We need to treat gasoline more like milk.
When the price for a gallon of milk goes up, the amount of sales tax we pay on that milk likewise goes up.
The sales tax is based on the dollar size of a retail transaction, not the volume or weight of a product.
Thus the sales tax protects and fortifies state government's vital general revenue fund, which pays for schools and prisons and human services. It manages to keep a reliable sum of tax money flowing to the general treasury even if people despair of higher milk prices and opt for dryer cereal.
So we have a severe highway funding problem in the state, mainly because we tax gasoline on volume solely and price not at all.
The Highway Department's take from the per-gallon tax lessens as prices rise and people consume less, and as vehicles become more efficient. Meantime, the cost of highway construction and maintenance gets no cheaper.
I've long wondered: Why not keep the current simple per-gallon gasoline tax of 21.5 cents? Then why not tack on top of it a sales tax of some negotiable amount, a per-dollar levy, meaning one that would rise in what it generates as the price rises, thus adding the same elasticity and fortification to the special revenue fund for highways that buoys the general fund for general services?
As you pumped your gasoline, the numbers on the registry would fly faster. The multipliers would work harder, calculating government shares from both gallons and dollars. You'd pay more, of course, because you always do, and will, because there is no free highway, no matter what Republican state legislators try to tell you.
If the price went up and people drove less, the portion of the tax based on price would go up and protect the flow of highway money amid reduced consumption.
If the price went down and people drove more, the portion of the tax based on volume would go up and protect the flow of highway money amid lower tax receipts from lower prices.
What I describe is generally advocated by the nonpartisan Institute on Taxation and Economic Policy, which likes the idea of continuing to base highway money on highway use, which seems fair and appropriate.
This is generally known as a "variable gasoline tax." Eighteen of our more progressive states--Massachusetts, New York, California, Michigan, places like that--apply some form of it. Cumulatively, more Americans pay a variable state gasoline tax than a simple per-gallon tax.
Several states simply adjust their per-gallon tax rate periodically to a cost index, raising it as costs or prices rise. It is a sales tax by a different name.
It is true that gasoline taxes of any form are regressive. That's the case with any tax applied equally to the poor who are least able to pay and the rich who can pay without feeling a thing.
Poor people who must drive to low-paying jobs pay a disproportionate share of their meager income for essential gasoline and the taxes applied to it.
The only way to rectify that is to grant some kind of low-income tax rebate or credit or deduction for annual fuel costs. That might put us in the perilous position of robbing the general fund to pay for highways. But there is ample evidence that tax cuts for poor people get spent right away in taxable ways. Poor people don't have much luxury to save or invest or construct tax shelters.
I appropriately ignore the prevailing conservative cant that Koch-beholden and Koch-fearing Republican legislators spout, which is that we can find more money for highways in another "innovative" non-tax way.
I doubt we can throw enough poor people off health insurance or turn enough prisoners loose or sufficiently privatize schools to generate enough money to restore and maintain our crumbling highway system.
Anyway, there is recent evidence the people of Arkansas prefer higher sales taxes for highways.
They voted in 2012, amid the conservative revolution, to amend their own Constitution to put a 10-year sales tax on themselves for highways.
Meanwhile, Gov. Asa Hutchinson has put in place another working group to look into the highway funding problem. Signals are that the group will outline only options, not make firm recommendations, and address--initially, at least--only the easiest short-term solutions to the Highway Department's immediate need for at least a hundred million dollars to do necessary maintenance.
Republican legislators prefer anything to raising taxes. That means the general fund and its programs--for schools, prisons and human services--will be at risk.
But I'd point out that there is relative ease and convenience in applying the sales tax to gasoline.
Because of a quirk in the state Constitution, it can be done with a simple-majority legislative vote.
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John Brummett's column appears regularly in the Arkansas Democrat-Gazette. Email him at [email protected]. Read his blog at brummett.arkansasonline.com, or his @johnbrummett Twitter feed.
Editorial on 09/17/2015