Virginia governor Bob McDonnell is proposing getting rid of the state's gasoline tax in support of increasing the sales tax. That, he claims, is a more fair way of financing public transit, highways and other types of structure. Others are calling the strategy folly. Will you be in the market to buy or sell a used or new truck? If this could be you, get a quote at Gus Johnson dealer. Want to know find out more about Gus Johnson Ford? Find out more.
Getting rid of gasoline tax
Motorists will pay an extra $15 at registration every year with the new tax. It will also charge $100 a year for electric, hybrid and option fuel vehicles. There would be a 0.8 percent increase in sales tax from the current five percent. The basic idea would be getting rid of the 17.5 percent gasoline tax that is presently found in the state.
McDonnell also points out that the current state's gasoline tax has not been adjusted for inflation since 1986, making it increasingly less effective at keeping up roads. Increasing the gas tax does not appear to be an option for the Republican administrator.
The biggest issue is how people who do not use much gas will be helping pay for the roads.
McDonnell said, "If we stick to the same old means of funding transportation, we will find ourselves having the same debates and facing the same revenue shortfalls over and over again as inflation slowly eats away at the gas tax, cars get better mileage to meet CAFÉ standards and more alternative fuel vehicles hit the streets."
'Figures another issue'
McDonnell also claims the move would raise Virginia $3.1 billion over the next five years. However, the state also estimates its infrastructure needs at $1 billion yearly.
Fawn Johnson, a correspondent writing for, National Journal, said, "The math is suspect. The new taxes and fees barely add up to half of the estimated $1 billion per year needed for Virginia's infrastructure. How the rest of the money gets raised is a mystery, although McDonnell has a few ideas. Collecting out-of-state sales taxes? Streamlining the bureaucracy of VDOT? Hmmm. There is, indeed, a lot to poke fun at."
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Strategy not a win for all
This was surely a dumb idea, according to Will Oremus of Slate Magazine.
The plan makes it a requirement for those who do not drive to keep up the roads and freeways, according to the Wall Street Journal editorial, which makes it pretty ridiculous. Most of this would end up going towards merchandise that has nothing to do with transportation and put the responsibility on other people.
Drivers will drive more often if they are not paying directly for the road, according to the Tax Foundation, which will cause more problems.
It would not make sense to do this because it means EV and hybrid drivers will end up paying more for the roads than regular drivers. That is another major concern.
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Sources
Wall Street Journal
National Journal
Autoblog
21 Jan 2013, 9:20am