We missed opportunity for painless tax increase
Oh, what might have been. Earlier this year, Gov. Jack Markell proposed a 10-cent-per-gallon increase in the gasoline tax to help pay for road projects.
It would have been the first gas tax hike in about 20 years. It would have been a small increase. Adjusted for inflation, it wouldn’t have been an increase at all.
And as we now know, it would have been the most painless tax increase in the history of the universe.
Okay, I’m exaggerating, but there’s something about collapsing gas prices that makes me a little giddy.
With the Redskins, once again, leaving me nothing to root for, I look for excitement by driving by the local Wawa.
The Redskins may not be able to put points on the board, but I can cheer for the lower gas prices posted outside markets and gas stations.
Even seeing gas prices drop below $3.50 a gallon was a big event. The Associated Press even did a story about it. In August, it noted that gas prices in Delaware had fallen to $3.42 a gallon - 21 cents less than the previous August.
In other words, legislators could have voted for the full 10-cent increase and we’d still have seen an 11-cent decline at the pump.
That was just the beginning. I couldn’t believe it when gas prices broke the $3 barrier. It was better than the Redskins making the playoffs.
Yesterday I saw $2.59 a gallon. It was almost like my high school days, when I could put a few dollars in the tank and drive around all night.
(Brief digression: As soon as oil prices began sliding, I began seeing killjoy stories about all the economic problems that would accompany lower gas prices. Two questions: Seriously? And, are falling gas prices President Obama’s fault?)
We could have had a 10-cent-a-gallon tax increase and still be paying a buck less for gas.
And we’d be on our way to better roads. I don’t buy the argument that we’re saving money by not increasing the gas tax. I’ve hit potholes that have shortened the life of my tires. One way or another, you pay.
So maybe the gas tax will be revisited. One thing is certain: Taxes in general will be revisited. Delaware has a huge, looming, long-term problem with its tax base.
According to a short but potentially momentous story in the News Journal, Delaware is seeing some revenue sources remain static - or even decline - while education and Medicaid costs continue their rapid rise.
One of our chief sources of revenue, taxes paid by casinos, has been eroding faster than Delaware’s shoreline. Since 2004, gambling revenues have declined 30 percent when adjusted for inflation.
A full 56 percent of the state’s revenue sources aren’t tied to the economy, which means they won’t necessarily rise as businesses grow and prosper.
This led Markell to utter the “S word” of Delaware politics: sales tax.
He said, “There is a lot of interest in taking a hard look at the reliability of our revenue sources.
“This is not a precursor to saying I think we ought to have a sales tax.”
Which to me sounds a little like a precursor - or perhaps a precursor of a precursor - to saying we ought to have a sales tax.
In any case, one of the members of a committee being formed to evaluate Delaware’s tax structure, UD economic professor Ken Lewis, said nothing is off limits, which presumably means a sales tax would be up for consideration.
If state legislators - even members of Markell’s own party - were afraid to follow him on the gas tax, how tough would it be to sell a sales tax?
Actually, we do have a sales tax. We just prefer calling it a gross receipts tax, because this makes everybody feel better.
According to the State of Delaware website, “the term ‘gross receipts’ comprises the total receipts of a business received from goods sold and services rendered in the State.”
Yup, businesses pay taxes on total receipts, forcing them to pass that cost on to you. (You have to admit, though, “home of tax free shopping!” sounds a lot better than “home of the hidden sales tax!”)
One way or another, you pay.
But at least for a time we’re paying a lot less for gas.
