“Governor Rick Snyder plans to propose dropping the tax Michigan charges on each gallon of gasoline and diesel fuel in favor of a tax on the wholesale price of fuel, Snyder senior adviser Bill Rustem told the Associated Press on Tuesday.
“The wholesale tax of 6 cents or 7 cents per gallon initially wouldn’t cost drivers any more than existing taxes, Rustem said. But as inflation pushes up the price of fuel, the state could gain more money to fix roads and bridges.”
That’s not disconcerting at all. Some GOP lawmakers are concerned this could cause a tax on top of a tax, if the sales tax
on gasoline isn’t removed along with the legislation. And since most GOP lawmakers have pledged to not raise taxes, just passing the plan could be difficult. Whether the bill is passed or not, it might not be the answer Michigan is looking for or needs.
One issue is the tax won’t necessarily be consistent, because it will be based on the wholesale cost of gas, rather then simply tax revenue from each gallon, which while inconsistent, being based on the amount of gas purchased, that’s probably more stable then the wholesale price of a frigging tradable commodity we use for fuel.
The article also mentions “Rustem said the limits would be put in place so that sudden spikes or drops in fuel prices wouldn’t drastically change pump prices.”
That isn’t very reassuring, either. It’s great the state government is looking for ways to help Michigan grow and rebuild, but is messing with gasoline taxes the way to do it? Aren’t there other ways to try to help the state? Maybe not, and if having to change the tax system is what it takes to help Michigan rebuild, I’m fine with it as long as it’s done competently, thoughtfully and carefully.
The problem here is the plan seems a bit too vague so far. Fixing our infrastructure is a serious issue, and the article mentions that, but at the same time this new tax might not be the solution, especially with increased use of hybrid and electric vehicles. It’s not assured if the revenue is supposed to come from inflation.
We need to move away from gasoline, not tie ourselves to it as a form of revenue. Sooner or later alternative energy will replace gasoline, if for no other reason than we ran out of gasoline. So taxes based on its use don’t make a lot of sense to me. Yes, it is a long-term concern, but it looks like the time for thinking long term has come.
I don’t have a different answer to solving our infrastructure problem, besides using better materials, and those cost money. I don’t have an answer for getting the money, either. Sooner or later Michigan’s lawmakers might have to pass new taxes or alter the existing tax system.
Taxing gasoline’s wholesale price doesn’t strike me as a good long-term solution, especially if, as the article mentions, said revenue is based on inflation. Using inflation and taxing the wholesale price of a commodity to rebuild Michigan? Neither of those is a good basis for supporting the rebuilding of Michigan or this nation, in the long or the short term.
