Climbing indexed gas tax

In light of the suggestion in the RAND Report for Vermont of increasing tax rates on legal marijuana, it’s heartening to see Congressman Earl Blumenauer’s gasoline tax bill — https://www.congress.gov/bill/114th-congress/house-bill/680/text — taxing by the gallon, with year-by-year rate increases.  The Reports suggests taxing marijuana by weight or potency — which is like volume (gallons) for gasoline.  Here are Mr. Blumenauer’s rates for gasoline other than aviation gasoline–

“(I) for tax imposed before 2016, 18.3 cents per gallon,

“(II) for tax imposed during 2016, 26.3 cents per gallon,

“(III) for tax imposed during 2017, 30.3 cents per gallon, and

“(IV) for tax imposed after 2017 and before 2028, 33.3 cents per gallon,”.

And there is indexing for inflation:

(c) Increase for Inflation.–Paragraph (2) of section 4081(a) of such Code is amended by adding at the end the following:

“(E) Adjustment for inflation.–In the case of any calendar year beginning after 2017, the rates of tax

contained in clauses (i)(IV) and (iii)(IV) of

subparagraph (A) shall each be increased by an amount

equal to–

“(i) such rate, multiplied by

“(ii) the cost of living adjustment

determined under section 1(f)(3) for the

calendar year, determined by substituting

`calendar year 2016′ for `calendar year 1992′

in subparagraph (B) thereof.

Any increase under the preceding sentence shall be

rounded to the nearest 0.1 cents.”.

 

I’m for all that.

 

North Carolina is still tinkering with a formula that includes percentage of price:  http://www.newsobserver.com/2015/02/09/4543730/senate-plan-would-cut-nc-gas-tax.html

 

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Author: patoglesby

From 1982 to 1990, I worked in tax policy for Committees of the United States Congress. In recent years, I was Adjunct Lecturer at UNC-Chapel Hill's Business School and then Adjunct Professor at its Law School.

1 thought on “Climbing indexed gas tax”

  1. A much needed brave increase in the gasoline tax. Congrats to Congressman Blumenauer. Grover Norquist must be up in arms.

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