Gas Taxes

Trump, Dems, Business Want a Gas Tax Increase. The President's Economic Advisers Suggest a Better Idea.

Mileage-based user fees would charge drivers for how much road they use, not how much fuel they burn.



Aside from banning bump stocks, no policy in Washington seems to have more bipartisan appeal than raising the federal gas tax.

The idea is beloved by such Democrats as Rep. Peter DeFazio of Oregon and Sen. Tom Carper of Delaware—the ranking minority members of the House and Senate committees that handle infrastructure. It's beloved by the Chamber Commerce, which floated the idea of a 25 cent per gallon tax increase in January. Some congressional Republicans, such as House Transportation Committee Chairman Rep. Bill Shuster (R-Penn.), have voiced their support. So has President Donald Trump, who has suggested a gas tax hike could help pay for the direct federal spending in his $1.5 trillion infrastructure plan.

Less impressed: the president's own Council of Economic Advisers.

In a Wednesday report, the council outlined several problems with the current gas tax, from its failure to adequately charge more fuel-efficient vehicles for the wear and tear they cause on the roads to its failure to charge drivers for traffic congestion.

Far from raising the gas tax, the report suggests a wholesale shift toward the funding mechanism where drivers are charged for the road they use, not the gas they burn.

"Assessing a charge based on mileage instead of gasoline consumed," the report says, "would link consumers' choices more closely to the costs they impose, including congestion, emission, pavement damage, and so on."

A gas tax is blind to the motorists' choices and the externalities they impose on public roadways. Mileage fees, by contrast, can be fine-tuned to capture these costs. City drivers could pay more to cover for higher costs of maintaining urban roadways, for example. Highway prices could vary based the time of day, to moderate rush hour traffic.

Mileage-based user fees are increasingly popular among policy experts, says Baruch Feigenbaum, a transportation policy analyst at the Reason Foundation (the nonprofit that publishes this website). Unlike tolls charged to access certain roads or stretches of road, mileage fees would apply to every mile driven on any public road.

"I think most folks in the transportation world are proponents of the 'users pay, users benefit' rationale," says Feigenbaum. "It's the most efficient. The folks using the roads are the ones who are influencing the policy. It's a direct relationship."

Feigenbaum points to a number of states where experiments with mileage-based user fees are already underway.

Oregon—coincidently the first state ever to impose a gas tax—has operated a voluntary "vehicle mileage tax" program since 2015. Drivers who opt into the program pay a 1.7 cent–per–mile fee and receive a rebate for the gas taxes they pay.

California operated a "road charge pilot program" from July 2016 to March 2017, testing the idea out on some 5,000 volunteers. Washington state is conducting a similar mileage charge pilot program with 2,000 drivers this year. Colorado, Hawaii, Utah, and Minnesota are all studying the idea too.

Both Feigenbaum and the Council of Economic Advisers report concede that mileage-based user fees have yet to be tried on a mass scale, and that the technology still has a way to go before it is ready for implementation on the federal level.

That makes a federal gas tax increase more attractive in the short term, particularly for those looking at it as a way of paying for Trump's infrastructure proposal. But it still faces an uphill struggle, with many Republican lawmakers firmly against it. "I oppose raising the federal gas tax," Senate Environmental and Public Works Committee Chair John Barrasso (R-Wyo.) told the Washington Post. Sen. John Cornyn (R-Texas) has also said a gas tax is not going to happen.

Conservative pressure groups have come out against the idea as well, linking the issue to the recently passed tax reform bill.

"Just a few months ago, Congress provided long-awaited and much-needed relief to American taxpayers through a comprehensive overall of the federal tax code," says Mary Kate Hopkins of Americans for Prosperity. "A gas tax increase would claw back a large portion of that benefit just as individuals and families are starting to see the impact of tax reform."

Feigenbaum suggests that a strong personal push by President Trump could be enough to overcome this opposition. Whether the president would be willing to sabotage his first major legislative achievement to pay for his second remains to be seen.

NEXT: School Chief Threatens to Punish Student Protesters Who Skip Classes by...Banning Them from Attending Classes

Gas Taxes Donald Trump User fees Transportation Policy

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

Please to post comments

84 responses to “Trump, Dems, Business Want a Gas Tax Increase. The President's Economic Advisers Suggest a Better Idea.

  1. Milage based user fees are an incredible invasion of privacy. It is just the government monitoring how much you drive. The great thing about gas taxes is, the government has no idea how much each person has paid and thus no idea how much each person is driving. That is otherwise known as privacy. A mileage tax is just the government demanding you tell them how much you are driving, which is none of their business and nothing but an invitation for them to control how much you drive if they wish or to demand to know where you drive. Fuck that.

    The point of liberties is freedom, not efficiency. Time and again self-proclaimed libertarians love freedom right up until someone convinces them taking away their freedom is “more efficient” and they forget all about freedom. This is one of those times. Fuck off. I don’t’ give a shit if the tax is efficient. There is more to life than efficiency you fucking nerd.

    1. I agree, mileage fees should be opposed on privacy grounds alone.

      1. You already have to report your mileage when registering your vehicle.

        1. How many states do that? Don’t assume it’s the same everywhere.

          1. My state doesn’t do it.

            1. I’m making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life.

              This is what I do…

            2. I’m making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life.

              This is what I do…

        2. Not mine either, unless you are transferring title.

          1. VA – only on transfer.

            1. Ditto WA.

        3. In my state mileage is recorded at least 2x a year. When the car has it’s yearly inspection the reading is written on the sticker, we report the reading when renewing registration, and the insurance co. used to require the reading for yearly renewal, I guess they get that info from the dmv these days…

    2. The gas tax and other user fees only pay for part of government spending on infrastructure. The rest comes from general revenue, i.e. income tax and sales tax. Do you think it’s better for freedom to rely more on income taxes or mileage-based user fees?

      1. Infrastructure. Now there’s a slippery word that doesn’t equate to roads and bridges.

      2. I think it is better to pay for these things in a way that least infringes on my privacy and freedom. Whether everyone pays their “fair share” or the system is “efficient” however you define that are secondary concerns.

      3. This is completely deceptive. In fact, gas taxes have been diverted from roads and bridges to bike trails, walking trails, urban light rail systems, tearing out railroad tracks to convert the right-of-way into park land and many other uses. These diversions are the primary problem with funding for roads and bridges. The money intended for roads and bridges has been stolen to pay for other things.

        We have the same problem with aircraft fuel taxes. The money intended to pay for runways and air traffic control is instead being used to build, remodel, and expand terminals for the airlines. Now the push is to change to charging for every call to air traffic control to fund that separately. This supposedly would be a user fee. The interesting point to this is who benefits from these calls? The ATC system primarily is a cost imposed on general aviation to pay for something that commercial aviation needs, and needs general aviation to use.

        This is the problem with all of these “user fees”, no sooner does the money start rolling in, then others start planning to raid the money for something else.

    3. Citizen,

      Due to rationing all non-essential road users are prohibited by force of law from driving more than 100 miles per week. Your auto-drive vehicle will record any transgressions, and a ticket with notice to appear in court will be automatically mailed to you if you exceed your allotted mileage. Thank you for your compliance, and remember that compliance is mandatory.

      /the future, probably

    4. I agree with John on this. Why extend yet another opportunity for the IRS to audit you based on reported miles and actual miles driven?

      (IRS Auditor) ” We know where you live, we know where you work, we pulled your phone records and cell tower pings, and based on the evidence, we’ve deduced your round trip commute to be 38.4 miles Mr. Smith. Can you explain to us why you have only reported 22 miles per day?”

    5. Moreover, why does the federal government need so much fucking money for roads and bridges. States handle most of that now anyway. Eliminate most federal taxes pertaining to transportation and tell the states to come up with the best way to fund it in their states.

    6. Yep I don’t like the gas tax, but it’s the best compromise. The next thing you know life and car insurance companies are tapping that info to fuck you over even more.

    7. A simple odometer reading would hardly be government monitoring how much you drive. However, many of these proposals for mileage-based taxes are tied up with GPS readings to prove you were or were not in a state or on a particular road which was exempted.

      As it stands the fuel tax is a pretty good proxy for mileage by GVW use. The GVW is an important aspect of the impact a vehicle has on roads. And has the cash-flow benefit of being collected more or less continuously rather than quarterly or annually as a mileage-based tax would likely be collected.

      I would fight a GPS-based mileage tax tooth and nail as invasive, but could see fuel taxes replaced by an annual odometer reading scaled by GVW as a fair way to pay for roads (absent 100% toll-based funding for all roads, which would be damned inconvenient and just as invasive as the GPS-based mileage tracking).

      1. “a simple odometer reading” is not what they are discussing. They are discussing charging differently based on what road you are on and what time of day it is. That requires GPS and total tracking.

  2. It’s always toll roads with you people.

  3. The problem with mileage fees, is that in order to calculate them, the state would have to know how many miles you travel. And that means tracking your car in some way.

    1. They want to’out black boxes with GPS in all vehicles.

    2. And how many miles in which state.

      1. Oh, the hypothetical is far worse than just “which state.”

        That Britschgi could say something like “City drivers could pay more to cover for higher costs of maintaining urban roadways, for example” and blithely move on without commenting on the perpetual location tracking that would have to be involved to accomplish these location-specific fees is astonishing.

        When he says “the technology still has a way to go,” he’s papering over a hell of a lot of issues.

        1. Not necessarily. The computations could be done by a device inside the car which receives signals from roadsite transmitters but does not itself transmit, but is read like an electric meter each month.

          1. That’s still sharing the history of where you’ve been. And you realize smart meters can submit their data on a daily basis automatically these days? There’s no way, in designing a completely new mileage tracking panopticon, they would design it to be deliberately -less- convenient to nab your legally-mandated data if they’re going through the trouble of installing a device with an antenna in the car anyway.

  4. Watch as the black market in rollback teach booms.

  5. failure to adequately charge more fuel-efficient vehicles for the wear and tear they cause on the roads

    One way to cut down on this problem is for the state to stop subsidizing fuel-efficient vehicles. For example, EV charging stations. Why not collect the equivalent of a “gas tax” at these charging stations?

    1. That would derail all the government largesse designed to lure people to EVs they really wouldn’t otherwise buy. Since the public is too stupid to decide what cars to buy on it’s own.

  6. The heavier the vehicle the more damage it does to the roads, and the more gas it uses to move.

    So a gas tax is a mileage tax.

    1. Exactly. The only problem with the gas tax is that electric vehicles don’t pay anything towards the roads (although they pay towards electric). Higher mileage cars should absolutely pay more than lower mileage cars. Environmentalists especially should like this, since it incentivizes buying high mileage cars.

      1. Yes, and batteries are HEAVY, so electric vehicles (at least with current technology) are heavy vehicles. They should be paying a lot, not excepted entirely.

    2. Because batteries don’t weigh anything at all.

      A Prius weighs 3,000 pounds – just as much as a Subaru Impreza, Mazda 3, or similar models.

      1. “Because batteries don’t weigh anything at all.”

        That IS sarcasm, right? Because batteries weigh a shitload.

        1. Yes…yes it was obviously sarcasm, that was their point, seeing as how the next sentence points out how heavy a Prius is.

          1. Plus, when they catch fire in an accident, they burn VERY hot. Pretty much destroy the pavement …. and really do some damage on a bridge.

  7. Beyond incredible invasion of privacy, it should be tanked on that alone. Second, penalizing rural drivers to subsidize short trip, high congestion suburbanites.

    1. Far. Enter to harvest the organs of progressives to make up the revenue needed.

  8. Has no one considered taxing neither one?

    1. This, what does the federal government have to do with roads owned and operated by state and local government. ?

      1. They take in bunches of tax dollars, and then pass it out to the states along with a bunch of strings from people who have nothing to do with the state at all. That is how you get bike paths where no sane person would ride a bicycle.
        Otherwise, the states would levy all the gas taxes, and decide on their own what to do with the money. We can’t have that!

        1. My town is full of arterial where no sane person would ride a bicycle. A lot of it thanks to federal handouts. My city also now has a city council with five of it’s seven members as progtards.

      2. my only thought was setting up the tax like this for roadz.. would make a smoother transition to privatize them me thinks

  9. And how will the bike paths be taxed?
    Who pays for sidewalks?
    Do you mean the miles and miles of sidewalk along Hwy 27 that were built years ago, and immediately blocked off with “sidewalk closed” signs will go to waste? They were put in as mandated to get federal funds, because the land along that roadway is designated residential, so sidewalks are required Of course, the residential neighborhoods are not yet built, but there the sidewalks are, just waiting. They have never been used, and probably never will be. So in the brave new world, who will pay for all the useless things that gas taxes now pay for? Think of all the union labor not being used to build useless things.

  10. If the gas tax was only used to maintain roads, I wouldn’t object to much to increases at least to keep up with inflation (since it’s a set price per gallon and not a percentage). But I’m not convinced that’s the case.
    I share the privacy concerns about taxing by actual mileage.

    1. Some of things the policy guys are dreaming about like paying for congestion not only require authority to know how many miles you drive but where those miles were.

    2. Plus, you can never trust a filthy democrat anyway. And very few republicans anymore.

  11. I am not necessarily against mileage tax as long as certain conditions are met first. 1) get rid of gas tax for whatever jurisdiction imposes mileage tax. 2) How is your mileage determined? If the government adds anything to my vehicle to track my movements I definitely do not accept. If they create a way where I enter my mileage each time I fill up that may be slightly more acceptable but I still would worry about what the government is doing with that information but mostly about it being hacked and used in some other unintended manner. 3) The mileage tax only be used for roads. 4) Electric vehicles or other non-gas vehicles are not exempt from the tax. Good luck figuring out how to charge that category since bicycles and electric scooters do not have to report a mileage anywhere.

  12. Unlike tolls charged to access certain roads or stretches of road, mileage fees would apply to every mile driven on any public road.

    Either you pay for all miles, public or private, or you allow us to track your vehicle.

  13. The President’s Economic Advisers Suggest a Better Really Terrible Idea.

  14. I kept reading the article awaiting an explanation of how on earth you tax people based on miles driven without attaching a tracking device to our cars, yet it never came

    1. It’s a foregone conclusion that if the author stared’ such a thing, there would be massive rage expressed on these comments boards.

      1. Comments seem outraged enough at the utter stupidity of the glaring omission anyway. Whoops!

    2. Silly goose, more state employees need to be hired to read odometers and audit reports.

    3. If all you care about is raw miles driven you could go by the odometer reading. this would arguably be worse than the gas tax as it doesn’t take into account which state, etc you drove in, as they should be the ones getting the money.

      If you want a more careful computation, install a logging device in the car that receives signals from roadsite transmitters to determine where and when you are driving, and computes your road usage fee (but doesn’t transmit anything). The driver reports this fee month to month and it gets physically read and reset by the DMV once a year.

      1. For federal tax purposes, it doesn’t matter what state I drove in…a raw odometer reading, presumably scaled by GVW, would suffice. States might want to be more careful to get their cut, but I strongly suspect that the overall difference is a wash when you compare increasing the complexity and overhead of refining the tax to account for only the mileage in the state…

        Who wants to file a mileage tax in every state you drove you car in?

        Who wants to put a state-sanctioned GPS in you car to record all your travel?

        Toll roads as trackers of my travel are just as frightening to me.

        1. Tolls already sketch me out. I can choose to use a smart pass sparingly or not at all, but all tolls have cameras for enforcement purposes.

          I-540(?) in North Carolina has a graduated system where the toll is calculated for the distance driven, so they see where you get on, where you get off, and mail a bill to the address on file for the license plate.

          I’m 100% sure those records are being retained.

    4. Lots of states already require an annual inspection, one aspect of which is reading the odometer. This would be sufficient.

  15. “A gas tax is blind to the motorists’ choices and the externalities they impose on public roadways.”

    And a mileage tax, besides requiring universally adopted “technology” that tracks your location and/or uploads data from your odometer to the appropriate jurisdiction constantly, also ignores the externalities imposed on air quality by the less gas-efficient cars, if we’re talking about those.

    Regardless, Virginia had that dynamic tolling success story recently, and that still seems a way better solution than individual mileage tracking, and has the advantage of being practical right now, not in the dystopian cyber-future.

    1. I-66 inside the beltway is the perfect road for dynamic tolling — limited access, perpetually high traffic, no decent alternative routes due to the paucity of bridges across the Potomac (there is only one bridge north of the beltway and south of the WV state line, and one bridge south of the beltway and north of the Potomac’s mouth). There would be major technical problems doing it on city streets and cost efficiency problems doing it on rural roads.

    2. Doesn’t dynamic tolling, which I assume uses something our local Peach Pass electronic toll-assement and payment system, still track when my my vehicle on on the toll roads and require I equip my vehicle with government’s black box so they can track not only that my car was on mile X of the highway but also exactly WHEN it was there so that the correct toll is charged?

      No thanks.

      1. Dynamic tolling can still be paid in cash at a toll booth.

        1. Your car and license plate are still photographed to track down toll-skippers.

  16. Setting aside issues of congestion, pollution, etc., largely in urban areas, the biggest costs in building/maintaining roads are due to trucks. Something like 90% of the damage done to cross-country roads and highways is done by trucks. In this case, automobile drivers are subsidizing the trucking industry. If only automobiles used the roads, maintenance costs would be sharply – sharply! – lower. If there is to be an increase in transportation taxes, trucking is where it should be applied, particularly since a significant number of trucks seem to be loaded beyond legal limits where enforcement is lax. Everything I get that is delivered by truck somewhere along the way is subsidized by automobile drivers. A tax on the big rigs would spread the cost across all who benefit from their use including end customers like me. The wailing and knashing of teeth by truckers would fade away as they realized that competitors have the same issue. Perhaps rail, by far the most efficient way of moving goods long distances, would bloom. Cars don’t need the feet of bituminous, concrete and base needed to support 80,000 lb (and more!) trucks. Politicos haven’t helped by their increasing load limits beyond what roads, bridges and gas tax victims can bear.

    1. Trucks use a lot more gas than cars, so the gas tax handles that issue.

      Where the gas tax is unfair is with electric cars (though those are light enough they don’t do much damage) and even more so with hybrids. Though it would be kind of odd to subject them to extra taxes while also giving out tax breaks to their owners.

      1. You could register electric cars and charge based on weight and mileage. Any formula that doesn’t include the weight of the vehicle is bullshit.

        1. Agree. An annual odometer reading and GVW scale would be sufficient and fairly applied to all vehicles without being an insult to privacy like minute-by-minute GPS-based tracking of vehicles would be.

      2. “electric cars (though those are light enough they don’t do much damage”

        Sorry buddy, electric cars are HEAVY. Take the weight of the gasoline version of any vehicle, double it, and you are getting close to what the electric versions would weigh. Batteries are HEAVY.

  17. This law is stupid. Damage to roads goes up exponentially with weight of the car. A yaris that goes 100,000 miles is much less damaging than an f350. Raising taxes on gas makes a lot more sense.

    1. An F350 burns a lot more fuel, fairly well accounting for the differences in GVW. In driving 1000 highway miles, an F350 at 15MPG will burn 67 gallons, a yaris getting 35MPG over the same distance will burn 28.5 gallons. The F350 driver will pay about 2.5 times more in fuel taxes than the yaris driver (with a GVW about 3x).

      Pretty good proxy.

  18. Mileage fees sound great but are difficult to implement. Nobody wants the government tracking their mileage. Safeguards? Yeah, right! It’s if and not when the government will abuse the data they can mine from the data gathered. And how do you retrofit tens of millions of cars? Will the DMV refuse to renew your registration of license if you don’t submit to government surveillance? Sounds totally legit…and Constitutional. And who’ll pay for all the devices and ensure they’re turned on and nobody is cheating the system?

    Better solution? Private toll roads. The government can build the basic network but let private concerns build roads they can charge for and gain a profit. Competition, better roads, less delays, profit. Not sure how a libertarian could ever support mileage fees unless they hadn’t taken the time to study the privacy and implementation concerns.

    1. Sorry flyfish. Private toll roads are going to run afoul of our court system one way or another. Whether it’s anti trust regs, the commerce clause or some other hurdle, I can’t see it happening. Once upon a time in the Americas, what you suggest existed, and worse: travellers had to carry a variety of currencies to travel about, one toll road leading into the next. More interestingly, you are suggesting roads function like alot of our football stadiums? Taxpayers build it, but private entities get to swoop in to collect the profits? Taxpayer revolt.
      I know of only one government entity that can build anything: the seabees. They generally only get to ply their craft outside of the states, so contractors can help politicians launder money back into their campaign coffers. And breaking bond with campaign cash flows… oh, the humanity!

    2. A simple odometer reading once a year doesn’t require any of that and gives the necessary information for a straight mileage-based tax.

  19. Wow. Hiking gas taxes is exactly what not to do. We have a major collection of stupid strutting around DC. Look, the US can’t match cheap labor elsewhere, so what works? Well, our efficiencies are good, but primarily: cheap, abundant energy enjoyed here is the envy of the world. [Sorry California, self inflicted wounds by your states government have set you outside the regular US economy].
    As for the outrage of the public “not paying their fair share” at the pump on account of efficiency gains… let congress sue itself for continuing with the public threat to safety we know as CAFE standards, and let’s garnish their wages. Is it really that hard to repeal this politburo like hallucination posing as law? We can save a few thousand extra lives each year from the unnecessary highway deaths the legislation brings us as a bonus.

  20. We already have enough taxes, GEEZE! How much is enough with politicians?

  21. Last time I did the math, when I looked up the number of gallons of diesel and gasoline sold annually vs the amount of federal road/bridge funding, it was clear that doubling the gas tax would “fully-fund” the roads/bridge expenditures. As it stands the fuel taxes only cover about half the spending and the rest comes from general funds (income taxes and/or borrowed money). This is one area where it would be fairly easy to make users pay (almost) directly for the infrastructure instead of taking it out of everyone’s pockets.

  22. who the fuck wrote this. How is the government tracking your every move even more than they already do a good idea?

  23. “[T]he council outlined several problems with the current gas tax, from its failure to adequately charge more fuel-efficient vehicles for the wear and tear they cause on the roads…”

    Fine, add a surcharge at the point of sale for electric cars: figure what the total lifetime fuel usage would be for a non-electric vehicle in that same weight class, and collect the gas tax up front.

Comments are closed.