Nov
30
Filed Under Taxes | Comments Off
Brendan Groff asked:
Amidst an era of futility concerning fossil fuel costs, both financial and ethical, the United States has called for a sales tax on the sale of gasoline. Currently the tax rate imposed on gasoline averages 47 cents a gallon, which is broken down to an average of 28.6 cents on the gallon for state taxes and 18.4 cents for federal taxation. As a result of this high tax on a basic purchase for millions of drivers nationwide, companies have raised gas prices to pass this taxation onto the consumers. This fuel tax is considered by many to be a “user fee,” or a fee that is paid by drivers to possess the privilege of driving an automobile. In a time of such financial disaster for the entire nation it is debatable whether this tax should be lowered or withdrawn to alleviate the American people in a time of such economic hardship. There are two sides to the coin however, as this tax helps fund the government in necessary ways. The exact solution is unknown, but a compromise of sorts could do wonders for both sides and at the worst could create a nationwide experiment showing if the gas tax benefits to consumers would outweigh the downfalls. Perhaps by temporarily lowering the tax and comparing it to the change in price of gasoline or the change in gallons purchased would be a wise measurement of whether the taxation is practical for America. Until a common ground is settled upon, millions will question the tax and if the benefits derived are worth the hassle. Mediation may be in order, but both sides must be properly assessed in order for proper compromise to occur.
At first glance most believe that a removal of a gas tax would instantly spark the economy and put more money in each driver’s pocket, which is the main reason of support to dispose of the tax. Families across the country are in economic danger and the less taxes people are forced to pay would mean more money for these people to distribute to other necessary expenses. Lower income families who depend on personal transportation to their jobs are put into further hardship with these higher gas prices, and a lower fuel tax could go a long way into helping these Americans maintain jobs and sources of income to support their families and themselves. Times are tough and the number of lower income families is bound to increase during this financial crisis, and any alleviation to these Americans should be imposed. While many consider these important aspects initially, beneath the surface are more logical reasons showing why this taxation is beneficial.
The taxation of gasoline goes towards many projects to directly help the transporters who pay the tax. The funds accumulated through this tax are typically budgeted to highway and road maintenance. In turn, this causes less wear and tear on the automobiles the transporters use, meaning less trips to the costly mechanic, fewer surprise flat tires that requires stressful roadside maintenance and a safer environment for the driver. The gas tax also encourages consumers to drive cars more affordable on gas, which creates a better ratio of environment-friendly cars to gas guzzlers. People are more inclined to purchase a hybrid car that can drive 40 miles on a single gallon of gas as opposed to the sports utility vehicle that gets 12 miles per gallon of gas and pollutes the planet. To further environment preservation, this tax encourages public transportation, carpooling, or alternative transportation methods such as walking or biking, which would result in a healthier America as a whole. Companies strategically set the prices based on supply and demand, prices of competitors, and mainly what will generate the highest profit. If the gas tax were to be retracted like many call for, the tax is actually retracted from the company who sets the prices, not the consumer. People theorize that a lower gas tax would create a trickle down effect which would save consumers’ money, but others theorize that a lower or retracted tax would just create a larger profit for the companies. This reasoning is based on the theory that companies would keep the prices where they are because people will buy the gas because they are expecting to pay the price anyway, and would pocket the profit for themselves without sharing the benefit with the consumer. By keeping this tax imposed, the mentioned benefits remain and the guessing game of how companies react cease.
While many grow frustrated about taxes for already expensive fuels, the benefits derived may be enough for Americans to realize that this taxation is necessary for energy innovation and environmental preservation. Since the economic break with the tax reduction or removal may not reach the consumer, it is wise to keep the tax. In fact an increase in the tax, with the intent to further fund research and development of new energy sources, may be the best long term solution. This strategy would likely result in cleaner fuels at a lower price, solving the problems of today’s fuels. The fuel tax is an investment for the future.
CYRUS
Amidst an era of futility concerning fossil fuel costs, both financial and ethical, the United States has called for a sales tax on the sale of gasoline. Currently the tax rate imposed on gasoline averages 47 cents a gallon, which is broken down to an average of 28.6 cents on the gallon for state taxes and 18.4 cents for federal taxation. As a result of this high tax on a basic purchase for millions of drivers nationwide, companies have raised gas prices to pass this taxation onto the consumers. This fuel tax is considered by many to be a “user fee,” or a fee that is paid by drivers to possess the privilege of driving an automobile. In a time of such financial disaster for the entire nation it is debatable whether this tax should be lowered or withdrawn to alleviate the American people in a time of such economic hardship. There are two sides to the coin however, as this tax helps fund the government in necessary ways. The exact solution is unknown, but a compromise of sorts could do wonders for both sides and at the worst could create a nationwide experiment showing if the gas tax benefits to consumers would outweigh the downfalls. Perhaps by temporarily lowering the tax and comparing it to the change in price of gasoline or the change in gallons purchased would be a wise measurement of whether the taxation is practical for America. Until a common ground is settled upon, millions will question the tax and if the benefits derived are worth the hassle. Mediation may be in order, but both sides must be properly assessed in order for proper compromise to occur.
At first glance most believe that a removal of a gas tax would instantly spark the economy and put more money in each driver’s pocket, which is the main reason of support to dispose of the tax. Families across the country are in economic danger and the less taxes people are forced to pay would mean more money for these people to distribute to other necessary expenses. Lower income families who depend on personal transportation to their jobs are put into further hardship with these higher gas prices, and a lower fuel tax could go a long way into helping these Americans maintain jobs and sources of income to support their families and themselves. Times are tough and the number of lower income families is bound to increase during this financial crisis, and any alleviation to these Americans should be imposed. While many consider these important aspects initially, beneath the surface are more logical reasons showing why this taxation is beneficial.
The taxation of gasoline goes towards many projects to directly help the transporters who pay the tax. The funds accumulated through this tax are typically budgeted to highway and road maintenance. In turn, this causes less wear and tear on the automobiles the transporters use, meaning less trips to the costly mechanic, fewer surprise flat tires that requires stressful roadside maintenance and a safer environment for the driver. The gas tax also encourages consumers to drive cars more affordable on gas, which creates a better ratio of environment-friendly cars to gas guzzlers. People are more inclined to purchase a hybrid car that can drive 40 miles on a single gallon of gas as opposed to the sports utility vehicle that gets 12 miles per gallon of gas and pollutes the planet. To further environment preservation, this tax encourages public transportation, carpooling, or alternative transportation methods such as walking or biking, which would result in a healthier America as a whole. Companies strategically set the prices based on supply and demand, prices of competitors, and mainly what will generate the highest profit. If the gas tax were to be retracted like many call for, the tax is actually retracted from the company who sets the prices, not the consumer. People theorize that a lower gas tax would create a trickle down effect which would save consumers’ money, but others theorize that a lower or retracted tax would just create a larger profit for the companies. This reasoning is based on the theory that companies would keep the prices where they are because people will buy the gas because they are expecting to pay the price anyway, and would pocket the profit for themselves without sharing the benefit with the consumer. By keeping this tax imposed, the mentioned benefits remain and the guessing game of how companies react cease.
While many grow frustrated about taxes for already expensive fuels, the benefits derived may be enough for Americans to realize that this taxation is necessary for energy innovation and environmental preservation. Since the economic break with the tax reduction or removal may not reach the consumer, it is wise to keep the tax. In fact an increase in the tax, with the intent to further fund research and development of new energy sources, may be the best long term solution. This strategy would likely result in cleaner fuels at a lower price, solving the problems of today’s fuels. The fuel tax is an investment for the future.
CYRUS