Cities are getting mighty creative in their efforts to fight rising deficits. No run of the mill income/wage/salary/vocation tax increases here. Philadelphia wants to raise its sales tax; Oakland is taxing marijuana and now DC is considering raising… its gas tax?
DC Council Member Tommy Wells (D) has suggested a gas tax hike of 3.5 cents. The tax on gas has not been raised in the District for nearly 20 years. Apparently, the justification for the tax hike is that gas is priced too low and this will bring it into line with the neighboring state of Maryland.
But, um, psst. Guys, over here: People buy gas in Maryland.
Not so much in DC.
Let’s face it. Nobody lives in DC. Okay, politicians do. But the latest guesstimates of the population put the district’s total population at just over a half million. The total population for the “metro area” (read: suburbs of Maryland and Virginia) is over five million. My guess is that those folks aren’t flocking to DC for cheap gas.
Those in favor of the gas tax say that it’s time (maybe) and that additional revenue is needed (clearly). They also say that this is a great way to change “bad energy habits.” According to the Washington Post, “Paying more at the pump will make a new car buyer think twice about buying a gas guzzler; it may induce more drivers to switch to bus or transit.”
Um, nope. Not this tax hike anyway.
I’m all for increased use of transit. I take the bus every chance that I get and I am proud of the fact that, annually, we drive our Subaru Forester far less than the national average. But our behavior is not based on taxes or the cost of gasoline (quite frankly, it has a lot more to do with my limited patience with idiot drivers on the Schuylkill, but that’s another story altogether).
Taxes, like this one, meant to induce a certain kind of behavior are really only effective if they’re significant. A 3.5 cent hike in the gas tax is not only statistically insignificant, it will clearly not induce masses of people to buy a different kind of car or to drive fewer miles. Assuming that the average driver logs 15,000 miles per year (that’s the federal average), a 3.5 cent gas tax hike would cost the driver of a 20 MPG car a whopping $26.25 for the year. People spend more than that at Starbucks in a week.
Other arguments for cleaner air and less congestion are (pardon the pun) pipe dreams. Look at those population numbers again. The District’s population sits at about a half-million but about a million people find themselves in DC during the week. Those people don’t live in DC. And chances are, those people aren’t buying gas in DC.
So, let’s call a spade a spade: an increase in the gas tax in DC is easy revenue. Nothing more. Next.
I tend to agree with you. Increasing taxes on individual consumption is a poor way to regulate behavior. I consider fuel consumption similar to cigarette and alcohol consumption. The demand for these products is inelastic with respect the “tax” part of their price.
I can confirm from personal observation, nobody buys fuel in the District. Not only because they live in the MD & VA burbs, but because it is already too expensive without an additional 3.5 cents (you are also hard pressed to even find a gas station anywhere near where people work).