Word: gal
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Dates: during 1980-1989
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Even though an increased tax may be healthy policy in the long run, most U.S. motorists see it as bitter medicine. Americans hold this view even though they pay an average of only 92.6 cents per gal., including all taxes, which is one of the lowest levels in the world -- and below 1950 prices after inflation is deducted. In a TIME survey conducted last week by the opinion firm Yankelovich Clancy Shulman, nearly three-quarters of those polled said they opposed any tax boost to reduce the budget deficit. A nearly equal number acknowledged, however, that an increase seemed likely...
Still, supporters of a gas-tax increase say it has emerged as the best option for cutting the deficit. Each 1 cents per gal. would bring in $1 billion in annual revenue, according to a widely used rule of thumb. Rostenkowski last month suggested a 15 cents-per-gal. increase but would probably settle for less. To ease the burden on low-income motorists, Rostenkowski would provide them with income tax credits. Says Rostenkowski: "I don't think it's as regressive as people make it out to be." Advocates of the tax also point out that by throttling back...
Some economists point out that costlier fuel would slow down the economy and boost inflation somewhat. According to a study by the WEFA Group, a Pennsylvania-based forecasting firm, a 10 cents-per-gal. increase would accelerate inflation by about one-third of 1% and cut GNP by $10 billion, or one-fifth of 1%. The firm estimated that the slowdown in growth would lead to 80,000 layoffs in the first year of the tax increase...
State legislators maintain that federal fuel taxes should be used only to pay for roads and bridges, as they mostly are now, and not to cut the deficit. Besides, with taxes already ranging from Georgia's 7.5 cents per gal. to Wisconsin's 20.9 cents, state leaders are worried that a higher U.S. levy would restrict their ability to increase their own rates. Georgia Governor Joe Frank Harris has proposed a 6 cents raise in his state's 7.5 cents tax, and last week Governor Michael Dukakis asked for a 6 cents increase in Massachusetts' 11 cents levy to help...
...General Motors and 26.6 for Ford. GM Chairman Roger Smith has denounced a higher gas tax as "cruel" and "unfair" and argued that it would dampen auto sales. Ford has straddled the fence. Vice Chairman Harold Poling said his company would support a phased increase of 15 cents per gal. over three years, but only as a last resort for cutting the deficit...