Quote:
Originally Posted by markj
Pump the brakes. Did you just say or imply taxes should be adjusted for inflation?
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Almost all taxes ARE automatically adjusted for inflation. I know Delta hasn't received a raise since 1979, but most folks real incomes have grown with inflation over time. As incomes rise, so does tax liability / revenue. Same can be said for sales tax... as a boat or car or whatever costs more, so does the tax liability. You don't pay tax on a boat based on the kilos of fiberglass in the boat.
Fuel taxes are not inflation indexed like that. If the price of fuel (and corresponding cost of road maintenance that fuel taxes fund) goes up over time, the tax stays static (20 cents per gallon, for instance). Even worse, as evil dem regulations have an effect on making cars more fuel efficient, actual revenues (at least on a per mile driven basis) also decline -- you get more cars on the road for the same revenue. If your old car went 20 miles on a gallon and your new car goes 32, then you are putting 12 more miles of use on a road without paying taxes.
As noted above, federal fuel taxes are earmarked for road maintenance. Has the cost of that maintenance stayed flat since 1997? Probably not.
As we transition to electrics, fuel purchases as a proxy for resource consumption also breaks down. Under the old thinking, if you buy more gas, you are likely putting more wear and tear on the roads, so the fuel tax is at least somewhat proportionate to your impact on road wear.