California's high gas taxes

A reader on this blog's comment board asked for a chart on gas taxes. You asked, we give. See the chart below.

State and federal excise taxes add up to 37.8 cents per gallon in the Golden State, but additional state, county and local sales taxes bring the grand total to 63.9 cents of taxes per gallon in California. Spank me!

That's more than any other state. The U.S. average is 47 cents per gallon, according to the American Petroleum Institute, which has a nifty list online.

The state tax hasn't been raised in California since 1994 and the federal tax since 1993. So there's an ongoing debate in the world of transportation funding over whether taxes should be raised to keep pace with inflation or are already too high.

A lot of the gas tax money is supposed to be spent on infrastructure. But here's a sentence to chew on from the traffic series The Times is running this week:

"Roughly $5.8 billion in highway and mass-transit funds that were diverted during the state's repeated budget crises this decade have not yet been repaid."

More on this soon.

--Steve Hymon

chart: California Energy Commission

Comments

[KateNonymous]

"My point was stating that replacing the gas tax with a mileage tax would serve a better purpose in maintaining a viable transportation (which is roads and mass transit) system for the future."

And then you added the point that people who were not driving should pay the same taxes. Presto, flat tax.

That doesn't make it inherently a bad idea--sometimes that's the appropriate tax system--but it is what you're suggesting.

[Hallett Newman]

Why has no one mentioned here that the taxes on gas amount to about 2 to 3 times as much as the oil companys make in profit?? The oil company finds, extracts, refines, and delivers a product we all need. The government on the other had does absolutly NOTHING other then stick their collective hand out and says, "Give it to me".
Drill Here, Drill Now, Pay Less.

[Sue Donim]

rebel409: In theory, you are right. The gas tax should be self-defeating in so far as it encourages people to drive cars consume less fuel (i.e., use less gas), as well as to drive less.

In practice, however, the gas tax has been far too low to have a substantial effect on fuel consumption. Average fuel economy has not improved since the 1980s! Nor have the vehicle fleet (total number of registered vehicles) or vehicle miles traveled have decreased. Indeed, both have increased markedly since the 1980s.

Fuel consumption has only fallen in the last couple of years as gasoline has doubled in price--not due to a corresponding tax increase, I might add, but to the runup in crude oil prices. So, in essence, the gas tax itself is not endangering its own revenues; the price of oil is.

An odometer-based tax is an intriguing idea, but it has several serious shortcomings:
1. It provides no incentive for drivers to choose more fuel-efficient vehicles (and thus improve air quality, lessen the country's dependence on imported oil, etc.)
2. It would be easier to cheat. (Odometers can, and depending on the level of the tax, would certainly be tampered with.)
3. It would be expensive and fiscally inefficient. (Manufacturing and installing millions odometers would cost a fortune, as would periodic inspections to verify the functioning of said odometers.) As a result, a large portion of the revenues the tax generates would NOT go into improving transportation infrastructure but into funding the tax system itself.
4. It would be a jurisdictional nightmare. (For the system to be effective and prevent people from gaming the system by registering their vehicles in odometer-less jurisdictions, all 50 states, as well as all Canadian and Mexican provinces would have to join and enforce equally. The gas tax does not suffer from this problem--no matter where your vehicle is from, if you fill up in California, you pay California gas taxes.)

[Matt]

Strange how gasoline purchase receipts are one of the very few receipts consumers get that does not detail the base price and the taxes paid. Why are gasoline sales exempt from providing this detail? Every other bill, purchase reciept, invoice, utility, property tax statement, etc. I get seems to have this all broken down in detail, except gasoline. WHY?

[Matt]

The worst thing about gas tax as a public policy matter is that if we tax the price, there is no incentive to the state to see the price drop, and if we tax the gallons sold, there is no incentive for the state to encourage less usage. If the pulblic policy is truly to reduce driving and reduce air pollution, use the alread-in-place smog check infrastructure to tax the total miles driven and the total pollutants emitted. The infrastructure is here, no GPS transponder tracking system required, the data is already being transmitted electronically by the smog check station instantly to the state databases. I understand wholesale changes to tax collection systems are usually considered too risky to undertake, but this seems too easy - if the true public policy really is conservation and not consumption...

[rebel049]

KateNonymous, taxes on everyone already exist. Sales tax, income tax, useage fees, property tax, etc. I'm not sure what point you are trying to make. Could you please clarify. My point was stating that replacing the gas tax with a mileage tax would serve a better purpose in maintaining a viable transportation (which is roads and mass transit) system for the future. California Gas Taxes are already mandated by the state constitution to be spent on transportation unless a "Fiscal Emergency" is declared by the governor and a minimum number (dont recall the number off hand) of elected state legislators.

[KateNonymous]

"public transportation should charge at the same or lower (since more riders per vehicle) mileage tax rate as personal vehicles"

In that case, rebel049, why not take transportation out of the equation entirely? Just levy a flat tax on everyone.

My point was this: You said that increasing MPG reduces the taxes paid, since people buy fewer gallons. But driving fewer miles per year has the same net effect, in terms of payment. And some transit systems have zones and some do not. Some charge more during rush hour, and some do not.

[rebel049]

KateNonymous, if more people used public transportation then wouldn't the corollating collected fares rise as well, thus still capturing the funds. My point was not about individuals driving fewer miles per year but about more miles per gallon and therefore less gallons used per year. To hit on something else that I thought of, something related to your point, public transportation should charge at the same or lower (since more riders per vehicle) mileage tax rate as personal vehicles. Most rail transits due this in the form of diferent rates for "Zone" travel.

[Anthony Fernandez]

This is a chain reaction. The state spends too much money and doesn't get enough (that can be argued though), so they have to steal money from the gas tax. Then once that is taken, our roads fall into disrepair and we can't invest in our infrastructure. This will only drive the cost of that infrastructure up, so by not taxing ourselves now, we are only shooting ourselves in the foot for the future.

[Dan Wentzel]

18 cents a gallon doesn't go as far as it used to, especially with more fuel efficient cars on the roads. The gas taxed should be indexed to inflation.

[wannabetransitrider]

On NPR this morning they reported that on average, motorists in the EU pay 60% of their gallon of gas (well liter) in taxes. So for a $7 gal, they are paying about $4.20 in taxes. On the flipside, if you live in the major cities you have mass tranist or you buy a small car (ie smart car types) or move around on a scooter/ motorcycle. And to this day they are still adding subway lines, etc- so you are seeing where the money is going.

I agree with the previous poster- if there was a guarantee that those $ generated actually went to transportation or road programs, then I would be the first to vote "yes". But when monies are constantly "borrowed" or used to pay lawyers and consultants to defend the right to construct against NIMBYs or special interest groups that just want to delay, delay, delay- it is hard to not to want to start the LA Tea Party!

[KateNonymous]

rebel049, if more people use public transportation, won't the outcome be the same? They'll be driving fewer miles per year.

[rebel049]

The current tax system for trasnportation funding (gaslone tax) is broken. Taxes based upon gallons when the government (state and federal) is mandating more efficient vehicles (more miles per gallon) is the flaw. The whole gas tax system was flawed from the beginning as a source of funding for anything as it will continue to be diluted in value. The only to stop the hemaraging is to swtich to an odometer (annual miles driven) tax. Set the mileage tax to match current gas tax standard for the state (based upon statewide averages). If I did my math right it should be about $0.025 per mile. If the feds get onbaord it would be an additional $0.015 ($0.04 total). There are two solutions: have the DMV record your mileage once or year or have a GPS transponder placed in your car. I think both of these should be offered as the solution since so many are paranoid of "Big Brother" tracking their every move. This way, the people who aren't overwhelmed with paranoia can have a method that doesn't require standing in line and waisting a day at the DMV. Yes, I do realize that this will not capture out of state drivers money, but it will stop the devaluation of the source of our transportation funding. I welcome any contructive criticism and/or further suggestions. Rants will be ignored.

[KateNonymous]

Thanks, Steve. How does that compare to taxes in European countries, though?

I actually don't have a problem with taxes--as long as they are spent in ways that benefit the public. All too often, though, that's not the case.

[Matt]

So where's the rest of the story you refer to? And this chart, http://www.taxadmin.org/FTA/rate/motor_fl.html from the Federation of Tax Administrators, not the Petroleum industry lobbyists you cite above, without the state sales tax added in, tells a different story. Californians pay less state excise tax on gasoline than 35 other states. More story please.