Hidden Costs

Over at Bitmap's Miscellaneous , he makes some very good observations about the new vehicle mileage and emissions standards announced today by President Obama. Not the least of which is the President's reference to the "fact" that the increase in vehicle costs will be offset by fuel savings, because consumers will need to buy less gas.

I heard the President say its a solution where "everybody wins".

Bitmap isn't buying into the premise, and neither am I. President Obama has proven himself very adept at pulling numbers out of his ass. Numbers that turn out to be way off the mark once he gets what he wants, policy-wise. There are a ton of facts that show this type of federal interference is a bad idea, most of which Bitmap points out quite readily.

Here's another wrinkle that the President isn't telling you about.

The foundation for funding Highway construction and maintenance in Texas is largely the tax on Gasoline sales. Here in Texas we pay a 20 cent per gallon tax on Gas. That amount has remained constant for almost 20 years. Similarly, other states have their own state taxes on fuel to fund highways, education, etc.

For example, in Texas in 2008, $3.1 billion in gas tax revenues were collected. This chunk of cash went mostly to highways (72%), with the balance going to education and administrative costs.

Why am I telling you this?

Because the Texas Transportation Commission is very concerned about a decrease in Gasoline Tax revenues that has occurred due to decreased driving - and the subsequent decreased use of gasoline - brought about by changing driving habits. People are driving less and using less gas. So far, gas tax revenues have been 3.2% lower this year than last year. That's about $100 million that is not going into the state coffers as tax revenues.

Now imagine what happens when the gas usage decreases even more, as Obama says it will, over the course of the next few years. That's less and less tax revenue because we're using less gas.

What do you think the response from the government will be to increased expenses (increased highway costs, inflation, etc.) combined with decreased revenues (decreased tax receipts)? They will need more money, and have less money coming in...

If you guessed that they will raise your taxes, then give yourself a gold star.

So, in the end, you will be driving a less safe automobile - using less gas - being a good little citizen of the world....

And you'll still be paying more for the privilege due to increased taxes.

How's that for hope and change?