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Fuel Follies

Tax Software Let's see. We're on the verge of war which is certain to put a crimp in oil production in Iraq, home of the world's second-largest reserves. Venezuela's oil workers have been on strike, so its exports are on "E." The Northeast U.S. is shivering through one of the coldest winters on record.

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Software Tax And now, just before the traditional pre-driving season increase, we're experiencing a precipitous spike in gas prices, pushing the average price to $1.68 a gallon. The forecast for the summer is for prices to level off around $1.70 a gallon for regular -- assuming the market isn't traumatized by conflict.

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Tax Help Well, yes. The House Transportation Committee is floating the idea of raising the federal gas tax by 5.4 cents, from 18.4 to 23.8 cents per gallon. (This would be on top of state gas taxes. Pennsylvania's tax is 26 cents a gallon, eighth highest in the nation; New Jersey's is 14.5 cents, the fourth lowest.)

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Help Tax Why 5.4 cents? That's the inflationary increase that would have occurred since the last federal tax hike in 1993, if gas taxes had followed market trends.

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Ernst Ernst Guide Guide Tax Here's a fact that Congress should keep in mind: Taxes are not market indicators. They are man-made constructs. To the extent that gas taxes support our interstate highway system and mass transit, they're market-enablers.

Tax Return To the extent that taxes exacerbate bad conditions and add another drag to the economy, they're market-wreckers. And that's the situation we find ourselves in at the moment.

Return Tax Still, the prospect of a deepening recession hasn't deterred Transportation Committee Chairman Don Young, R-Alaska, and member James Oberstar, D-Minn., who are seeking $50 billion for next year's highway/mass transit budget; President Bush proposed $36.5 billion. And yet they are probably right in saying the nation needs to spend more just to keep highways and bridges from getting worse, much less rebuilding them.

Guide Guide Master Master Tax This is a bed we have made for ourselves with conflicting policies. To keep the economy chugging, we subsidize road building and keep gas prices low, compared to the rest of the world. Then the Bush administration accedes to the auto and oil industries by allowing federal mileage standards to remain low, so as not to disturb the booming market for SUVs, minivans and pickups. And clean-air standards have been deferred too, adding to a price that we all pay in air quality.

Tax Preparation Meanwhile, our neglect in developing and maintaining mass transportation borders on criminal. The lack of passenger rail links in the Lehigh Valley to anywhere should be a front-burner priority, but in Harrisburg and Trenton, light-rail proposals tend to be written off as the daydreams of liberals, greenies and bicyclists. Transportation policy is notoriously voter-conscious, and right now the majority conscience wants to keep pushing on an accelerator attached to a V-8 turbo.

Preparation Tax That could all change with a major oil shock. The fate of a federal gas tax will no doubt rise or fall with the price of oil in the next year or two. Considering that federal transportation funding is a matter of paying a little more now to avoid paying a lot more in a few years, some hard choices have to be made.

Employer Tax Guide Still, raising the gas tax at a time of jumpy inflation is crazy -- unless, of course, you buy into the idea of making the price of gas so punitive that it forcibly reduces consumption. That punishes truckers, long-distance commuters, low-income people, and the economy overall. That's not what the House Transportation Committee has in mind -- but it would be the effect of a tax hike right now.

Tax Services The Express-Times - 3/10/2003

Topic: Transportation

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