Should We Tax Gas While It’s Cheap?


Who doesn’t love low gas prices?

There’s a certain glee that one gets while driving through a city or down a highway and seeing those glowing gas station signs displaying prices that start with a one.

As of this writing, the national average price of regular unleaded is $1.77. You can fill up a thirsty Tahoe for around $45, which is a huge relief when compared with the $100 fill-ups that were common just a few short years ago.

When gas prices are this low, sales of SUVs and pickups go through the roof, while electric vehicles tend to languish on dealer lots for much longer.

The president has a plan that he hopes could spark some EV sales and help reduce consumption of cheap, easily available gasoline. The odds of his plan being implemented, though, aren’t good.

The U.S. government currently collects a tax of 18.4 cents per gallon. President Obama has proposed an additional tax of $10 per barrel of oil, which would be paid by the oil companies, to help fund transportation improvements and additional infrastructure.

Transportation Secretary Anthony Foxx told reporters,

Businesses waste tens of billions of dollars a year in freight costs due to inadequate infrastructure. More cars stuck in traffic mean more pollution, and the strains on our transportation system are only going to grow. The infrastructure we have was not designed or built to fit the realities of a changing climate.

The goal of the tax isn’t just to raise money, but to create incentives for states, cities, and the transportation industry to reduce consumption and carbon emissions.

Since the tax would need to be approved by Congress, the odds of it happening are virtually zero. If it did happen, though, the extra cost would likely be passed down to the consumer as slightly higher gas prices. An increase of $10 per barrel translates to about 25 cents per gallon at the pump. At these low prices, even that increase probably wouldn’t drive too many consumers into electric cars.

Everyone knows that it’s better for the environment to cut down on our use of gasoline and other fossil fuels, but when gas is this cheap, people just don’t seem to care.

What’s more important to you: low gas prices or a cleaner environment?


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1 Comment

  1. We all know the price for gas will go back up. The question is just when. We here we need to be more like Europe. REALLY? They seem to have a lot more problems. Gas does not need to NOT increase!

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