Gas Taxation Without Representation

Gas taxes are going up, whether voters like it or not.

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Effective in July, eight states increased their gasoline tax rates. 11 others are said to be considering similar action, according to Transportation for America, a Washington D.C.-based public advocacy group.

According to another organization, the Institute on Taxation and Economic Policy, 16 states now have taxes that are automatically set to rise in conjunction with either an increase in wholesale gasoline prices or the general inflation rate. 

ITEP spokesman Carl Davis says such increases are long overdue because those states, like many others, are wrestling with rising costs to maintain transportation infrastructure while the federal gas tax (18.4 cents per gallon) that was dedicated to those expenses has not changed in 20 years.

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While few folks would argue with the notion that states need to produce the revenue needed to repair or rebuild highways and bridges, one might be concerned by the manner with which some tax increases were ultimately determined. For the sake of brevity, let's take a look at Wyoming and California.

In Wyoming, voters received a 10 cent increase in the gas tax, erasing a price advantage it maintained against six bordering states whose gas taxes ranged from 8 to 10 cents higher. As a result, Wyoming families can expect to pay an additional $114 per year for fuel on average, according to state estimates.

Sen. Charles Scott, R-Casper, who opposed the bill, said the legislation had been heavily lobbied for by "commercial interests," specifically, a coalition of 18 organizations led by the Wyoming Taxpayers Association, including the mineral, trucking, tourism and ranching industries, as well as the Wyoming Association of Municipalities and the Wyoming Association of County Commissioners.

[See a collection of political cartoons on gas prices.]

Scott said his constituents opposed the tax two-to-one on grounds they cannot afford to pay more taxes in the current economy. They also felt they were absorbing costs that should be rightfully paid by the trucking industry.

In California, the highest-taxed state bumped its fuel tax up 3.5 cents to 72 cents per gallon. Ron White from the Los Angeles Times reported that the excise tax increase was approved by five people. He wrote: "The five-member California Board of Equalization is an elected body whose members serve four-year terms. They are rarely in the news. The board voted 3 to 2 for the excise tax rise. Gasoline distributors or gas station operators could choose to pass all of the increase on to consumers, or just some of it."

Are we incurring too much taxation without adequate representation?  If we are, hasn't history shown us where that might lead us?  

Gregg Laskoski is a senior petroleum analyst with GasBuddy.com.

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