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Higher CAFE Standard Could Cost Government $57 Billion

Congressional Budget Office says collections from gas taxes would plunge.

By Exhaust Notes May 3, 2012 7:33AM
The Obama administration's proposed increase of the corporate average fuel-economy (CAFE) standard to 54.5 mpg by 2025 could save consumers up to $515 billion in fuel costs, according to reports by the National Highway Traffic Safety Administration and the Environmental Protection Agency. Those savings, however, would come at a price to the federal government: The Congressional Budget Office says the proposed fuel-economy increase could mean a loss of $57 billion over 11 years in gasoline tax collections, Automotive News has reported.

In a report released yesterday, the CBO said the 54.5 mpg CAFE standard would reduce the Highway Trust Fund's available money by 13 percent from 2012 to 2022. The fund is used to finance projects for U.S. highways and transit systems.

Quoting conclusions outlined in the CBO's report, Automotive News reported that "lawmakers could deal with the shortfall by spending less on highways and mass transit, using more general fund money from the U.S. Treasury for surface transportation, or raising the U.S. gasoline tax of 18.4 cents per gallon."
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8Comments
VerumEternus
May 4, 2012 2:57AM
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To help those in at lower income, the standard deduction for income taxes should be raised.  Of course, it should not be raised to a point that would counteract the additional revenue of the gas tax hike.

Why?  That takes away the incentive you implied would encourage people into more efficient cars.  Don't you think lower income people should have that incentive too?  In fact, the LAST thing we need to do is raise the standard deduction for income taxes.  As it is 47% of people DON'T PAY INCOME TAXES, and still get a refund on top of that, and therefore have no skin in the game to reign in the out of control waste and spending demonstrated by the federal and virtually all state governments. 

Rick from IL
May 3, 2012 11:15PM
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Raising the gas tax is a great way to go.  This will increase the speed of fuel efficient cars purchased, reduce pollution and reduce our trade deficit (as a result of less imported oil).  To help those in at lower income, the standard deduction for income taxes should be raised.  Of course, it should not be raised to a point that would counteract the additional revenue of the gas tax hike. 
The Beltway
May 3, 2012 12:53PM
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Transportation czar Ray LaHood has been talking about changing to a tax per mile scheme for several years now, and it is my understanding that it is already being considered by the congress.

I don't know that they're talking about changing to a tax per mile scheme as much as they're thinking about ADDING a tax per mile scheme on top of the existing gas tax.  With our $16 trillion in debt and growing, I'm betting that's going to be the path they take.  Unless of course we stop them.  We CAN stop them if we have the will.  Remember in November!

RabidDIYer
May 3, 2012 12:41PM
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Transportation czar Ray LaHood has been talking about changing to a tax per mile scheme for several years now, and it is my understanding that it is already being considered by the congress.

 

While one might save costs in the number of gallons of fuel being purchased, did anyone really think they could get a reduction in taxes by driving a more fuel efficient/alternativ​e fuel vehicle?  If so, they forgot one of the two SURE things in life.

insert random name
May 3, 2012 10:28AM
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I think it is much more likely that they will base the tax off miles driven and drop the gas tax altogether rather then just raise the gas tax. 

 

Regardless, they will get their money.

Real Rider
May 3, 2012 9:50AM
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Yep.  They'll just raise the gas tax.  There has also been some talk for several years about a fuel tax based on miles driven, not gallons consumed.  So driving 300 miles you'd pay the same fuel tax whether you get 20 mpg or 55 mpg. 

 

DTOM Gadsden
May 3, 2012 8:11AM
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Not for long, they'll just raise the gas tax to keep our money flowing into corrupt, irresponsible pockets.
kerns6
May 3, 2012 7:55AM
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To quote one of the 'Simpsons' charachters...  HA-HA!!! 
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