Chat with us, powered by LiveChat A Gas Tax - STUDENT SOLUTION USA

The Idea:
Revenues from federal taxes on motor fuels are credited to the Highway Trust Fund, which finances highway construction and maintenance. Those federal taxes, set in 1993, are currently 18.4 cents on each gallon of gasoline purchased and 24.4 cents on each gallon of diesel fuel.With state and local excise taxes included, total average tax rates nationwide are 40 cents per gallon for gasoline and 46.5 cents per gallon for diesel fuel. If the fuel taxes had been indexed to inflation, they would be around 15 cents higher than they are now. In addition to not having kept pace with inflation, fuel taxes have been lower than Highway spending every year since 2000.  This proposal suggests raising the fuel tax.

Instructions:
Please consider the following proposal for changing taxes. Please provide an analysis of this proposal. First explain what you consider to be the  advantages and disadvantages  of enacting this measure.  What are some reasons why it would be a good idea to enact this?  Are there any drawbacks or reasons why you would not want to enact this? 
At the end of the discussion, you will be asked for your final vote on this proposal. You will vote “yes” to enact it, and “no” if you do not wish to enact it and WHY?

Proposal:
              Increase the gas tax by 35 cents and index it to inflation.
Increase the gas tax by 35 cents and index it to inflation.  This option would raise federal taxes by 35 cents per gallon (to total 53.4 cents for gasoline) and then index them to inflation. Supporters say this increase would help deal with huge infrastructure needs, which would increase economic growth. Opponents believe an increase in the gas tax would harm economic growth and there are better ways to address congestion, such as tolls and congestion fees. Effect on deficit: -$515 billion.
Supporters Say:
The Highway Trust Fund is in deficit and the government is running out of money to maintain and repair roads, let alone build new ones. This increase would help deal with huge infrastructure needs, which would increase economic growth.
Higher taxes on motor fuels would have environmental benefits as well.  Fuel efficiency would increase, people would drive less and carbon dioxide emissions would be reduced.
Opponents Say:
An increase in the gas tax would harm economic growth and there are better ways to address congestion, such as tolls and congestion fees.
Higher fuel prices mean higher prices for transported goods.  This would impose a disproportionate cost on rural households,  while the benefits from the additional government revenue would mainly be felt in urban areas.
What do you say? Should the US enact a federal gas tax? Why or why not?

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