Reagan decides to index US gasoline tax to Construction Cost Index

One of my frustration with the American energy policy is that it is stop/start. We have an energy crisis and everyone runs around wanting fuel efficient cars, bio fuels, and so on. Just about the time we start to make progress, the price of oil drops and a new federal administration comes in. Government spending is cut and people start buying SUV's.

Ronald Reagan felt that a gasoline tax was a user tax. What if during his administration, his Council of Economical Advisors made the following recommendations:

1) Index the gasoline tax to the construction cost index. This would avoid the shrinking in real spending on road construction and improvements. The selling point is help provide jobs to the Reagan working class voters. Also this would also reduce the oil imported from countries such Russia and Iran.
2) To help sell the bill, dedicate a inflation adjusted penny per gallon for research into cellulose alcohol and other bio fuels. With the depression in the agriculture section the potential for new uses of farm crops would help get the vote of farm state congressmen
3) To help sell the bill, dedicate a inflation adjusted penny per gallon for support for mass transit. Outside of a few major cities, the American mass transit systems are very weak.

What would be the long time impact of this had happened.
 

SsgtC

Banned
1) Index the gasoline tax to the construction cost index. This would avoid the shrinking in real spending on road construction and improvements. The selling point is help provide jobs to the Reagan working class voters. Also this would also reduce the oil imported from countries such Russia and Iran.
The US didn't import oil from either Iran or Russia in the 80s. Most sources of oil for the US are in the Western hemisphere (Venezuela, Mexico, the US itself, Canada). This provision wouldn't fly. It sounds great in theory, I'll give you that. But it would be argued, and would probably also be true, that indexing the gas tax to construction costs would just give construction companies an excuse to price gouge.

2) To help sell the bill, dedicate a inflation adjusted penny per gallon for research into cellulose alcohol and other bio fuels. With the depression in the agriculture section the potential for new uses of farm crops would help get the vote of farm state congressmen
This would work. Farm subsidies, and that's really what this is, are usually pretty popular.

3) To help sell the bill, dedicate a inflation adjusted penny per gallon for support for mass transit. Outside of a few major cities, the American mass transit systems are very weak.
This is more likely to kill the bill than sell it. America has mass transit. It's called aircraft. The country is just too damn big for anything else honestly. Outside of those few major cities, there just isn't the population density to make traditional mass transit (Subway, light rail) work. And vast sections of the country could care less about it tbh. This would be seen as NYC and LA asking the rest of the country to pay for their transit systems. Whether it's true or not, that would be the perception.
 
Another issue is that the suburbanites who would be paying more for gas in this scenario are essentially Reagan's base. A similar proposal is probably more likely to get passed in the Carter administration, or as an offest in the Tax Reform Act of 1986.
 
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