MD Gov. Martin O'Malley's sales tax on gas is the right way to fund transport

[marmar]

O'Malley's sales tax on gas is the right way to fund transport
by Ben Ross • February 2, 2012 10:43 am


In his Wednesday state-of-the-state speech, Governor Martin O'Malley proposed ending the exemption of gasoline from Maryland's 6% sales tax. This is the best way for the state to get more money for transportation.

Ending the sales tax exemption, rather than increasing the gas tax beyond the current 23½¢ per gallon, accomplishes two things. First, sales tax revenue keeps pace with inflation. With the current structure of the gas tax, politically difficult tax increases are needed just to keep transit operations and road maintenance constant.

Second, we now have an opportunity to refute a widely believed myth about transportation funding. Once upon a time, drivers paid for roads through the gas tax. Most people think that's still true, but it's not.

Maryland's gas tax goes into the state's Transportation Trust Fund, along with the sales tax on car sales, fares paid on MARC trains and MTA buses, and revenues from BWI Marshall Airport and the Port of Baltimore. When the gas tax was last raised in 1992, the 23½¢ state tax was 33% of the pretax price of gasoline. The sales tax on other pur­chases was 5%. The heavy tax on gas could be described as a user fee paid by drivers. ..................(more)

The complete piece is at: http://greatergreaterwashington.org/post/13563/omalleys-sales-tax-on-gas-is-the-right-way-to-fund-transport/

[Thav]

1. There's a debate going on in Iowa about raising the gas tax as well

It's been unchanged since like 1992 or some noise. I'm mixed, while I'd like more funds to repair roads and bridges, I think an increase in cost on the lower/middle class would hurt consumer demand.

[GodlessBiker]

2. Gas taxes might be an obsolete way to guarantee funding for public infrastructure, particularly ...

as all electric models and hybrids become more popular on the road. States are already seeing their gas taxes decrease as the percentage of vehicles which get 50 mpg or use no gas at all rises.

[Fumesucker]

3. Rescinding the tax exemption has the added benefit of being regressive as all get out..

By which I mean the poor will pay a larger percentage of their income on this tax than the more well to do..

Always a plus in the USA.