
Who would benefit from McDonnell’s proposal? People who buy gasoline, certainly, since they would likely buy much more of it. Meaning that oil companies, too, will benefit. McDonnell has been outspoken in courting fossil fuel interests, inviting them to conferences and carrying their water in policy initiatives. It’s clear that Big Oil has McDonnell’s ear.
The man McDonnell appointed to act as his secretary of transportation nonetheless argues that this is a good deal for Virginians.
“Over the course of the next five years, this innovative plan proposed by Governor McDonnell will generate more than $3.1 billion in additional funding to be invested in the Commonwealth’s transportation network,” said Secretary of Transportation Sean Connaughton.
Of course Connaughton would think this is a good idea. He used to work for the American Petroleum Institute.