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Governments also subsidize gasoline.

by cwoolfe 1y ago

mysterydip 1y ago
Why do they tax it? Wouldn't it make more sense to lower the amount of subsidy?
- toomuchtodo 1y ago
  Road maintenance. It's already not taxed enough to pay for existing roads. Auto fuel/mileage taxes will need to go up to continue to pay for roads in the future. https://en.wikipedia.org/wiki/Fuel_taxes_in_the_United_States https://en.wikipedia.org/wiki/Fuel_taxes_in_the_United_State... https://en.wikipedia.org/wiki/Highway_Trust_Fund https://en.wikipedia.org/wiki/Highway_Trust_Fund (road damage is roughly proportional to the fourth power (not square root) of axle weight (and linear with axle count), so it's heavy trucks doing most of the damage to road surfaces through a compression wave that penetrates into the asphalt surface, as axles travel over) https://hackaday.com/2025/06/26/field-guide-to-the-north-american-weigh-station/ https://hackaday.com/2025/06/26/field-guide-to-the-north-ame...
  - mort96 1y ago
    So, I'm in favor of a gasoline tax. But I don't get why you'd want to both subsidize and tax. The government gets money from the tax, sure, but if they get $X from taxes and spend $Y on subsidies, couldn't they just remove the subsidies, change the tax to $X-$Y, and use the money that used to go to subsidies to fund road maintenance? If that still isn't enough, then you can increase the taxes. To be honest, I suspect I know why it is like this. The subsidies go to oil companies, while the tax comes from citicens. So the combined effect of oil subsidies and fuel taxes is to transfer wealth from citizens to oil companies.
    - Fwirt 1y ago
      Somebody please correct me, but I believe the subsidies and taxation happen at different levels of government. The subsidy is federal, while the taxes are primarily state and local. The taxes help fund maintenance of local roads. Your federal income tax pays for the subsidies but the gas tax pays for your local roads.
    - tzs 1y ago
      I believe that the subsidies are for oil production and refining in general. When the subsidy happens you don’t know how much of what you are subsidizing will end up becoming gasoline. There are also imports to be considered. If you take the money for roads out from the production subsidies then domestic producers will be effectively paying more toward roads than foreign producers that export to the US. Taxing gasoline to support roads does a much better job of approximating a per mile road user fee which is what would probably be the best way to do it if the overhead could be kept low.
- ksherlock 1y ago
  Sometimes a subsidy is a big pile of cash. Sometimes a subsidy is an accelerated depreciation schedule.
meragrin_ 1y ago
How so? Please give very specific answers which don't include the normal business practices afforded to every other business or incalculable garbage.
- cwoolfe 1y ago
  https://gemini.google.com/share/50aa1139866b https://gemini.google.com/share/50aa1139866b

Governments also subsidize gasoline.

mysterydip 1y ago

Why do they tax it? Wouldn't it make more sense to lower the amount of subsidy?

toomuchtodo 1y ago
Road maintenance. It's already not taxed enough to pay for existing roads. Auto fuel/mileage taxes will need to go up to continue to pay for roads in the future. https://en.wikipedia.org/wiki/Fuel_taxes_in_the_United_States https://en.wikipedia.org/wiki/Fuel_taxes_in_the_United_State... https://en.wikipedia.org/wiki/Highway_Trust_Fund https://en.wikipedia.org/wiki/Highway_Trust_Fund (road damage is roughly proportional to the fourth power (not square root) of axle weight (and linear with axle count), so it's heavy trucks doing most of the damage to road surfaces through a compression wave that penetrates into the asphalt surface, as axles travel over) https://hackaday.com/2025/06/26/field-guide-to-the-north-american-weigh-station/ https://hackaday.com/2025/06/26/field-guide-to-the-north-ame...
- mort96 1y ago
  So, I'm in favor of a gasoline tax. But I don't get why you'd want to both subsidize and tax. The government gets money from the tax, sure, but if they get $X from taxes and spend $Y on subsidies, couldn't they just remove the subsidies, change the tax to $X-$Y, and use the money that used to go to subsidies to fund road maintenance? If that still isn't enough, then you can increase the taxes. To be honest, I suspect I know why it is like this. The subsidies go to oil companies, while the tax comes from citicens. So the combined effect of oil subsidies and fuel taxes is to transfer wealth from citizens to oil companies.
  - Fwirt 1y ago
    Somebody please correct me, but I believe the subsidies and taxation happen at different levels of government. The subsidy is federal, while the taxes are primarily state and local. The taxes help fund maintenance of local roads. Your federal income tax pays for the subsidies but the gas tax pays for your local roads.
  - tzs 1y ago
    I believe that the subsidies are for oil production and refining in general. When the subsidy happens you don’t know how much of what you are subsidizing will end up becoming gasoline. There are also imports to be considered. If you take the money for roads out from the production subsidies then domestic producers will be effectively paying more toward roads than foreign producers that export to the US. Taxing gasoline to support roads does a much better job of approximating a per mile road user fee which is what would probably be the best way to do it if the overhead could be kept low.
ksherlock 1y ago
Sometimes a subsidy is a big pile of cash. Sometimes a subsidy is an accelerated depreciation schedule.

meragrin_ 1y ago

How so? Please give very specific answers which don't include the normal business practices afforded to every other business or incalculable garbage.

cwoolfe 1y ago
https://gemini.google.com/share/50aa1139866b https://gemini.google.com/share/50aa1139866b