Economics professor addresses sales tax

NORFOLK, Va. (WAVY) - Lawmakers and pundits are already battling over Gov. Bob McDonnell's proposal to end the gasoline tax and increase the sales tax.

The intent is to pay for roadways, but many are questioning how it would work.

10 On Your Side crunched some numbers with Old Dominion University professor Gary Wagner to see how it would really effect your wallet.

It cost Lucy Benavides just more than $56 to fill up her gas tank. Just more than $3 of that is the state gasoline tax. 

Benavides said she fills up at least once a week so if the gas tax were to be dropped, she would save $145 per year.

"That's great, I would love that," Benavides said.

On the flip side, WAVY.com spoke with shopper Jennifer Worden who had just spent around $45. Her sales tax was $2.25 and would increase by 37 cents with McDonnell's proposal.

"It doesn't seem like it hurts all that much, I mean I guess 37 cents is 37 cents," Worden said. 

But that can add up.

"I did some sort of rough calculations, so if the average house in Hampton Roads saw in increase from five to 5.8 percent it would amount to about $125 a year," Wagner said.

The gas tax hasn't increased in 25 years and Wagner said something must change.

"If you were to use sales tax base, what's going to happen is that you have a much broader base. You're going to tax and it's less likely to erode over time and it's going to be a lot more stable when the economy fluctuates," Wagner said.