Life on the Road – Trucking News Blog

Highway infrastructure cost is a continuing problem. Now we’re facing the next big Transportation bill. We’ve been watching individual states bandy around the idea of raising fuel taxes and also watched these same legislators sneak around in the dark of night and move those earmarked tax dollars to someplace other than where they’re supposed to go. Then, they immediately start crying poverty and try for yet another tax to fill a pothole.

Every few years, we get another Transportation bill that’s supposed to solve all of our problems-temporarily. Every time, within months, everybody’s crying there isn’t enough money, or somebody got more than their share. Usually, they’re right-somebody DID get more than their share, and it usually isn’t to pay for roads. With the current big push to build out mass transit, I think we can be pretty sure that, no matter how much is earmarked for transportation, our roads wont get fixed and our bridges will still be falling down. In the current political climate, we’ll all be trying to move freight on high-speed rail because that’s the only thing that’ll get paid for. That is, if they can even get a bill passed in these tough times. Obama just wants an extension of the current bill. DeFazio doesn’t.

DeFazio’s Great idea!

You remember Pete DeFazio: he’s the Democratic congressman from Oregon that  is currently the head of the Subcommittee on Highways and Transit. I’ve suddenly decided the man is an un-sung genius!

His idea is that, instead of more taxes at the pump, we should be taxing oil speculators! If you remember last year’s price-gouging increases, you probably remember that most experts finally decided that the price increases were more because of speculators buying oil futures than any shortage or delivery problem. It turned out that, although many transportation-related companies such as trucking, rail and airlines buy oil futures as a hedge against future price increases, much of the speculation was being done by big banks-the same banks we just ended up bailing out with the TARP funds! They never take possession of the fuel-what they want to do is hold the rights to it at one price and sell those rights when the price goes up. If they do enough of it, the price goes up simply because they bought enough of the supply that it appears there is more demand or a shortage. All the while folks were blaming the War in Iraq, the oil companies and assorted sheiks in the Middle East, it was greedy bankers right here in our country that were putting honest truckers out of business and causing a  major meltdown of the economy. Our own dear banksters did more than nearly any other thing to plunge this country into a serious recession. Making sure they get the payback they have coming just seems like poetic justice.

DeFazio’s idea is to impose a 0.02% tax on all oil futures contracts. Two cents on each hundred dollars doesn’t sound like much but many of these contracts are for billions of dollars. Buyers who actually take possession of the oil, like trucking, rail, airlines, get a rebate on the fuel they use so that they aren’t saddled with the tax. The speculators however,the guys who actually drive the price of fuel sky-high, get to pay for transportation infrastructure. Much as I detest taxes just on principle, I realize taxes to maintain infrastructure are one of the most legitimate taxes we pay. Since there are so many other taxes through which the average highway user pays into the infrastructure, it seems only fitting that we tax the very people who unbalance the market and drive prices up through market manipulation.

There’s an added benefit here-it reduces the attractiveness of using oil futures to the extent that prices are driven up. This is the kind of legislation that truly levels the playing field for the little guy. Someone will no doubt say that this is anti-capitalism. Maybe so-but most taxes don’t help the marketplace and probably harm it. Your take-home pay would go a lot farther if you didn’t have to pay the fuel tax at the pump. How is it different? The more I think about it, the more I’m inclined to wonder why we stop at 0.02%.  How about .2%?  Or more?