Increasing postal rates aren’t the only extra cost small businesses may have to worry about soon. A bill in the U.S. House would boost the federal gas tax by 15 cents over the next three years, if passed. U.S. Rep. Earl Blumenauer (OR-3), who proposed the increase, claims the added cost is necessary to replenish the Highway Trust Fund to maintain the nation’s roads and bridges.
To make matters worse, the Tax Foundation, a Washington-based think tank, has just released a report suggesting that current gas taxes and other fees are only sufficient to meet about half of current state and federal highway spending.
Joseph Henchman, Tax Foundation vice president of state projects and the author of the report, writes:
“In the last year, Virginia and Massachusetts raised a number of taxes for transportation purposes, a handful of states raised gasoline taxes, Oregon began testing a vehicle mileage tax pricing system, and other states proposed new or expanded toll roads.”
Henchman believes funding for road maintenance at the federal and state level should come from a mix of user fees including tolls, gas taxes, and other vehicle related fees.
While infrastructure is certainly important, more added costs come at the worst possible time for already squeezed small businesses dealing with a challenging economy. Added fees and taxes hit small businesses in two ways.
First, they can increase shipping costs for B2B or B2C businesses by increasing the costs for the carriers they use (like UPS). These carriers in turn eventually increase costs to compensate.
Second, they can increase travel costs including regular long commutes if necessary for your business. (As an example, daily travel on a state toll road like the PA Turnpike in Southeastern Pennsylvania can run thousands of dollars per year. And that’s even with cost saving options like E-Z Pass for regular commuters. So any increase will be costly.)
Whether or not any of these cost increases become a reality this year or in the future, it’s a good idea to begin looking at how they affect your bottom line. And, of course, it’s time to look for any options to cut these costs by making changes in your business today.
Though not every option will work for every business, here are some ideas to explore:
First, if applicable in your business, consider introducing digital products like ebooks and other downloads as opposed to physical books, discs, etc. This might also be a good solution for your customers who may become less eager to buy as shipping costs increase. If you ship other kinds of products or merchandise that can’t be replaced with digital versions, examine your current shipping arrangements and start determining now whether there are any ways to cut costs.
Second, introduce more telecommuting in your business. This could include looking at working more from a home office where applicable and even meeting with clients or customers via Skype or Google Hangouts. It might also include a more mobile set-up for your staff or team. Again, this won’t work for every business, so you’ll need to look at your specific situation.
You should also consider contacting your U.S. Representative to let him or her know how increases in transportation costs would affect your business.
Gas Tax Photo via Shutterstock
Costs are soaring. So does that mean that it will get harder and harder to live? So what’s the next thing that will have increasing costs?
One more reason I intend to work from home more and continue living close to my workplace. Now if I could just convince a few million other people to do the same…
Gas prices are always going up, it shouldn’t surpise people that the government is going to make it more expensive.