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A further explanation of proposed tax pledges

June 12, 2011|By ART CALLAHAM

Last week, I wrote about taxes. A couple of my friends said they didn’t fully understand my list of tax pledges that would capture people’s attention. “Give us an example,” they said. So, here goes.

Let me recap what I believe elected officials should pledge:

1). Simplify the tax code. No exceptions. No loopholes.

2). All eligible taxpayers pay the taxes. No free rides. Equal to all.

3). Everyone who pays the tax receives a benefit from the tax and, further, the taxing authority must continually explain the benefit to taxpayers in terms of specific use and accountability.

I’m going to pick a tax as an example. I am not proposing the following as a new tax; I am only using this as an example that would be true to my proposed pledges.

For my example, I choose increasing the national fuel tax by 10 cents per gallon. Most folks I have talked to believe that our federal, state and local roads are deteriorating and might soon become unsafe.

Pledge One: Increase the current tax by 10 cents for every gallon of petroleum-based fuel dispensed. The revenue from this tax, to be collected by the federal government, would be used to build and maintain roads.  

Sorry for anyone who today gets a break on petroleum-based fuels; the increase is 10 cents a gallon if the fuel has petroleum in it (whole or part, so no exemptions for ethanol additives or any other additives). Simplicity.

Pledge Two: Every user (taxpayer) pays the tax, so no exemptions for governments or anyone else. Every 10 cents per gallon goes into a tax revenue fund for roads. Equality.

Pledge Three: This might be the easiest. On every “dispensing unit” for petroleum products, there would be an easy-to-read sticker that says “10 cents per gallon of the cost of this product goes to a fund that provides roads for this nation,” or something like that.

If you, as a voter and a taxpayer, ever get the notion that some government level is not spending that tax revenue on roads,  vote the person or people out of office. Specific use and accountability.

Now, what do you do with the revenue? The Feds collected it, so give them one-tenth of a cent per gallon dispensed to administer the program.

Here’s where it gets interesting. Any idea how much one-tenth of a cent per gallon of gas dispensed in America equals?

In Fiscal Year 2006, according to the federal government, Americans used 378 million gallons of gasoline per day. That equates to a yearly 138 billion gallons of gas used just for personal and commercial cars and trucks (this does not include fuel for airlines, the governments, farms, industry, etc).

A 10-cent per gallon tax on this fuel usage alone would equate to $13.8 billion in tax revenue; and with one-tenth of a cent allocated to administration, the federal government could set up an agency with a budget of approximately $140 million.

Now, take half of the remaining $13.6 billion and dedicate that to federal roads (the interstate system, for example). Again, for illustrative purposes, if interstate highways cost an average of $1 million per mile to build, then this nation could build a totally new interstate system every 6 1/2 years (there are approximately 46,000 miles of interstate highways in the U.S. today).

In this simplified model, give the other $6.8 billion to the states and local jurisdictions for use on state and local roads. I’m sure there is a simple formula that could fairly allocate those funds based on gas sales or road miles, for example.

This might be far too simple, but the premise remains: Taxes, fees, tolls, or whatever name we give the government’s revenue stream, is inevitable. Americans deserve to get what they pay for.

If we want good, safe roads, then there is a cost. In my example, that cost is a tax imposed on gas usage — a simple, equal, specific and known benefit for the tax.

Legislators have more important work to do than to make idle pledges about “no new taxes.” At all levels of government, legislators need to work on multipartisan efforts to ensure accountability and wise use of public money.


Art Callaham is a local community activist and president of the Washington County Free Library Board of Trustees.

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