Cheaper Gas Plan

[KGKat]

Another plus for the gas tax is that it and the bed tax are the only taxes levied against the visitors/tourists that come through our state, as well as all of the out of state and country trucks. I do not have the numbers but I am certain that a huge portion of the wear and tear on MT roads comes from these 2 segments that would otherwise get a free ride.

[SonomaCat]

Another plus for the gas tax is that it and the bed tax are the only taxes levied against the visitors/tourists that come through our state, as well as all of the out of state and country trucks. I do not have the numbers but I am certain that a huge portion of the wear and tear on MT roads comes from these 2 segments that would otherwise get a free ride.

That's a good point. It's the closest thing that MT has to a sales tax to take advantage of the tourist segment ... money that the state is otherwise leaving on the table in favor of high property and incomes taxes on its own residents.

[Grizlaw]

Another plus for the gas tax is that it and the bed tax are the only taxes levied against the visitors/tourists that come through our state, as well as all of the out of state and country trucks. I do not have the numbers but I am certain that a huge portion of the wear and tear on MT roads comes from these 2 segments that would otherwise get a free ride.

True, although I would argue that the economic burden of property taxes and corporate and individual income taxes on businesses are borne partly by nonresidents, even though the taxes are nominally "paid" strictly by residents. This is true because a business entity will treat any tax that it pays as a cost of producing its goods or services, and will pass those costs along to its customers to the extent possible. Thus, while tourists passing through the state do not directly "pay" property taxes or income tax in Montana, I would argue that they do bear part of the economic burden of those taxes when they buy goods or services in the state.

--GL

[SonomaCat]

I'm not really a believer in the concept that companies pass along their costs to the customers. A business will charge as much as it can for a product or service, regardless of its costs. If it pays more taxes rather than less, in general, that delta goes directly to the bottom line. They don't have the option of arbitrarily increasing prices to make up that margin as they can only charge what the market will bear.

All that being said, I think most of the property taxes in the state are probably paid by farmers and homeowners, two groups who absolutely have no opportunity to pass those costs on to the tourists who are paying nothing (like me this weekend, except the gas taxes).

[Grizlaw]

I'm not really a believer in the concept that companies pass along their costs to the customers. A business will charge as much as it can for a product or service, regardless of its costs. If it pays more taxes rather than less, in general, that delta goes directly to the bottom line. They don't have the option of arbitrarily increasing prices to make up that margin as they can only charge what the market will bear.

All that being said, I think most of the property taxes in the state are probably paid by farmers and homeowners, two groups who absolutely have no opportunity to pass those costs on to the tourists who are paying nothing (like me this weekend, except the gas taxes).

There is probably some truth to your first point, although I think what you say is more true with regard to some industries than others. In industries with a more inelastic demand curve, I would argue that businesses can and do increase prices in response to increases in their costs. However, I'll agree that the extent to which the phenomenon functions in the real world is debatable, if only because many businesses just don't think along those lines.

Re: property taxes in Montana, you are probably right.

--GL

P.S. Have fun in Montana this weekend. I will be in Michigan watching the Wolverines play Minnesota, where I will probably pay substantial amounts of sales tax, alcohol tax, and hopefully whatever other "sin taxes" Michigan has enacted.

[SenorWeezer]

Anyone complaining about the price of gasoline who has paid $2.00 or more for a cup of coffee (or a latte or whatever) OR has paid ANY amount of money for a bottle of water should recind their complaint about the price of a gallon of gas and pick up their sign!

If you mulitiply the cost of just these two products into a gallon equivelant, you are going to feel guilty only paying $3.00/gallon for gasoline. Don't even get me started on the number of oil company employees within our state alone (not even counting nationwide) that make good money and turn right around and spend it on groceries, sporting goods, vehicles, and everything else under the sun...in addition to the tax base their earnings AND the earnings of the oil companies provide for infrastructure and operations of our great country.

[SonomaCat]

Anyone complaining about the price of gasoline who has paid $2.00 or more for a cup of coffee (or a latte or whatever) OR has paid ANY amount of money for a bottle of water should recind their complaint about the price of a gallon of gas and pick up their sign!

If you mulitiply the cost of just these two products into a gallon equivelant, you are going to feel guilty only paying $3.00/gallon for gasoline. Don't even get me started on the number of oil company employees within our state alone (not even counting nationwide) that make good money and turn right around and spend it on groceries, sporting goods, vehicles, and everything else under the sun...in addition to the tax base their earnings AND the earnings of the oil companies provide for infrastructure and operations of our great country.

That might be a first ... the exact same post (perfectly in context) in two different threads at the same time! You must really mean it!

[catbooster]

I'm not a transportation engineer, so don't follow the funding issue too closely. But as I recall, a few years ago the feds were not spending all of the gas tax money (I think the federal gas tax was something like 5 cents a gallon - most of the gas tax is state). They were holding much of the gas tax collected in a trust fund so that the deficit didn't look as bad - similar to the way they use the SS trust fund to "reduce" the deficit. Therefore, a significant portion of hte fed gas tax was neither creating jobs nor fixing roads.

I also recall people in the industry being strongly opposed to removing the requirement that the gas tax go to transportation projects (i.e. going to the general fund) because once money moves to the general fund and is available for whatever Congress wants, not much of it will make it to road maintenance and improvement.

I have to agree that paying tax on gas is probably the most equitable way to fund transportation projects. I also think that in the case of Montana, it allows us to get a lot of help from out-of-staters (tourists and truckers) in paying that tax.

[Grizlaw]

Anyone complaining about the price of gasoline who has paid $2.00 or more for a cup of coffee (or a latte or whatever) OR has paid ANY amount of money for a bottle of water should recind their complaint about the price of a gallon of gas and pick up their sign!

I can't speak for everybody, but a lot of us aren't really complaining about the price of gas so much as simply making observations about the effect it may have on our economy if it continues for a sustained period of time (and thus, discussing alternatives for solving the problem).

Either way though, that's the great thing about free markets. It doesn't matter that you think the pumpkin spice latte that I'm sipping right now (which cost $5.04 here in Manhattan, btw ) is a rip-off. If it's worth $5.04 to me, I will pay it, and if I think oil prices are out of whack, I will feel free to talk about that as well. (Of course, since I don't have a car, I haven't felt the sting of high gas prices quite as directly as most, and thus don't feel quite as compelled to complain.)

--GL

[jagur1]

I like High Oil prices for 2 reasons

1: One my Dividend check is getting to be a nice suprise

2: Maybe Americans will stop driving 45 minutes to work. ( I put 1500 miles on my truck last year becouse I live around the corner from my work, day care, grocery store ect. ) People are waisting away the best years sitting in a car stressing about buying the American way. (wowy I must be a UM grad i sound like a hippy)