Analyst: Gas tax could slow economy, harm families

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LANSING, Mich. — A gas analyst is warning Gov. Gretchen Whitmer’s proposed gas tax could have a significant impact on Michigan families and the economy.

Patrick DeHaan, head of petroleum analysis at GasBuddy, says the tax could impact the costs of goods being transported using fossil fuel and will force drivers to spend hundreds more every year to fill up their tanks.

Whitmer proposed raising the 26-cent gasoline and diesel gas taxes in 15-cent increments over the next 18 months. The proposal was met with heavy criticism from citizens and Republican lawmakers, but she says the tax is the best way to raise the money needed to fix Michigan’s roads, one of her campaign pledges.

“We did undertake a lot of debate and explored a lot of different possibilities, and this was the smartest, quickest way to remedy the problem in a way that helped us address these other issues that are vexing our state,” she said.

DeHaan says the proposal would be the largest single legislation increase in gas taxes ever seen in America.

“It’s going to cost several hundred dollars more a year for anyone with a car, and if you have two cars in your family, it could cost upwards of $550 more to fill up, so it’s certainly a lofty increase,” he said.

In her presentation Tuesday, Whitmer said there are plans in place to offset the extra cost for low-income families. She also unveiled a plan to increase the earned income tax credit, which applies to working families or people with low to moderate incomes.

DeHaan said the uptick at the pump could also be passed down to consumers through the price of goods, which could slow the state’s economy.

“You talk about the direct costs to motorists that are shelling out, at the end of it, 45 cents a gallon more, but the indirect cost on goods, the cost of goods going up (for) things like your grocery store items,” he said.

He said the size of the trucks will keep costs from rising too far, but there is likely to be a trickle-down effect.

“Municipalities, cities, police, fire units that are going to have to pay more for fuel as well, if they pay a retail price,” DeHaan said. “This is nothing short of one of the most significant increase in gas tax across the country I’ve ever seen.”

Rather than increasing the gas tax, DeHaan suggests implementing a toll road system. He says a toll system would “even the playing field,” charging people more for miles driven and weight rather than passing the price onto people with less fuel-efficient vehicles.

Whitmer said her plan is designed to prevent funding from being diverted from one purpose to another, and unless other revenue like the corporate tax is raised, this is the state’s best option.

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11 comments

  • Sick of the crap

    Ever wondered how groceries, restaurant supplies, and we’ll everything gets to the stores? Trucks. They run on diesel fuel. The price of EVERYTHING will go up! And tourism income will definitely go down. It always does when someone does this to the gas prices here.

  • Bud

    We just had the gas tax raised to give Michigan the 5th highest gas tax in America, along with hefty increase in vehicle registration in 2015. I’d like to see proof every cent of the current gas tax and vehicle registration fees have been going exclusively to Michigan roads before ANY increase is imposed. Democrats NEVER reduce taxes once they have been enacted – because if there is a surplus they have too many pet social projects they want to fund.

  • ADAM

    So I am self employed in construction and I drive around 30,000 miles a year with a 3/4 ton truck to do my work, how much of a tax am I getting along with every other self employed person who drives a lot? lets see here 30,000 at 12mpg at $2.30 a gal = $5750 now add .45 cents to that and it will be $6875 so I get taxed $1125 so roughly $100 a month, money that will be taken away from my 5 kids dinner table.

  • ADAM

    So I work in construction self employed and drive a 3/4 ton truck to do the work, 30,000 miles a year at 12 mpg at $2.30 a gal it costs me $5750 now add the tax and it will cost me $6875 a $1125 tax that is about $100 a month that is taken away from my 5 kids dinner table. well I guess I COULD GO GET FOOD STAMPS TO MAKE UP THE DIFFERENCE.

  • Bighorse

    Our last Democrat governor led us into single state recession in 2007 before the rest of the country caught up to us in late 2008-2009. Here we go again.

  • RG

    An increase in the earned income tax credit will not help working families. I think most people getting the tax credit stay home, don’t drive or don’t have cars. Another Democrat plan to take from the working people and give to those who don’t work.

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