Photo by JosephLeonardo
D.C. Council Chairman Phil Mendelson is proposing that the District change up the way it taxes gasoline. Currently drivers pay 23.5 cents per gallon at the pump. But in language Mendelson plans to add to Mayor Vince Gray’s proposed budget for the 2014 fiscal year, that tax would be replaced by an 8.3 percent wholesale tax, The Washington Post reports.
It’s unlikely, though, that drivers would get any discount on gasoline going forward. Any costs from the wholesale tax would just get passed on from distributors to gas stations and finally back onto customers. But Mendelson tells the Post a wholesale tax is less volatile for the city’s highway funding, and reacts to more fuel-efficient cars vehicles:
“When you go out and buy a Ford Focus, your gas mileage is better than it was with your old Range Rover, so you buy less gas,” Mendelson said. “This removes the volatility from our gas tax.”
A shift in the gasoline tax would also bring D.C. in line with states that have recently adopted the same change. Last month, Virginia Gov. Bob McDonnell signed into law a transportation bill that discarded the state’s old 17.5 cents-per-gallon tax with a 3.5 percent wholesale tax.