Senator pitches tax-free gas accounts

[I AM NOT THAT GUY 5,715]

Healthcare Gasoline Savings Accounts

Workers would be able to divert a portion of their paychecks into an untaxed account that can be used to pay for gas and other fuels under new legislation set to be introduced in the Senate this week.

The legislation, authored by Sen. Mark Begich (D-Alaska), is aimed at lessening the burden of high gas prices on consumers. The bill comes as lawmakers on both sides of the aisle are scrambling to do something about gas prices, which are nearing $4 a gallon. (Really? We are already paying more than that in California)

Begich, in a short interview with The Hill Tuesday, said he modeled the legislation on medical savings accounts, which allow the public to set aside a certain portion of money before taxes for medical expenses.

“You get to put aside pre-tax dollars and the result is you get to buy your fuel with pre-tax dollars,” Begich said.

“On average, let’s assume people have a tax rate of 20 percent, which is probably average for an individual. At $4 a gallon, you’re going to save 80 cents right off the bat.”

Begich said he is working to gain co-sponsors for the bill, which he will introduce Wednesday or Thursday.

The legislation would sunset after two years in order to give lawmakers time to pass energy legislation that begins to diversify the country’s energy portfolio, Begich said.

The bills comes as Republicans are set to consider legislation this week that would expand domestic oil-and-gas drilling. Democrats, meanwhile, are hoping to secure a vote in both chambers on a proposal to eliminate billions of dollars in tax breaks for the oil industry.

Begich, a drill-state Democrat, blasted proposals to cut the tax breaks.

“If people think by rolling back subsidies, you’re going to lower the price of gas, it’s a total disconnect from reality,” he said. “These ideas that they’re kicking around are nice discussion points, but they’re not going to do anything. We’ve got to get some immediate solutions on the table.”

Begich is one of seven Democrats who voted against a provision to cut oil-industry subsidies in February.

http://thehill.com/blogs/e2-wire/677-e2-wire/158977-sen-begich-to-float-bill-creating-untaxed-gas-accounts

[^_^ 5,021]

I don't mind the concept of the federal government foregoing some revenue to assist consumers with buying fuel.

However, I'd prefer to see a cap on how much pretax income one can use to buy fuel. High enough to include your average low income family driving a beat up old compact; low enough to not excessively benefit gas guzzler drivers and high net worth individuals.

[Mr. Big Dog 10,747]

Let's consider this for a second: If I make $200K/year, my pre-tax GSA contributions would reduce my taxable income in the 35% bracket. The $4.00 gallon of gas would now effectively cost me $2.60. If I make $15K/year, my pre-tax GSA contributions would save me nothing since I don't owe any federal income tax to begin with. My $4.00 gallon of gas would still cost $4.00. So with a proposal like this we would make gas more affordable for the better off and keep it right at $4.00 for the working poor who can afford the $4.00 per gallon the least. Excellent idea, right?

[Ban Hammer 13,352]

i wouldn't mind gas being $5 a gallon. might clear the riffraff off the roads.

[Zero Sum 305]

Might not be a bad idea. Since gas is already taxed, its not like the government is getting any less revenue from the purchase of gasoline itself. Make this an option for employees that drive a lot- and perhaps tier the benefit for more fuel-efficient vehicles.

[Mr. Big Dog 10,747]

Might not be a bad idea. Since gas is already taxed, its not like the government is getting any less revenue from the purchase of gasoline itself. Make this an option for employees that drive a lot- and perhaps tier the benefit for more fuel-efficient vehicles.

Federal gas tax is like $0.20 a gallon. How does that compensate for the proposed $1.40 discount for those that have income in the 35% bracket or even the $0.60 for those in the 15% bracket? And again, those that need the break the most will get the least of a break, if they get any break at all.

[Zero Sum 305]

Federal gas tax is like $0.20 a gallon. How does that compensate for the proposed $1.40 discount for those that have income in the 35% bracket or even the $0.60 for those in the 15% bracket? And again, those that need the break the most will get the least of a break, if they get any break at all.

If we frame it in this context, then yes- I particularly agree with you. From the Federal revenue perspective, all this discount would do is ensure that consumption is not diminished. A more use-appropriate incentive would be to pair this discount to actual miles driven, regardless of income. If it were up to me though, I'd allow the sector that needs the break the most to actually get it. A balancing act between financial need and usage.

[Mr. Big Dog 10,747]

How about we don't fall victim to activism for once? I mean, this proposal is nothing but activism. It's bad activism to boot providing the biggest benefit to those that can most afford the higher gas prices. If we must do activism, let's unfold that activism in the commodity casino.

[IndigoSkies 168]

Why not pass a decree that says a gallon of gas now costs only $2.50. It can never go up or down for next five years. Much simpler rule and it would ensure everyone get's to buy fuel at $2.50. But this can't be done. This is government dictating something for good of the citizen. That's socialism. We can't have any of that around here.

[Zero Sum 305]

How about we don't fall victim to activism for once? I mean, this proposal is nothing but activism. It's bad activism to boot providing the biggest benefit to those that can most afford the higher gas prices. If we must do activism, let's unfold that activism in the commodity casino.

Isn't most politics these days activism from any given perspective?