A few weeks ago, the US government issued an announcement to its citizens about a new fuel tax, with a message that was clear: “The fuel tax will increase by $1.20 per gallon for a family of four.”
The news wasn’t exactly a surprise, since the US has been taxing the consumption of gasoline and diesel since 2010.
But it was a bit of a shock when a spokesperson for the Department of Energy told Bloomberg Businessweek that the government would be increasing the fuel tax by just one cent per gallon.
“This is a one cent increase per gallon of fuel.
It will increase to $1 per gallon starting in 2020,” the spokesperson said.
The spokesperson went on to explain that the increase would be based on “gasoline prices,” which are currently around $2 per gallon, and would not affect the average person’s monthly fuel bill.
The fuel tax was supposed to take effect on January 1, but was delayed a bit because of the federal government shutdown, which caused the government to cut off some government services and the availability of food and other necessities.
While the increase in fuel taxes was a good idea, it wasn’t what everyone wanted to see in the US.
“I think it’s pretty obvious that the US is going to be paying more than the rest of the world,” said Daniel McEwen, a senior policy analyst at the Center for American Progress.
“The US will be paying for the military to be here, the military will be providing for this infrastructure, it will be getting its troops trained, and the military is going into a lot of places where they have a lot more capacity than they have in the past.”
The new fuel taxes, McEwing said, will affect people in the middle class and lower income people the most.
“We need to be making sure that we don’t have a middle class tax, where the government is paying more for gas than it is paying for food,” McEwald told The Verge.
“That’s a problem, and that’s what this whole situation is about.”
It’s not just the fuel taxes that are getting in the way of the American middle class.
In April, a new report found that the federal minimum wage is only one percent higher than what it was in 2014.
As McEwens colleague Mark Perry points out, the report also found that US households pay more for health insurance than the world average, with more than a third of American households paying more.
As a result, Mc Ewen said, the new fuel price increase is likely to have a significant impact on people on the margins.
“People who are trying to make ends meet, people who are working at minimum wage or below, or even people who don’t want to work full-time and just want to pay for their own healthcare,” Mc Ewens said.
“They’re going to get hit a lot harder.”
The government’s shift to higher fuel taxes will affect many of the same groups that the Trump administration is trying to reach.
“In some ways, it’s a continuation of the Trump tax cuts that have been implemented over the last few years, and I think that’s a mistake,” McElroy told The Guardian.
“A lot of these tax cuts, for example, the tax credit for health care, they’re going back into the pocket of the middle-class.
And so, I think we’re going towards a very similar outcome, where they are actually paying more.”
But the fuel price hike is also going to have an impact on other groups that are more heavily impacted by the economic downturn.
“It will have a very detrimental impact on those who are struggling with housing, and it’s going to affect those who don the most, the poorest, the hardest-hit families,” Mc Elroy said.