VA Governor Bob McDonnell Unveils Terrible Plan To Replace Gas Tax With Sales Tax

A blog about business and economics.
Jan. 9 2013 9:24 AM

VA Governor Bob McDonnell Unveils Terrible Plan To Replace Gas Tax With Sales Tax

MINERAL, VA - AUGUST 24: Virginia Governor Bob McDonnell (L) and Rep. Eric Cantor (R-VA) arrive for a tour of the North Anna Power Station, which remains offline after losing offsite power in the wake of yesterday's 5.8 earthquake August 24, 2011 near Mineral, Virginia.

Photo by Scott Olson/Getty Images

Virginia Governor Bob McDonnell is out this week with the most straightforwardly terrible policy I've heard in a while, replace the state's gasoline tax with higher sales taxes.

I get it. People don't like gas taxes because people buy gas a lot and they'd rather the gas was cheaper. What's more, like all consumption taxes it's a bit regressive. But swapping it out for a higher sales tax doesn't eliminate either problem. If anything, it makes the tax structure even more regressive since the carless minority in the United States is disproportionately composed of poor people. The nice thing about a gas tax is that for all it annoys people, it does have environmental and highway congestion benefits. Higher retail sales taxes have all the annoyance but none of the benefits. The only people who'd win here are oil producers, and it's not like Virginia is a big oil state.


It's hard to know what McDonnell is even thinking here, but I suspect we're witnessing a casualty of energy policy in the United States increasing being subordinated to broader culture war issues. People who dislike abortion, gun control, and marriage equality are also supposed to be enthusiastic about fossil fuels even in totally nonsensical ways.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.



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