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A 15 cent federal gas tax could kill entrepreneurship

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As reported today, December 30 on, via The Washington Post, Congress is toying with a proposal to raise the federal gas tax by 15 cents per gallon, adding to the 18.5 cent tax already paid by those filling up at the pump. This would allegedly shore up the Highway Trust Fund, which has been thrown out of balance by the surge of hybrid vehicles taking to the streets - and would hit entrepreneurs in their wallets.

First, let's look at the facts: gas is around $3.69 per gallon ($3.40 or thereabouts at a station in West Springfield, Mass.) Entrepreneurs drive a lot: to client offices for meetings, to suppliers, to networking events. And many entrepreneurs have not purchased hybrid vehicles because they are more expensive than standard vehicles. For example, a Toyota Highlander Hybrid starts at $40,170 -- compared to the standard Highlander, which starts at $29,020. That's a savings of over $11,000, not chump change for entrepreneurs.

Further, as The Washington Post points out, a gas tax may not be the most effective method of funding the Highway Trust Fund because more people with the money to do so are purchasing hybrids. What the tax increase does is hurt those who can't afford hybrid vehicles, like entrepreneurs and middle and low-income Americans. It raises the price of gas even further in a time when people are already trying to be more fuel-efficient due to just the price of gas.

Unfortunately, the second proposal, also set forth by Rep. Earl Blumenauer (D-OR), is to tax by miles driven. That's a little Big Brother-ish, not to mention hitting entrepreneurs again, particularly home-based entrepreneurs that deliver goods to customers and clients.

Either way, taxing is not the answer to shoring up the Highway Trust Fund, particularly when it means affecting those who propel the economy forward.



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