Want a gas tax hike? Then eliminate the car tax

I was on WRVA in Richmond this morning with Jimmy Barrett talking about the proposals for a hike in the state’s gas tax and, as much as it pains my anti-tax soul, it does appear that all the stars are aligning for an increase of some sort.

This creates a problem, not only for those Republicans who have vowed before God and Grover that tax hikes are wrong, but for those Republicans seeking statewide office. On the one hand, the press will mau-mau them into backing a hike because our roads are crumbling to dust and failure to increase taxes now means plagues and poverty in the future. On the other, the ambitious Republican pol who supports a tax hike that will show up almost immediately at the pump then must explain to folks how it’s all for their own good. Once you start explaining, you start losing.

To prevent an epidemic of flop sweat and pulled muscles, I propose this:

In exchange for an increase in the gas tax, demand the full elimination of the car tax.

This keeps the focus on transportation — gas, cars and the fees and taxes attached to both — as opposed to Sen. Watkins’ income tax cut for some Virginians.

The state capped car tax relief when the economy soured. Governor McDonnell has said he would like the tax to go away, but has been waiting for the state’s economic climate to improve.

The economy has improved somewhat since he made that statement in 2010. And with Senate Republicans cracking on a gas tax increase, to the glee and delight of tax-philic Democrats, the right thing to do is offer them the deal: you get your gas tax, if the car tax finally dies.

The biggest winner under such a deal could be Bob McDonnell. He gets behind a deal that puts more money into roads, but kills a hated tax. Greater political legacies have been built on much smaller foundations.

The losers? State Democrats, who would, reflexively, argue that the car tax cannot be eliminated under any circumstances. They are left on the hook, then, for favoring a tax increase and the continuation of a tax no one likes.

In short, they would have to start explaining. And once they start explaining, they start losing.

  • The difficulty with this proposal is that the car tax and the gas tax go to completely different spending priorities – gas tax is earmarked for transportation, the car tax is earmarked for local government use. We need comprehensive transportation revenue reform, because just raising the gas tax is a short term fix to a long term problem. As cars become more fuel efficient, they will use less gas, and less gas sold means less revenue for transportation. It’s a long term losing plan. I want to see our statewide candidates pledge to address some kind of comprehensive tax reform in this area because it’s necessary.

    • I’m not sure if that’s true. If gas tax was a percentage, rather than flat cents, a lot of that problem would disappear. The more fuel efficient cars have gotten, the higher the cost per gallon has gotten.

      • I can see that, but the optics on effectively having a sales tax on gasoline in lieu of the flat rate gas tax as it currently exists might be hard for consumers to swallow.

  • Guest

    That would not be a net win for localities… that’s for sure. We lean on that car tax reimbursement. Gas taxes just go straight to the Commonwealth for transportation.

    The true net win would be substantial tax reform that makes everyone an equal co-investor in their government. Oh — and a per capita tax for education. That way, I don’t have to hear about 3 cent tax hikes on wealthy land owners and how everyone “can afford it” when the tax is equally distributed across the entire strata. Tired of mobs of people demanding more from others without paying their fair share…

  • How about this then? A gas tax increase with a portion directly to localities, the way the sales tax is split, and the tradeoff is ending the car tax?

  • I’ll put out clearly what others have inferred: the Gas Tax is state revenue, while the Car Tax is local revenue. Norm’s proposal would take money away from localities to give to the state. The Virginia Municipal League and every local government would be screaming.

    On the Car Tax, allow localities to levy a piggyback income tax in exchange for eliminating both the Car Tax and the BPOL. That would free up the Car Tax reimbursement money currently in the state budget, which (at least partially) should be dedicated to transportation.

  • Larsele

    Forget a gas tax!!! I’m a long way from accepting $3.50 a gallon gas as the “new Norma”.

    • Given growing demand from China and India on the international oil markets, little chance of a marked reduction in prices.

  • BAD idea to raise the gas tax. We’re already going nuts with the damn tolls. How are you going to explain tolls and a gas tax hike on top of that? For economic reasons, for businesses and standard of living reasons for individuals, you want cheaper energy and food. And let’s PROVE we can stop raiding the transportation fund before we think a tax will even help. And as mentioned already, the localities would need some help if you eliminated the car tax. We’ve been there before and Democrats launched a full scale marketing offensive against Gilmore. Gilmore’s own party did NOTHING to defend him. A Republican governor had better help localities or think twice about going there again.

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