Boots & Sabers

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2001, 14 Oct 14

Walker Suggests Replacing Gas Tax with Gas Sales Tax

Interesting idea.

MADISON, WI (WTAQ) – Governor Scott Walker says he’s thinking about trashing Wisconsin’s gasoline tax, and replacing it with a sales tax instead.

Of course, Walker did not share any specifics. He is just floating the idea at the moment. What do you think?

Conceptually it is an interesting idea. One of the problems with transportation funding is that the gas tax is a flat per-gallon tax. As fuel mileage has increased and alternative forms if fuel become more readily available, the revenue from the gas tax has remained stagnant as transportation spending has increased. This leaves a gap.

Walker’s idea is to get rid of the gas tax as it is today and replace it with a sales tax on gas. This has the advantage of fluctuating with the price of gas and is less dependent on the gallons consumed. It also has the advantage of being a standard mechanism that can be applied easily to alternative fuels too – thus making it easier to make sure everyone using the transportation infrastructure is paying for it.

The down side is that in times of high gas prices, a sales tax will scale accordingly and be painful for consumers to pay. And, although Walker said that the new tax structure would not result in more money going to Madison, the only way to prevent that would for there to be a cap on the tax of some sort. That would be difficult, but not impossible, to manage.

It is an idea worth considering, but it does not solve the issue that transportation spending is just too high in Wisconsin. While I am all for considering better funding methodologies for transportation needs, we must first get the spending under control.



2001, 14 October 2014

1 Comment

  1. Kevin Scheunemann

    Not thrilled about taxes going up with market price on this one.

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