Tuesday, September 20, 2011

A Gas Tax Idea in Here?

The chart above has appeared in a Congressional briefing and at intellectualtakeout.org to show the inverse relationship of the value of the dollar and the price of oil. 

Both conclude:  When the dollar goes up, the price of oil goes down and, as we are experiencing right now, when the value of the dollar goes down, the price of oil and the price we in the U.S. pay at the pump goes up.  In fact, the Congressional briefing attributes 56 cents of every gallon of gasoline to the value of the dollar being low.

Consumer willingness to pay gas taxes could also be viewed as being tied in.  When the price of gas at the pump is down, consumers are less reluctant to pay higher gas taxes.  However, when the price at the pump is up, the reluctance to pay is higher.

Frankly, our nation's highway tax rate is not keeping pace with the highway needs.  Congress is reluctant to pass a gas tax increase at all though.

Maybe we could figure out a way to index the size of the gas tax to the dollar.  When the value of the dollar is up, gas taxes would go up.  When the value of the dollar is down, the gas taxes would go down. 

The result would be less fluctuation in the price at the pump and a way to fuel the gas tax coffers a bit.

The biggest challenge would be to keep hands off of the funding when it goes up. 

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