Reply #164: This tax would be extraordinarily regressive!

[ddeclue]

Consider that if a car owner gets 20 miles to the gallon on average and drives 10,000 miles a year you are raising their taxes by $500/yr. Many of us have to driver further and some people drive cars with worse mileage.

If you are making $20,000 a year (poverty level) that is a HUGE tax increase. Even if you make what I make, it's a big tax increase - one third of my usual refund every year.

Just because you artificially raise the price of a commodity through taxation does not mean that you will be able to suppress demand for vital goods and services.

The laws of "supply and demand" only work when demand is "elastic". Vital goods and services are by definition INELASTIC. All you do by raising their prices is steal money from some other unrelated sector of the economy - usually something like entertainment (movies, DVD sales, music sales, concerts, sporting events, etc.) eating out (notice all the restaurants that closed this year?) or people cope by putting off investing, getting an education, not buying health insurance, or by borrowing on their credit cards and hoping things get better soon.

Even when gas prices WERE above $4.00/gallon, demand really only fell a few percent and this was NOT because people were trading in their cars and trucks for more efficient vehicles. This happened far less than you suppose. Most people are NOT in a financial position to just trade their vehicles in on a whim or because of a price spike. Most people drive their cars into the ground until the wheels fall off.

I waited several years before trading my truck in on a more fuel efficient car and I make good money. Why? Because it was already PAID for and I needed the money for other things. This January I went out and traded the gas guzzler 4x4 in on a more efficient car, albeit a sports car - I doubled my mileage from 12 MPG to 24MPG - yet this improved mileage does not even BEGIN to cover the increased monthly cost of car payments. Had I known gas prices were coming down again, I would have stuck it out with the truck. (I also have another car that gets better gas mileage 30-32MPG but requires premium gas so it works out about the same as the new car).

Regular working people do NOT have any choice but to stick with the cars they've got unless you're going to give them a new free one which I doubt. Public transit is simply NOT an option for most Americans outside of: NYC, Boston, Chicago, San Francisco, Atlanta, Philadelphia and Washington D.C. EVEN in MOST of THESE cities not having a car STILL puts you at an economic disadvantage in finding and keeping a job. If you live in Huntsville Alabama or Nashville TN, or Savannah GA, or Orlando FL or any number of other towns especially in the South, the midwest or the far west public transit is either wholly inadequate consisting of buses only with no train system or non-existent.

We need CARROTS! not STICKS!

Doug D.