Excise taxes on vehicle fuels need to rise. This because inflation errosion and mission creep under funding are stressing the various trust funds. About 10 cents per gallon equivalents would be about right split evenly between States and Federal. I'd very much like to see the Feds offer to reduce the Fed Excise component 1 cent for every 1.2 cents of State increases up to say an 11 cents increase combined.
These are not sales/consumption taxes. Fuel taxes are a convienient form of use fee. They aren't perfect nor perfectly fair but they are taxes after all. I've no truck against shifting to other forms of use fees. The "gas tax" is simple and difficult to avoid. Most alternatives have the flaws of expensive to implement and subject to much political distortion.
What higher gas taxes will not do is anything to address the externalities Mankiw posits. Eurpoe has higher gas taxes and still sees the same general trend towards POV mobility choice. I am particularly enraged by the budgetary argument. These are TRUST FUND monies. Even now at both the state and Federal levels that trust is being abused and Mankiw advocates even further errosion. On the economic front mobility = wealth. Mankiw thinks that we can discourage mobility and become wealthier for it. I am not convinced.
Changing the nature of these use fees traditionally used to cover internalized infrastructure costs to one of a new general tax subject to state and federal whim is extraordinarlly poor public policy unless there's been a change in the trustwortiness of our electeds that I've missed and Mankiw has discovered.
