Virginia’s Governor, Bob McDonnell has an interesting solution to his state’s revenue problem. He plans on dropping the gasoline tax and instead taxing internet shoppers and Prius owners.
McDonnell sees Priuses and other “alternative fuel” automobiles as a threat to the state’s coffers. The state gasoline tax has remained largely unchanged over the last several decades and even with rising gasoline prices, the tax revenue has remained flat, primarily due to more fuel efficient cars.
Gasoline powered cars are one of the largest threats to the environment. Most people would probably feel that lower gasoline consumption would be a good thing for everyone. Not McDonnell. His plan is to reward gas-guzzling drivers by eliminating the state gasoline tax for them and to punish fuel efficient drivers by taxing them.
On one hand, this move is far less regressive than many tax ideas, including gasoline taxes. With gasoline taxes and other sales taxes, poor and middle class people are hit much harder than wealthy people. Prius owners are typically well-off. They can afford the $100. Prius owners are also typically liberal and they are certainly the stereotypical liberal. A higher tax on more expensive cars could be a great idea, but McDonnell isn’t suggesting taxing giant pick-up trucks. He only wants to tax the cars that are associated with liberals.
Eliminating the gasoline tax isn’t even as progressive as it could be. Sure, people who are forced to drive 15 year old gas-guzzlers will benefit, but they’ll pay another way. McDonnell is proposing an internet sales tax. Again, a poor person will pay a larger portion of income for an Amazon.com transaction than would a wealthy person. Or, as Slate puts it:
McDonnell thinks it’s high time to shift the burden of paying for the state’s roads from people who buy gas to people who buy, well, everything else. His plan is to replace the gas tax with an increase in sales tax while also shifting money from other state programs. He’d leave in place a state tax on diesel fuel, which everyone knows is un-American anyway. And, perhaps as a scrap of red meat to conservatives inclined to fight the sales tax hike, he wants to throw in a $100 annual fee on drivers of hybrid and alternative-fuel vehicles. The only thing missing from McDonnell’s proposal is a special highway lane exclusively for single-driver SUVs.
What could McDonnell’s motivation possibly be? Who knows. The Governor is unquestionably in the pocket of the energy industry, but the vast majority of his energy contributions come from coal. Out of over $1 million in political contributions from energy companies last year, a paltry $1,500 came from big oil. Maybe he’s looking to change that. Or, maybe he’s just looking to please a constituency who wants to have great roads without paying for them, while getting a little jab in at the liberals in the state.