California gas tax going up 3.5c/gallon July 1st

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Interesting stats leading up to the tax increase:

1. Gasoline sales are down from 15.9 billion gallons in FY2006 to 14.6 billion gallons in FY2012.
2. Gasoline sales are down about 2% for the first two months of 2013.

Really going to have to sell that Prius for a plug-in that gas tax is going to cost me about an extra $7 / year!

Humorous to see all the anti-tax commenters out in force on the news... One local news source spins their headline by calling it a "10 percent gas tax rise". Never mind that fuel taxes still aren't high enough to cover road maintenance and that the 3.5c increase in tax is less than a 1% increase in the total price.

The price of gasoline remains well below what it should be, considering the environmental/health consequences of its use and the fact that it's not a renewable resource. Right now, in this heat wave, my family is breathing significant ozone pollution largely because of the millions of polluting vehicles in the valleys below us. Down in those valleys, the overall air quality is of course even worse. That's not to say significant progress hasn't been made in addressing California's air quality issues, but we still have a long way to go.

Unfortunately America is still accustomed to the notion of cheap gas, so much so that a few folks actually think it's a RIGHT to have cheap gas :roll: Then they complain about our crappy roads. Never mind that 3.5 cents/gallon only adds 70 cents if you pump 20 gallons in.

One of my pet peeves: the "gas tax" is a misnomer*. It is not a tax in the way that most taxes are implemented or understood -- i.e., as a percent of the price. If only. Were it tied to price, either the federal revenues would be way up in the past 20 years**, or consumption and pollution would be way down, or a lot more people would be buying, demanding and driving electric vehicles and, presumably, the industry would be that much further along!

Of course, even with appropriate taxation, the price would still be far less than the cost(s), but it would be a start. Too bad the suggestion of raising or changing it is verboten in D.C. -- it's almost as much of a proverbial "third rail" as changes to social security. Didn't it play a role in good ol' Ross Perot's defeat? I think he recommended raising it 10 cents per gallon per year for five years, or something like that, to help reduce the national debt. Twenty years ago!

* For the most part: the federal "tax" and those in about 3/4 of the states are fixed amounts, independent of price.

** The last change to federal gas fee (up to 18.4¢) was in 1993, when the national avg price was around $1.30.

drees said:

Humorous to see all the anti-tax commenters out in force on the news... One local news source spins their headline by calling it a "10 percent gas tax rise". Never mind that fuel taxes still aren't high enough to cover road maintenance and that the 3.5c increase in tax is less than a 1% increase in the total price.

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you can play with parsing how you label the tax increase all you care to.
it is both only a 1% increase in total cost and it is also a 10% increase in the TAX.
one huge reason the fuel taxes are not covering the costs of maintenance is the many diversions from the highway funds for NON highway projects.
bicycle lanes, mass transit subsidies and other schemes should not be funded by raids on the highway trust funds.
YMMV

abasile said:

The price of gasoline remains well below what it should be, considering the environmental/health consequences of its use and the fact that it's not a renewable resource. Right now, in this heat wave, my family is breathing significant ozone pollution largely because of the millions of polluting vehicles in the valleys below us. Down in those valleys, the overall air quality is of course even worse. That's not to say significant progress hasn't been made in addressing California's air quality issues, but we still have a long way to go.

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what should the price be?
are you willing to forgo the conveniences that you enjoy because "low" fuel costs?

mbender said:

* For the most part: the federal "tax" and those in about 3/4 of the states are fixed amounts, independent of price.

** The last change to federal gas fee (up to 18.4¢) was in 1993, when the national avg price was around $1.30.

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both comments are correct but you are ignoring the sales taxes that are also collected on every gallon of fuel that is pumped and that tax DOES increase as the price of the fuel increases

do any of you realize who makes the most money on the sale of a gallon of gas?

apvbguy said:

abasile said:

The price of gasoline remains well below what it should be, considering the environmental/health consequences of its use and the fact that it's not a renewable resource. Right now, in this heat wave, my family is breathing significant ozone pollution largely because of the millions of polluting vehicles in the valleys below us. Down in those valleys, the overall air quality is of course even worse. That's not to say significant progress hasn't been made in addressing California's air quality issues, but we still have a long way to go.

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what should the price be?
are you willing to forgo the conveniences that you enjoy because "low" fuel costs?

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I'm in favor of gradually increasing fuel taxes over a period of at least several years, giving everyone time to adjust and make different choices where possible. The goal is to push the economy toward greater efficiency, i.e., less fossil fuel required to achieve each dollar of GNP.

What should the price be? I don't really know. Maybe double what it is today, adjusting for inflation.

Yes, some goods and services will become more expensive. Many others will be less affected. I'm not personally worried about this.

The beauty is that higher fuel taxes (ideally, a broader carbon tax) are relatively simple to implement and do not require a giant government. In concert, I'd like to see corresponding reductions in other taxes, like income and sales taxes, rather than simply giving our governments more money. My fear, of course, is that the government would simply see this as another opportunity to increase spending or continue the current, excessive levels of spending. In the U.S., I feel that this needs to be a bipartisan effort.

Obviously, there is much convincing to be done. We need to start by acknowledging that we have a problem, that is, air pollution, global warming, and long term energy security.

apvbguy said:

mbender said:

* For the most part: the federal "tax" and those in about 3/4 of the states are fixed amounts, independent of price.

** The last change to federal gas fee (up to 18.4¢) was in 1993, when the national avg price was around $1.30.

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both comments are correct but you are ignoring the sales taxes that are also collected on every gallon of fuel that is pumped and that tax DOES increase as the price of the fuel increases

do any of you realize who makes the most money on the sale of a gallon of gas?

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Hmmmm? Let me guess.....Dubai? Saudi Arabia? Venezuela? Iraq? The Arab Emirates?

abasile said:

What should the price be? I don't really know. Maybe double what it is today, adjusting for inflation.

Yes, some goods and services will become more expensive. Many others will be less affected. I'm not personally worried about this.

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sir,
maybe you are not aware of how energy prices are part of just about everything in the economy, doubling the price of energy is not the answer to cure the woes you think society has. maybe YOU are not personally worried about the costs of living skyrocketing but I bet many people are not willing to endure the pains your ideas would inflict on them

derkraut said:

Hmmmm? Let me guess.....Dubai? Saudi Arabia? Venezuela? Iraq? The Arab Emirates?

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typical, let me give you a hint, the answer isn't an oil producing nation, refiner, marketer or retailer

apvbguy said:

derkraut said:

Hmmmm? Let me guess.....Dubai? Saudi Arabia? Venezuela? Iraq? The Arab Emirates?

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typical, let me give you a hint, the answer isn't an oil producing nation, refiner, marketer or retailer

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I'm guessing the answer you're looking for is We the People then. Or "gummint", in hater-speak. You may not like the word 'taxes' or where they go, but technically, ideally, they go back to we the people and get reinvested to make the future better. If you (like many) don't like where they end up or feel your elected officials are corrupt or stupid, you are so far still free to vote to change things.

And just an fyi to derkraut and others: I believe a good 2/3 of our petroleum comes from North America itself, and less than 1/3 from OPEC countries. (Less than 'popular belief', but still not low enough!)

mbender said:

I'm guessing the answer you're looking for is We the People then. Or "gummint", in hater-speak. You may not like the word 'taxes' or where they go, but technically, ideally, they go back to we the people and get reinvested to make the future better. If you (like many) don't like where they end up or feel your elected officials are corrupt or stupid, you are so far still free to vote to change things.

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that is your view.
but I think that sounds like a bit parasitic rather than benevolent.
the "gummint", as you refer to it it has no "skin" in the game, takes no risks, and reaps most of the rewards, and please don't offer the so called subsidy canards.

mbender said:

And just an fyi to derkraut and others: I believe a good 2/3 of our petroleum comes from North America itself, and less than 1/3 from OPEC countries. (Less than 'popular belief', but still not low enough!)

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a good amount of oil, especially in the last couple of years because of the new fracking and tar sands recovery, is indeed produced here in the US and Canada however because of both poor logistics and environmental laws a lot of that oil will never get to where it can be used here in the US, for example the east coast still has to import most of their needs and we all should know about the fiasco in CA which causes high prices and supply disruptions

apvbguy said:

One huge reason the fuel taxes are not covering the costs of maintenance is the many diversions from the highway funds for NON highway projects. Bicycle lanes, mass transit subsidies and other schemes should not be funded by raids on the highway trust funds.

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Maybe, maybe not. More cyclists and more transit riders mean fewer cars on the road. That should mean lower maintenance costs. I don't have the numbers to know whether this is a reasonable payoff, but I don't think it should be called a "raid" until the numbers tell us it is a losing proposition over the lifetimes involved.

By the way, more cyclists and more transit riders also mean less pollution and an extension of the time before we run out of oil. I have no idea of how to assign payoff values to those, but the value is certainly not zero.

Ray

Well this should provide nice fodder for the people who spell my state's name with a "K". :lol:

Nubo said:

Well this should provide nice fodder for the people who spell my state's name with a "K". :lol:

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and those who call anyone with a divergent opinion a "hater" both are quite childish

mbender said:

And just an fyi to derkraut and others: I believe a good 2/3 of our petroleum comes from North America itself, and less than 1/3 from OPEC countries. (Less than 'popular belief', but still not low enough!)

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While generally true, what most people don't understand is that even if we produced 100% of oil consumed domestically it would not free us from world oil market pricing. Regardless of who is buying oil from the Middle East, for example, if another oil shock occurs because of some supply disruption—Iran tries to close the Strait of Hormuz, say—we would feel it in USA oil pricing as well. Oil is a "fungible" commodity, in econ-speak, and will flow to whoever pays the most. While producing all of our own oil would be nice from a balance of payments perspective, it won't free us from the world oil market pricing.

"Drill, baby, drill" isn't the panacea that some seem to think, when it comes to freeing us from the influence of OPEC and world oil markets in general. Using less oil, and using it more efficiently, so that it represents a smaller portion of GDP is a better strategy. By driving electric cars, for example...

On topic: kudos to the California Legislature. I wish we could do the same here but it would require a ballot initiative.

apvbguy said:

Nubo said:

Well this should provide nice fodder for the people who spell my state's name with a "K". :lol:

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and those who call anyone with a divergent opinion a "hater" both are quite childish

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If you're referring to me, I suggest you go back and read my words. Unless you admit to calling what the Founding Fathers created as "gummint", it doesn't apply to you. But if you were offended, that is one of many conclusions that you risk being drawn.

A lot of people claim to love their country but hate gov-ern-ment, taxes, regulation, and roughly half the people in the country, which seems to be a little crazy and contradictory to me.

-Yet another Kalifornian

apvbguy said:

abasile said:

What should the price be? I don't really know. Maybe double what it is today, adjusting for inflation.

Yes, some goods and services will become more expensive. Many others will be less affected. I'm not personally worried about this.

Click to expand...

sir,
maybe you are not aware of how energy prices are part of just about everything in the economy, doubling the price of energy is not the answer to cure the woes you think society has. maybe YOU are not personally worried about the costs of living skyrocketing but I bet many people are not willing to endure the pains your ideas would inflict on them

Click to expand...

I may have came off as a bit callous. Please know that I did not intend that.

While an optimal implementation of a carbon tax as I envision it would be offset by tax reductions elsewhere, and would thus not hurt the economy as a whole, some areas of business would clearly suffer. Some people would find their livelihoods destroyed.

The question is, are we as a society concerned about the effects of heavy fossil fuel reliance? If so, are we willing to take the medicine to address the problem? The medicine does have side effects, but hopefully those aren't nearly as bad as the problem we're treating. If you have a better recommendation, please share it.

abasile said:

If you have a better recommendation, please share it.

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while it would be foolish to say that man's presence here on earth has not altered everything about this planet I do not share the view that the sky is falling and we are causing a mankind ending catastrophe.
Your medicine is probably not palatable to the many millions if not billions who would not survive the treatment you envision.