As you may have noticed when filling your tank, the plan for a gas tax holiday put forward by presidential candidates from both party brands, never came to fruition. The idea had been suspend an 18¢ per gallon federal tax on fuel from Memorial Day to Labor Day. Of course the fact that this would have saved average drivers a whopping $28 had little if anything to do with the lack of movement on bills from both Democratic Sen. Hillary Clinton and Republican Sen. John McCain. It turns out the real coup de grâce may have come from the road construction industry. The excise tax money which would have meant little to individual drivers, comes out to an aggregate $9 billion. That's money that is supposed to go toward building and maintaining roads around the country. Without that money, road construction projects would have to be put off. Canceled or delay construction projects would mean laid off construction workers, a prospect that no politician hoping to get re-elected relishes in an election year.

Rather than a tax holiday, drivers are in fact likely to see an increase soon. While high fuel prices have the benefit of pushing people to drive less, and consume less fuel, that starves the highway trust fund as well. As a result the fund is likely to be in deficit this year to the tune of $3 billion. As a result a fuel tax increase may be needed.

Looking ahead, we may need to start taxing electric bills to get funds to build roads. Even though electric cars use no petroleum, they still put wear and tear on the roads and it's only far that the drivers who use those roads should pick up the tab. Alternatively increased use of toll roads may be necessary, something proposed by Transportation Secretary Mary Peters.

[Source: Detroit News]

One of the most contentious issues in the discussion of how to wean ourselves off oil is fuel taxes. In spite of the campaign contributions that politicians get from car makers, when push come to shove on efficiency they get the short end of the stick. That's because in this country almost any politician that even hints at raising taxes on anything will get crucified by anti-tax lobbyists. So even though higher fuel prices (through taxes) will drive demand for more efficient vehicles, politicians find it more expedient to mandate higher efficiency from car makers regardless of what consumers might be demanding.

During the debate over CAFE standards most of the automaker representatives have repeatedly said the gas taxes should go up along with the efficiency mandates. If that happens they will have no problem selling more efficient vehicles. However, you rarely - if ever - heard that reported in the media, although we have written about it here numerous times. Now, Toyota is openly asking the question at the Open Road Blog. They want to know what people really think about gas taxes. What do you think?

[Source: Toyota]

Nobody likes taxes. Nobody likes high fuel prices. Combine the two and what do you get? Even higher fuel prices, which nobody likes. This might all seem rather obvious, but it is still relevant considering that there are movements to place higher taxes on gas for a variety of reasons. While many agree that drastic measures may need to be taken in order to wean the American people off of foreign oil, questions remain on just how to do that. Biofuels are an option, but there are significant drawbacks there; electric cars are a popular choice, but scanning the local paper reveals a dearth of current choices in the EV arena.

Consumers have shown that they are concerned about global warming, yet when polled (.pdf link) by the National Center for Public Policy Research, 48 percent of respondents said that there were unwilling to pay any extra at all in gas taxes. The numbers dropped even more when those same respondents were told that their efforts were largely in vain. Duh. We've posted a video after the break from Fox News about this poll, as well as the NCPPR press release.

Ford CEO Alan Mullaly came out publicly in favor of new fuel taxes in place of fuel economy standards as a way to reduce fuel consumption. At the Management Briefing Seminar in Traverse City MI this week he called CAFE a failure that has done nothing to reduce American dependence on foreign oil or greenhouse gas emissions. Instead he said that Congress should give consideration to Rep. John Dingell's (D-MI) recent gas tax proposal.

While Mullaly is correct in arguing that oil imports have only increased since CAFE went into effect, there is also the fact that the standard has not risen since it reached its current level in late 1980s. However, the reality is also that consumers in this country will also tend to buy the biggest, most powerful vehicle they can afford to operate. Why else would F-150s and Explorers outsell by such a wide margin small cars that are and have been available.

Sales of larger, thirstier vehicles have only slackened as gas prices have risen but not nearly enough. Only when the cowardly politicians actually step up to the plate do what needs to be done to address demand for oil with tax changes will the problem really be addressed.

[Source: Detroit News]

If you've ever driven on Michigan roads you know that they are just about the worst in the United States. Crossing the Ambassador Bridge from Detroit to Windsor is like night and day when comparing the condition of the pavement. Unfortunately, the Michigan economy has been hit so hard by job losses and negative real income growth in the past few years that, when combined with tax cuts, the state has been unable to fund improvements. A new campaign called Drive MI spearheaded by local and county officials is working to build support for an increase in state gas taxes. Currently, the state gas tax is 19 cents a gallon and hasn't increased since 1997, in spite of increases in the cost of road construction, due to rising oil prices and general inflation.

Drive MI is taking a grassroots approach to building support for gradual increase from 19 to 28 cents a gallon over three years. Gas taxes in Michigan are significantly lower than surrounding states. Increasing the gas tax would also have a side benefit, in that it would encourage the use of more fuel efficient vehicles.

[Source: Ann Arbor News]