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Low Gas Prices Are Igniting Pushes for Increased Gas Taxes

Feb. 8, 2016
by Bob Adelmann

For politicians with insatiable appetites for other peoples’ money, the best time to mulct taxpayers is when they aren’t paying attention. Especially when they are already enjoying savings of an estimated $550 a year in lower gasoline costs.

Most drivers have no clue as to what they pay in taxes when they fill up at the pump. Unless they live in California where the combination of state taxes (40.62 cents) plus 18.4 cents federal is almost 60 cents a gallon. Or Hawaii (42.35 cents state plus 18.4 cents federal) where it’s almost 61 cents a gallon. Or New York (42.64 plus 18.4) where it tops 61 cents a gallon.

Washington state takes the cake: 44.5 cents state plus 18.4 federal for a total of nearly 63 cents a gallon.

Elsewhere? Who cares? The average is under 50 cents a gallon state and federal. With gas prices dropping in half since 2014, this is pocket change.

It’s time to pounce. On Thursday the White House announced that President Obama will shortly be requesting that Congress raise taxes on imported oil by $10 a barrel which, when translated into costs at the pump, is a measly 22 cent increase. Nobody will notice that. Besides, it’ll never happen. This being an election year, and Obama running on fumes, and the Republicans owning both houses of Congress, Obama’s announcement will be a waste of perfectly good oxygen.

For the states, however, it’s a different matter. State directors for Americans for Prosperity had a piece in the Wall Street Journal that exposed efforts, even by Republicans, to take advantage of gas prices while they are down.

In South Carolina, for instance, Governor Nikki Haley said in her 2013 State of the State message that

I will not – not now, not ever – support raising the gas tax. The answer to our infrastructure problems is not to tax our people more; it’s to spend their money smarter.

But that was just for show. In January she proposed a gas-tax increase of 10 cents a gallon. She tied it to a 2 percent cut in the top income tax bracket (over ten years), and it was passed by the state House but died in the Senate. Last month she tried again. The bill is pending.

Indiana motorists pay 29.89 cents per gallon in state taxes, which added to the 18.4 cents in federal tax totals nearly 50 cents per gallon. But there’s room for more, according to Republicans in the state House that just passed a gas-tax increase of 4 cents per gallon, which if enacted would push Indiana into the highest third of all states in gas taxes. To add insult to that injury, the House would index the state’s gas taxes to inflation, resulting in perpetual tax increases without having to bother the state’s politicians in the future.

Indiana Governor Mike Pence doesn’t like the idea:


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