In Katrina’s Wake: A Proposed Gax Tax Moratorium

Del. Ben Cline, R-Rockbridge, has called for a two-month suspension of Virginia’s gasoline tax as a way to buffer Virginia motorists from the impact of high gas prices. Over on the Road to Ruin blog, I discuss why this is a bad idea.

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  1. Oh…my…god…just when I thought politicians couldn’t get any more shameless…

  2. Oh, shameless…

    Lets get rid of the VA Gas Tax and replace it with a tax on political rhetoric.

    ~ the blue dog

  3. Steve Haner Avatar
    Steve Haner

    Oh no, I’m not falling into that trap. I’m not going to oppose this idea. At least these guys are proposing that the lost revenue ($175 million or so) be replaced from the General Fund. As a friend of mine said today (won’t name him) — let’s suspend all taxes and cover them with the General Fund! But from my position as an advocate for transportation, I think this is worth debating because most people are totally unaware that Virginia’s gas tax:

    1) Is one of the lowest in the US.
    2) Has not changed in close to 20 years, meaning that its real cost to consumers in inflation adjusted dollars is down more than 40 percent.
    3) Is absolutely the fairest way to pay for a general highway construction and maintenance program (tolls for specific roads can also be fair.)
    4) Is already shrinking because of consumer response to high gas prices. Collections were up less than one percent last year, and even without this moratorium I predict Virginians will pay less motor fuel taxes this year than last.

    And Paul, just what planet are you blogging from? The minute this was proposed in GA it was just a matter of time. They may have missed the peak timing, though — prices on Hull Street are starting to dip below $3.

  4. James Atticus Bowden Avatar
    James Atticus Bowden

    Let’s consider, analytically, two separate issues. One is the loss of capital per family spent on gas. The other is the gas tax.

    What is the principle that government is responsible for compensating for the variables in a global economy? Remember furniture manufacturing in Martinsville? Dot Com bubble in NoVa? Hog slaughter, now, in Smithfield?

    Frankly, I don’t see how providing economic relief – per se – fits under the Commonwealth’s constitutional duties.

    Now, watch carefully, as I talk out of the other side of my mouth. Promoting the General Welfare can include putting capital into the economy. Capital creates jobs.

    So, I am for increasing the economic health of the Commonwealth by compensating for a sudden capital loss across Virginia.

    Now, what about the gas tax? The gas tax is a good user tax. The GA needs to quit raiding the money for other purposes (doesn’t take a change to the Constitution, just a little discipline). Taking money from the gas tax revenue doesn’t help transportation needs.

    Also, letting the market deal with supply and demand means not screwing with price. Adjustments made to the market price will work – but need to get government to not screw with supply.

    So, GA could move out on Natural Gas exploration in the Atlantic – didn’t Gov Warner veto that? – and building refineries, nuke, etc – by working to reduce the regulatory burden while protecting the environment for the Common Good. Sound like a contradiction in terms? Not really. Just try it.

    In conclusion, this one voter is all for a rollback of taxes, but not gas taxes – like the sales tax increase and/or a specific reduction of say $10 per person (all persons) a month in Va income taxes ($40 for family of 4) a month for a year to get more capital back in our economy. ($10 x 7m Virginians = $70m @month) (Dear Econ Majors: I know there will be incongruenties in my proposal, but life isn’t fair – the point is to move capital)

  5. Anonymous Avatar

    What about property taxes? Aren’t they a direct tax on capital unrelated to cash flow or ability to pay?

  6. James Atticus Bowden Avatar
    James Atticus Bowden

    I am for reducing property taxes, but they don’t touch as many Virginians as sales and income tax if you want to deal with a capital shock to the economy – and the effect won’t be as fast.


    No car tax….Gilmore.
    Get elected.
    Walk away.

    No gas tax….Kilgore.
    Get elected.
    Walk away.

    Let Mark Warner clean up the mess in his next term.

    Will we never learn.

  8. Over on the Road to Ruin blog, I discuss why this is a good idea.

    Nobody’s proposing –except critics erecting strawmen– elimination of the tax; the proposal is a temporary suspension to mitigate a temporary price spike.

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