Gas Tax Hike? No! Well, Maybe

Poll shows Americans cautiously open to increase

Published in CSP Daily News

NEW YORK -- Americans are overwhelmingly opposed to a higher federal gasoline tax, but a significant number would go along with an increase if it reduced global warming or made the United States less dependent on foreign oil, according to the latest New York Times/CBS News poll.

The nationwide telephone poll suggested that a gasoline tax increase that brought measurable results would be acceptable to a majority of Americans, said the report.

Neither the Bush administration nor Democratic Party leaders make that distinction. Both [image-nocss] are opposed to increasing the gasoline tax as a means of discouraging consumption, although President Bush, in recent speeches, has called for the development of alternative energy to reduce dependence on foreign oil.

Some 85% of the 1,018 adults polled opposed an increase in the federal gasoline tax, suggesting that politicians have good reason to steer away from so unpopular a measure. But 55% said they would support an increase in the tax, which has been 18.4 cents a gallon since 1993, if it did in fact reduce dependence on foreign oil; 59% were in favor if the result was less gasoline consumption and less global warming.

Some people were concerned that a higher gasoline tax would find its way into what they considered the wrong hands unless it were directed to a specific use, just as the current 18.4-cent tax is channeled into highway maintenance and construction, said the report.

Some 24% of those polled said they would support a higher federal gasoline tax if the new revenue was used to help fight terrorism, and 28% would go along with a gasoline tax increase if, as an offset, their income taxes or payroll taxes were lowered.

Many mainstream economists believe that a shift that raises the gasoline tax while lowering income-based taxes is the most efficient way to reduce consumption, the report said. It might require a $1-a-gallon increase in the tax phased in over five years, Severin Borenstein, director of an energy institute at the University of California, Berkeley, told the newspaper.

Because increasing the gasoline tax is regressive, falling hardest on those who can least afford it, Borenstein would offset the bite by lowering income taxes in a way that would make most middle and lower income people better off. But they would end up driving less because of the rising cost of gasoline, some economists believe. By Borenstein's calculation, a 10% increase in the price of gasoline reduces consumption by 6% to 8% over the long run.

A falling gasoline price would undermine the pressure on people to buy fuel-efficient cars and move closer to their work, reducing their commute, the Times said. The problem is that the transition would be painful, even punitive, Ashok Gupta, an economist at the Natural Resources Defense Council, an environmental advocacy group, told the paper. To speed things, he would funnel some of the additional tax revenue to manufacturers as an incentive to offer more efficient vehicles, like hybrid cars.