Gov. Scott Walker said Monday he is considering replacing the state's gasoline tax with a sales tax on gas and alternative vehicle fuel sources to stabilize long-term transportation funding in the state.At first glance, I find myself confused. The gas tax is based on how many gallons of gas you buy, but a sales tax would (I guess) be based on the PRICE of the gas. Illinois, Indiana and Michigan already charge a sales tax on gas, among other states, and there's no real difference in what consumers see when they go to the pump (it's internalized into the price). And I don't see how that translates into more money for the state's deficit-ridden Transportation Fund. Here's an example of the difference, using a 10% sales tax on gas, and why it wouldn't be that much of a difference.
Walker offered few specifics, and the impact on consumers of charging a sales tax at the pump -- rather than the existing tax on gasoline suppliers that gets built into the pump price -- was unclear.
In an interview with the State Journal editorial board, Walker said "getting rid of the gas tax entirely" and replacing it with a sales tax is "a realistic thing for us to look at."
"Not as a revenue upper, but as a neutral conversion," Walker said. "With the idea being that that could be stable, versus something that's based on gallons of gas, which continues to go down."
10 gallons of gas at $0.31 tax = $3.10 total tax
Gas sales tax
10% sales tax at $2.71 wholesale = 27.1 cents a gallon
10 gallons at $0.271 a gallon = $2.71 total tax
A sales tax is still mostly based on buying the product, so I don't see where this does anything for shoring up a Transportation Fund deficit that could well be over $1 billion in the next budget. In fact, with gas prices going down and possibly staying there for a while, the move to a sales tax would become more likely to have LESS revenue (since lower price = lower tax). Unless there's some kind of flat amount of tax that everyone would pay, but how would that be figured? On a related note, Walker has generally opposed a Vehicle Miles Traveled system, and a "gas sales tax" doesn't sound like that anyway.
Which tells me at first glance that this is a lame attempt to deflect from bad headlines for Walker in the last week, and an attempt to get the Burke campaign off their game. And a former Mayor of Madison points out that it's an admission by the Walker Administration that they're largely out of one-time gimmicks when it comes to funding the state's transportation needs, mostly because of his stupid fiscal policies in the General Fund.
Walker opposes raising the gas tax and questioned the logistics of a mileage-based registration system. His first two budgets have relied on increased borrowing and general tax revenues to pay for road projects.But the complete lack of detail tells me that Walker's misdirection play should be ignored by the Dems as a serious proposal. But what they can do is ask questions and demand details that maybe smokes out what Walker REALLY wants to do. Because as Capper well puts it, "With Walker, there's more, there's always more."
But those options will be limited given the state faces a structural deficit heading into the next budget, said Dave Cieslewicz, a commission member and executive director of the Bicycle Federation of Wisconsin.
"His two escape hatches probably aren’t going to be there in the next budget," Cieslewicz said. "It would make sense he would be thinking about a different option."
Stay skeptical, my friends. There are no rabbits left in that hat.