S.20.3-1: Regional Fuel Tax Act(Law'd)

[tmthforu94]

Regional Fuel Tax Act

1. The Southern Region shall tax gasoline at 30 cents per gallon and shall be indexed with inflation.

2. This act shall take effect September 1, 2020.

Sponsor: Tmth

48 hours minimum for debate.

[tmthforu94]

This was a promise made on the campaign trail - currently gas is taxed as an excise, which is 20% in the South. Gas tax is traditionally done by $$$, not %%%. While we need debate on a number, the current gas tax is quite high and also would be difficult for gas companies to manage as it would vary based on the cost per barrel, as opposed to a flat rate. So we definitely need to change it to a $$$ amount.

I proposed a $.20 as it is on the lower end of what the average is currently in Southern states. For reference, here is a map that shows gas taxes in each state: https://taxfoundation.org/state-gas-tax-rates-2019/

[Holy Unifying Centrist]

Lowering the gas tax to $0.2 will threaten our budget stability. We're already planning on running deep deficits as it is, so I do not think we can afford to lower the gas tax so drastically from 20% (which usually averages around a $0.4-$0.5 tax in the South). I think the gas tax should be $0.5 to help offset the budget issues

[thumb21]

The change from percentage to a certain amout per gallon seems to make sense but I'm not sure that cutting gas taxes is a priority right now. As DTC pointed out, we are already heading into tight situation with the budget.

[tmthforu94]

Selective sales taxes such as the taxes levied on gasoline, alcohol, and tobacco raise important equity issues. In general, people with lower incomes tend to spend a greater share of their income on these products, even when consuming the same amount or less than a high-income person. For example, if a low- and a high-income person each purchase 12 gallons of gasoline, the taxes on this purchase will consume a larger portion of the low-income person’s earnings than that of the high-income person. Taxes on these items therefore are “regressive” in their effect.26

Source: MassBudget

Gasoline is a regressive tax and I argue that it most affects middle and low income workers in rural areas of the region who have to make long commutes to get to work in a larger city. It amazes me to hear the stories - one of my friends whose family lives in rural Kentucky said it is common for many people to drive an hour+ each way to commute to work. These are the type of people who are most likely to need our help during this COVID-19.

Now interesting note - as I was looking through past budgets, I'm nearly certain we have been calculating excise taxes incorrectly. The recently passed budget says we are brining in $3.76 Billion per year in Excise taxes, a figure we have been using each year since 2016. Crazy low. To give perspective, the US federal fuel tax alone (18-24%) brought in $37.4 billion. Fremont's budget for this year has $30B+ in excise taxes, including $14B for the fuel tax ($.30/gallon). As Blairite is soon to be confirmed as CG, I am sending him a PM now asking for a cost estimate on how much the South should be brining in for excise taxes. I expect a much higher number than what is currently in the budget, and with those added funds, hopefully it can persuade my fellow delegates that this is a necessary and affordable step.

If anyone does have an amendment for a higher amount, they're welcome to introduce it and we can vote on it.

[reagente]

I support this legislation.

I hope the South abolishes eventually abolishes all regressive taxation, but until that point, I'll have to content myself with this incremental change bounded by budgetary realities.

[Dr. MB]

I support this and I'll sign it if it's passed. Not a fan of increased tax burden on the poor - especially people who have long commutes to work.

[thumb21]

In an ideal world, I don't think anyone earning bellow $30,000 should be paying anything in taxes. My initial scepticism was more practical. If we were to cut fuel taxes and then next year when the budget is up again, we cut spending, then what has happened is we've simply redistributed from one group of mostly working class people to another group of mostly working class people, in which case we aren't getting rid of a regressive burden, we are simply moving it to other people.

That said, if we are undercounting revenue from gas taxes and so we can cut gas taxes while still getting more revenue than we were expecting, I'll support the bill.

[Holy Unifying Centrist]

I am offering an amendment:

Regional Fuel Tax

1. The Southern Region shall tax gasoline at 20 40 cents per gallon and shall be indexed with inflation.

2. This act shall take effect September 1, 2020.

I will vote "No" to this bill if the fuel tax is any lower than 40 cents a dollar. A 20% tax on gasoline is equivalent to $0.4 to $0.5 in most states in the South. I do not want to lower gas taxes at all because they raise money for our infrastructure projects.

[Senator-elect Spark]

The change from percentage to a certain amout per gallon seems to make sense but I'm not sure that cutting gas taxes is a priority right now. As DTC pointed out, we are already heading into tight situation with the budget.

I agree with this sentiment. However, I support a modest increase of the gasoline tax to about $0.30. The tax can be reduced in future fiscal years. 

[tmthforu94]

I object to DTCs amendment with the arguments made in my original post - we are basing our gas tax on an incorrect formula that resulted in a high increase from the RL numbers, I do believe it wasn't the intent of the initial Chamber to do so. A $.40 gas tax is far above what most Southerners would pay in RL and in a time of economic crisis, lowering the gas tax back to reality will help middle and low income families, especially in our rural areas.

Regional Fuel Tax

1. The Southern Region shall tax gasoline at 20 40 cents per gallon and shall be indexed with inflation.

2. This act shall take effect September 1, 2020.

The above amendment has been called to question. Delegates have 72 hours to vote on whether to adopt the above amendment.

[tmthforu94]

Nay

[Senator-elect Spark]

Voting nay on the amendment. It's best to stick with a reasonable amount of $0.30.

[Holy Unifying Centrist]

Aye

[President Punxsutawney Phil]

Nay

[reagente]

Nay

[tmthforu94]

The amendment has enough votes to fail, delegates have 24 hours to change their votes.

[thumb21]

Abstain.

I agree with Spark that we should go to .3 which would bring us in line with Fremont.

[Deep Dixieland Senator, Muad'dib (OSR MSR)]

Abstain.

I agree with Spark that we should go to .3 which would bring us in line with Fremont.

Following Fremont isn't something to boast about.

[thumb21]

Abstain.

I agree with Spark that we should go to .3 which would bring us in line with Fremont.

Following Fremont isn't something to boast about.

1. I'm really not interested in engaging with this South vs Fremont nonsense, a true patriot loves all regions of the country.
2. The reason I brought up Fremont's tax rate was because Tmth made a good point that the South's tax right now is significantly higher than other regions, so one of the aims of this bill is to "follow" Fremont and Lincoln in having a lower gas tax.

[tmthforu94]

The DTC amendment has failed. Debate resumes.

[Senator-elect Spark]

Regional Fuel Tax

1. The Southern Region shall tax gasoline at 30 cents per gallon and shall be indexed with inflation.

2. This act shall take effect September 1, 2020.

Sponsor: Tmth

Speaker Tmth, I am introducing this amendment to this bill in our honorable Chamber.

[tmthforu94]

24 hours for objections.

[thumb21]

I support this amendment.

[Senator-elect Spark]

I second.