Virginia governor proposes eliminating gas tax, other transport funding changes

[mc78andrew]

Tax plans increases need to be sold...hence why nothing gets done in congress.  At least he's trying to get something to actually pass. 

On another note, I have to think sales taxes are a lot more volatile in an economic downturn than gas taxes, so I'm not sure this is a great idea for consistent road funding.  That said, consumption is 70 percent of the economy so it strikes me as an opportune place to start if you are looking for tax revs.

It's interesting how states try to get wealth transfers from each other with tax policy...I view that competition as something that keeps taxes lower for us all, but it definitely creates a few market distortions and furthers the nonsense that somehow a growing state like Virginia can get away with funding a large portion of it's infrastructure plans by taxing drivers from the northeast cities or Canada on their way to the sunshine in FLA.  If they want to do that why don't they put toll barriers all around the border and have heavy discounts (80 percent) for those that use them say more than 10 times per month?  That would largely exempt most locals and commuters and nail those passing through.  Just some thoughts.

[1995hoo]

And it turns out Giant of Carlisle sponsors the Giant Center arena in Hershey–so cpzilliacus was correct that they're affiliated, he just cited the wrong corporate entity. But who can blame someone for confusion in this scenario?

[hbelkins]

Snyder's of Berlin vs. Snyder's of Hanover, anyone?

Or Hershey's ice cream vs. Hershey's chocolate, perhaps?

[cpzilliacus]

Tax plans increases need to be sold...hence why nothing gets done in congress.  At least he's trying to get something to actually pass.

That's correct.  And in Virginia, while many in the Republican Party in Richmond love to bash the federal government (a lot of it got started with ex-Sen. George Felix Allen in the 1990's), there is no state in the union that is more dependent on federal payments than Virginia.

On another note, I have to think sales taxes are a lot more volatile in an economic downturn than gas taxes, so I'm not sure this is a great idea for consistent road funding.  That said, consumption is 70 percent of the economy so it strikes me as an opportune place to start if you are looking for tax revs.

My personal  preference is for motor fuel taxes, combined when appropriate with tolling (especially for new capacity).  Motor fuel taxes are cheap to collect, as are electronic tolls (cash toll collection is much more expensive).

I am not especially enthused about using sales taxes to pay for transportation infrastructure for reasons such as the ones cited by you above.

It's interesting how states try to get wealth transfers from each other with tax policy...I view that competition as something that keeps taxes lower for us all, but it definitely creates a few market distortions and furthers the nonsense that somehow a growing state like Virginia can get away with funding a large portion of it's infrastructure plans by taxing drivers from the northeast cities or Canada on their way to the sunshine in FLA.  If they want to do that why don't they put toll barriers all around the border and have heavy discounts (80 percent) for those that use them say more than 10 times per month?  That would largely exempt most locals and commuters and nail those passing through.  Just some thoughts.

Agreed.  Though Virginia is small enough that it is possible for many drivers to cross all the way from Maryland to North Carolina without stopping for fuel on roads like I-95, I-81, U.S. 17, U.S. 301 and U.S. 522.  It is only about 180 miles on I-95 from Northampton County, North Carolina to Prince George's County, Maryland.  Even driving I-81 from Bristol, Tenn./Va. to Inwood, W.Va. is about 330 miles, a distance my pickup truck can easily handle without a fuel stop.

But trucks over 26,000 pounds have to pay "fuel tax" or "road use tax" based on miles driven in each state regardless of where they actually fill the tank (and it is interesting to note that McDonnell is not proposing to abolish Virginia's tax on Diesel fuel).