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Who Wants a Big Gas Tax Hike?

Some people are pushing Trump to fund his infrastructure dreams with a 140 percent increase in the federal gas tax.

Gas moneyChristian Delbert/Dreamstime.comAs the Trump administration prepares its plan on how to deliver the $1 trillion infrastructure investment that it keeps promising, some voices are calling for a steep hike in the federal gas tax.

On Thursday the Chamber of Commerce unveiled its set of infrastructure policy priorities. It included a whopping 140 percent increase in the federal gas tax, from 18.4 cents per gallon to 43.4 cents per gallon. The Chamber estimates that this will bring in an additional $394 billion in revenue over the next decade.

"It's the simplest, fairest, and most effective way to raise the money we need for roads, bridges, and transit," the group's president, Tom Donahue, said in a speech yesterday. "Our leaders need to stop hiding behind the fallacy that this can't be done and just go do it."

Long been a priority of American businesses interests, a higher gas tax has also attracted a good deal of center-left support. The New York Times editorial board has endorsed an increase. So have the ranking Democratic members of the House and Senate Committees dealing with infrastructure spending. Donald Trump himself has expressed his openness to the idea.

The federal gas tax was last raised in 1993. Proponents claim that failing to increase it has left the roads crumbling and the Highway Trust Fund underfunded.

They're wrong, says Baruch Feigenbaum, a transportation policy expert at the Reason Foundation (the nonprofit that publishes this website). The quality of road infrastructure "often has to do more with management and priorities rather than it does with funding," Feigenbaum says.

On the state level, he notes, there is little correlation between high gas taxes and high-quality, well-maintained roads.

That is most obvious in the state of California, which has both high gas taxes and terrible roads. Bureau of Transportation Statistics data from 2013 found that only about 15 percent of the state's highways were in good condition, as measured by the International Roughness Index; a full 40 percent were in poor condition. Meanwhile, California was levying 48.7 cents in taxes on every gallon of gas sold in the state.

Georgia, by comparison, was adding only 28.5 cents in taxes to every gallon of gas in 2013, and yet it was able to keep 54 percent of its roads in good condition. Only 12 percent were in poor condition.

Georgia "has very good roads of high quality because that is where they spend their resources," Feigenbaum says. "California has crappy roads because they spend their money somewhere else." California's latest gas tax hike saw hundreds of millions of dollars siphoned off to pay for high-speed rail, local transit, and recreational trails.

The federal Highway Trust Fund—where the gas tax is deposited—has a similar problem of spending on local transit and other non-road-related projects, undercutting the argument that it is simply a user fee paid by drivers.

Some 15 percent of the federal gas tax is deposited straight into the Highway Trust Fund's Mass Transit Account, which disburses money for local bus, light rail, and other mass transit services. Another $850 million or so of the trust fund is diverted to the Transportation Alternatives Fund, which goes to beautifying streets and building recreational trails.

"Do you really want to increase taxes when you have this waste going on?" Feigenbaum asks.

On top of this, continual improvements in fuel efficiency and the potential growth in electric vehicles are making the gas tax an increasingly obsolete way to fund and finance new infrastructure improvements.

"I like to describe it as a rock star on their farewell tour," he says. "It's getting old, it's not going to be around forever, and we have to come up with a solution." Feigenbaum suggests that Congress make greater use mileage-based user fees, and that it rely more on the private sector for infrastructure improvements.

Trump's infrastructure plan will reportedly rely on $200 billion in direct government funding to attract another $800 billion in private capital. That $200 billion will have to come from somewhere. Congress can listen to people like Feigenbaum, or it can compel Americans to shell out a lot more when they fill up their tanks.

Photo Credit: Christian Delbert/Dreamstime.com

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  • loveconstitution1789||

    "Proponents claim that failing to increase it has left the roads crumbling and the Highway Trust Fund underfunded."

    Anyone with a brain can easily claim that government is spending tax revenue from the general fund like crazy even though postal roads are one of the few enumerated powers of the government unlike social security, medicare, ObamaCare, etc etc.

  • Rockabilly||

    What !

    Only a 140 percent increase in the federal gas tax?

    Make it like 298% !!!

  • esteve7||

    or how about gas taxes go to the FUCKING ROADS and not to subsidize your shit public transportation. In the bay area only a third of gas tax money is actually for roads, the rest is to subsidize busses, bart, light rail, etc. If you actually used the money for roads instead of stealing it for your progressive crap there wouldn't be a need to raise the gas tax.

    Oh but that's exactly what they want. How long until they steal that increase for something else then go bitching about how they need to raise the gas tax? These people can fuck off.

  • ipatrol||

    Spending on public transit massively reduces impact on roads by reducing people's need to use them. In fact, I recall a study said that no matter how much you spend on roads, the primary determinant in how long a trip over them takes, is how long the same trip takes via mass transit. Otherwise the induced demand effect just keeps absorbing any capacity increases away.

  • Greg F||

    Spending on public transit massively reduces impact on roads by reducing people's need to use them.


    I am going to call BS on this one.

  • 2whlrider||

    Buses are mass transit, and the most efficient mass transit for most people, and they use roads. I don't see any reason to subsidize mass transit with tax money.

  • mpercy||

    Mass transit only helps get traffic off the road when it actually connects places people live to places where people work. In a few places, like NYC, the system is dense enough and common enough that it can work fairly well.

    In many other places, mass-transit is slow smelly buses driving on the same congested roads as the rest of the traffic, which tend to be used only be a paucity of low-income riders rather than hordes of commuters happy to leave the driving to someone else.

  • shawn_dude||

    Just a nit: the original comment mentioned the San Francisco Bay Area specifically. The SF Metro is effectively the same as your NYC example.

    I'm not a fan of buses. Having said that, two points 1) in your "other places," the spending priorities are to roads because, as you point out, only the poor use public transit. 2) A bus with 50 people on their daily commute is replacing something like 45 cars. So, unless the bus is 45 times more destructive to the road per mile, it's still comes out ahead.

    Full disclosure: I live in SF. I ride public transit. I hate it for a long list of reasons. But, parking is such a huge issue that transit is worth it.

  • TxJack 112||

    What about areas where public transportation is not available or viable? Texas is a very large state and the majority of it lacks public transportation because it is not feasible. However, we have extremely good roads which are always being improved. The problem is states like California use taxes to impose a political ideology on citizens rather than actually address problems. If states want to increase gas taxes let them, but stop the push for everything being done at a "national level".

  • shawn_dude||

    Texas spends on the roads for exactly the reason you state: very low density in most of the state.

    However, your strawman version of California doesn't hold up. Remember that California is far more dense in more places than Texas. It has a history of some of the most polluted air in the country due to extremely high volume of automobiles. (I recall the LA air being nearly always a foggy orange through my childhood.) So for California, taxing the pollution-producers to fund alternatives that add less pollution makes good economic sense. (Pollution externalities aren't cost-free.) One of the most polluted areas in the country right now is the central valley agricultural corridor in California--the same place they're building a bullet train to connect LA to San Francisco and Sacramento in the hopes fewer people will drive the I-5 Grapevine.

    The national gas tax would be used for federal projects. When you consider the GDP value of interstate commerce, it might make financial sense to target federal dollars towards some select transportation infrastructure improvements.

  • libertynugget||

    Roughly $3,300,000,000,000 in government revenue in 2017...
    Still not enough money.

    GDP 2017
    5. UK 2,496.757 Billion
    6. India 2,454.458 Billion
    7. France 2,420.440 Billion
    8. Brazil 2,140.940 Billion

    Something is fukt!

  • Elias Fakaname||

    Four out of four of those countries are socialist shitholes.

  • Johnimo||

    C'mon! UK at least had the sense to withdraw from the EU. That's REAL progress.

  • shawn_dude||

    Zero of those countries are actually socialist. They're all capitalist.

    I thought the talking points said we had to use "shithouse" now...

  • Elias Fakaname||

    socialist. However, on balance they are socialist countries. They have little to nothing in the way of unregulated free markets. Peoples lives are also largely managed cradle to grave at great detriment to their citizens. These countries are not really capitalist, at least not very much.

  • Bubba Jones||

    States do the real work on roads. They can raise taxes if they need it.

  • ||

    States might do do the real work on roads but they depend on federal funding to do it. And not just for those roads in the interstate and federal highway systems which are funded with about 90% federal money but also for other qualifying state roads. The only roads than do not qualify are toll roads; although increasingly separate toll lanes are being permitted on interstates but only the free lanes get fed funding.

    Like many other things federal aid has allowed states to give their citizens a bunch of "free" stuff without the pain of taxing them for it.

  • Gilbert Martin||

    "States might do do the real work on roads but they depend on federal funding to do it"

    Federal funding?

    There is no such thing as "federal funding" There is only taxpayer funding.

    Those federal gas taxes are paid for by drivers in all the states to begin with.

  • ||

    Pedantic asshole, by federal funding, of course, I mean through taxes collected by the federal government rather than through taxes collected by state or local governments.

    It makes a difference. By taking money from the federal government state politicians get to pretend that the free stuff they're giving to their citizens is being paid for by someone other than by citizens of their own states.

  • ||

    It may not matter where the revenue is coming from but where people perceive the money is coming from does.

  • Gilbert Martin||

    The people are smart enough to know they are paying both federal and state gas taxes when they fill up at the pump and that they are paying for that "free" federal stuff just as much as they are the state stuff.

  • Jayburd||

    There is no such thing as "taxpayer funding". There are just bribes and blackmail.

  • Migrant Log Chipper||

    Translation: Increase must be high enough to grease the palms of both teams cronies. Add 50% for endless EIS's and NIMBY lawsuits.

  • Migrant Log Chipper||

    Translation: Increase must be high enough to grease the palms of both teams cronies. Add 50% for endless EIS's and NIMBY lawsuits.

  • Migrant Log Chipper||

    Also must bribe skwerlz or nothing will happen.

  • Jerryskids||

    Georgia, by comparison, was adding only 28.5 cents in taxes to every gallon of gas in 2013, and yet it was able to keep 54 percent of its roads in good condition. Only 12 percent were in poor condition.

    I don't know how it happened, but the gas tax here in Georgia goes straight to the DOT and they don't want to hear any crap about mass transit and hiking trails and fiber optics for telecommuting counting as transportation infrastructure spending. Asphalt, that's where the gas tax goes. The state collects the general sales tax on top of the motor fuels tax so they get their cut of the loot and that keeps their mitts out of the cookie jar. (But they still always whine about the mass transit bullshit about how everybody supports more mass transit and that makes mass transit funding a wonderful idea. No, you dumb shits, everybody supports mass transit *for everybody else*, not a damn one of them personally has any interest in riding a bus like a damn schlub.)

  • Gilbert Martin||

    "I don't know how it happened, but the gas tax here in Georgia goes straight to the DOT and they don't want to hear any crap about mass transit and hiking trails and fiber optics for telecommuting counting as transportation infrastructure spending. Asphalt, that's where the gas tax goes"

    Which is just how it should be in every state.

  • mpercy||

    Also, in Atlanta, one of the biggest road projects in recent years was funded by tolls. GA400, a major route connecting the northern subburbs to downtown ATL was paid for by a $0.50 per car per trip toll. By law, the toll was to be terminated when the project was paid off. Politicians tried to keep the toll to fund pet projects, but were cut off by the courts. A voter referendum did permit extension of the tolls to complete some upgrades to the GA400 corridor, and when those were paid off, the tool booths were closed for good.

  • shawn_dude||

    How many homes and businesses were torn down using imminent domain as part of that toll road project?

    Confiscating private property for the good of the whole is something to brag about? I'm guessing you're not libertarian. (I'm not any longer, so I won't hold it against you, but taking private property for the community's gain is what people around here erroneously call "socialism.")

  • Fuck you, Shikha (Nunya)||

    Where's renewableguy saying how great this is for EVs? Obviously as many people as possible would switch to full or mostly electric. Of course the windfall legislators are chomping for here will be disappointed and then again blame the rich because the poor among us that can't afford the switch to EVs are left with cars they can't afford to fuel. Cue the Republicans are to blame for EVs chants.

  • Sevo||

    "Where's renewableguy saying how great this is for EVs?"
    Strangely, as 'things have changed', we also lost "Jackandace".
    Perhaps reality has knocked on thick skulls and made a difference. But Stormy Dragon has been trying to prove stupidity is still here and not limited to Tony and turd: http://reason.com/blog/2018/01.....tr#comment (6:37PM)

  • shawn_dude||

    Your strawman needs more straw.

  • NoVaNick||

    Hiking the gas tax would be a great way to guarantee the survival of the internal combustion engine and kill off EVs, which the econuts want to kill. You see, once the government gets hooked on a revenue source, it will do everything to keep it, and block any serious competition (see tobacco taxes).

  • PTSD||

    Comparing California to Georgia likely isn't apples to apples. One serious consideration in road maintenance is maintaining traffic flows during long periods of construction, and I'm guessing that in high population/traffic areas, which California has more of, it is much more difficult to close roads in order to do the required maintenance. As a result, they probably rely much more on quick fixes that are less disruptive. But this is just a guess.

  • Wanderer||

    Trump was elected by countryfolks and suburbanites, not by dwellers of downtowns or ghettos.

    A tax on car gas is a tax on his constituency. Trump is no idiot, this won't happen.

  • Elias Fakaname||

    My thoughts exactly. I'm not sure why anyone would bother to write such an article. It's not like Obama is still president.

  • shawn_dude||

    Insightful! (though likely wrong.)

    Trump flipflops faster than Ted Cruz on a tanning bed. He doesn't appear to put a lot of thought into what he says, even to whether he's being consistent in what he says.

    The gas tax will impact people in high-tax states far more and put downward pressure on those state budgets (like California.) It's a way for Trump to punish the states who didn't vote for him. (See: the recent tax cut bill that siphons money from rich states with high property values to poor states with dirt poor property values.)

  • Mark22||

    Given our lopsided tax system, if you're going to raise taxes, consumption taxes are preferable to income taxes.

  • uunderstand||

    But with vaccines, how many people have consumption these days?

  • Johnimo||

    Nice pun. You made my afternoon! I still feel for Doc Holiday.

  • Mark22||

    The TB vaccine merely reduces lethality in children and it complicates diagnosis, so, all things being equal, it probably leads to more TB. That's why it's not used in the US.

  • Rob5||

    I'd support a gas tax hike in exchange for repeal of the CAFE standards.

    Stop making auto manufacturers go through ridiculous gymnastics to create a higher fleet mpg, and just admit that the gas tax hike is meant to reduce consumption, i.e. increase mpg.

    Ergo, it won't be a giant income stream for this and that pet transpo project. But it's simpler than CAFE: the market would force increased mpg, and maybe even car pooling. Libs and Cons should love it!

  • Devastator||

    Take a trip to mumbai for a while and then come back and talk about reducing CAFE standards. Do you currently smoke 3 packs of cigarettes a day? Because that's the air quality you're looking at.

  • Mark22||

    CAFE standards are about fuel consumption, not emissions.

  • shawn_dude||

    Fuel consumption is only a problem because of the emissions. Otherwise, we wouldn't give a hoot.

  • Devastator||

    If you want better roads and your primary way of paying for them is through taxes, then raise taxes AND quit siphoning the taxes off for non-road related projects. It's simple. Politicians will make it complex but it really is a simple equation. If you want shitty roads then don't. If you want private help then be prepared to pay a toll to drive to the store to grab some milk and box of cereal.

  • Johnimo||

    What if I want chicken tenders and ketchup?

  • shawn_dude||

    Vote for better politicians. As long as we keep giving those seats to greedy meatheads, we're going to continue to have greedy meatheads running the show.

  • SimonP||

    I love how libertarians lose their collective shit when anyone starts coming for the massive public subsidy we call our "roads." No public subsidy for mass transit! But let's instead double-down on the public subsidies we have for free parking and free roads. No cognitive dissonance whatsoever.

  • ||

    As this whole article has explained, roads are paid for with taxes collected at point of sale on gasoline used for motor fuel. Hence only people who use roads pay for roads. Want to avoid paying for roads, don't drive a car.

    But, as the article points out, some of the taxes collected for paying for roads gets diverted to pay for mass transit. thus people who drive cars are also subsidizing people who ride busses etc.

    Now, as I have pointed out before at this site, gas taxes are a poor proxy for actual fees for road use but they do tend to work and make it so that only road users acually pay for what they get.

    Now if only there was a way to get people who ride trains and busses to pay for their rides....

  • SimonP||

    As this whole article has explained, roads are paid for with taxes collected at point of sale on gasoline used for motor fuel.

    The article doesn't "explain" this, largely because it simply isn't true. Gas taxes do go into road construction. But they're not enough to pay for all construction and maintenance costs. Virtually every municipality makes up the difference through general revenue.

    But, as the article points out, some of the taxes collected for paying for roads gets diverted to pay for mass transit. thus people who drive cars are also subsidizing people who ride busses etc.

    More accurately, all modes of transportation are subsidized through sales and income taxes. Drivers (and, apparently, libertarians who drive) have convinced themselves that they somehow carry their own weight. They don't.

    Now, as I have pointed out before at this site, gas taxes are a poor proxy for actual fees for road use but they do tend to work and make it so that only road users acually pay for what they get.

    It's funny that you opt for command-and-control solutions - still charge a tax, just a different one gauged by government estimates of what's needed - instead of a more straightforwardly libertarian solution, which is to simply privatize all our roads and see what those private operators charge to use them.

    Any reason you're not interested in that option, buddy?

  • shawn_dude||

    We're leaving out auto registration fees which also go to paying for roads (theoretically.) And it's worth noting that the average passenger sedan pays far more per pound than a 10 ton cargo rig even though the rig does more damage to the roadways. (So yes, your household family minivan is subsidizing the trucking industry.)

    I'm not for privatizing roads. I'm also not libertarian.

  • mpercy||

    One thing, mass-transit is a local issue, and not one where federal expenditures are warranted. The Interstate highway system, as a post road and military infrastructure, is at least justifiable as Constitutional. And funding by user fees, albeit proxy user fees in the form of fuel taxes, is less offensive than general taxation to build roads.

  • SimonP||

    One thing, mass-transit is a local issue, and not one where federal expenditures are warranted. The Interstate highway system, as a post road and military infrastructure, is at least justifiable as Constitutional.

    So how do you feel about the billions of federal dollars used to expand capacity for what are, in fact, just suburban transit corridors? Constitutional?

    Take care with how you answer. You might find yourself in Wickard and Raich territory.

    And funding by user fees, albeit proxy user fees in the form of fuel taxes, is less offensive than general taxation to build roads.

    Well, since we actually do both...

  • buybuydandavis||

    Another subsidy to the ruling class Gaia worshipers and their electric cars

  • mpercy||

    Last time I checked, annual Federal spending on highway spending is about $40B.

    The US consumes about 140.4 billion gallons of gasoline and 36.3 billion gallons of diesel while driving. The current fuel taxes are 18.4 cents per gallon of gasoline and 24.4 cents per gallon of diesel.

    Gasoline taxes yield $25.833B annually while diesel taxes are $8.857B, totaling $34.7B.

    So fuel taxes do not currently even pay for the current spending, falling about $6B short.

    As these fuel taxes are a fairly close proxy for direct road use fees--the more you drive, the heavier your vehicle (i.e., more damaging to the road), the more you pay.

    If (IF) federal highway (Interstate highways) and related infrastructure (bridges) need to be funded--and there are calls for spending about $100B per year for a few years--I think raising the fuel tax is the best way to fund it. But don't go using federal fuel taxes to fund subway improvements in NYC or California high-speed boondoggle, or the Atlanta Streetcar, etc. States and cities can fund their own local improvements.

  • Greg F||

    Gasoline taxes yield $25.833B annually while diesel taxes are $8.857B, totaling $34.7B

    There is also a tax on heavy use trucks and tires.
    Federal Highway Trust Fund Receipts 2015.

    In 2016 the revenues were $41,343,613,000 of which $5,161,713,000 was diverted to mass transit.

  • Greg F||

    That should be 2015 ... not 2016.

  • TxJack 112||

    If higher taxes are the answer to all problems, why do states with the highest taxes have the worst roads, highest unemployment, most crime and the highest levels of debt?

  • Elias Fakaname||

    They're run by democrats.

  • ||

    Of all forms of taxation we have, the gasoline tax is the most libertarian in my view. It's broad-based, it's collected for a very specific public purpose (road maintenance), and it's avoidable/minimizable (bike, walk, EV, high-MPG car, mass-transit).

  • Fanglemeister||

    They should have pinned the '93 gas tax to inflation, $0.184 back in '93 is right around $0.30 in today's funny money. (The national average state fuel tax is now $0.305). Now, regarding using road taxes for railways, I can see both sides of the coin, and must concede that building light railways for commuter use does help lighten the load on our major highways; commuter rail, when used, decreases commute times (more time- and fuel-efficient), and increases the lifespan of our roads and bridges (via the decreased traffic). Whether or not taking 18% of highway funds for rail use decreases road wear and maintenance costs by 18% is hard to prove, granted. And finally, under no circumstances should road taxes ever be used to subsidize low fares on said passenger lines! Once built, railways and bus lines must pay their own way through their own user fees.

  • the_strickler||

    This is a trick. They are trying to lure Trump into making a political mistake. His supporters will hate a gas tax increase.

  • shawn_dude||

    It depends. If the money is spent to put a lot of blue-collar white guys back to work, and buy a lot of Made in the USA steel and other items, then it would boost the economy in predictable areas and potentially net out in his favor. While, I add, simultaneously making driving more expensive in high-tax states like California and thus increasing the likelihood that some areas will go Red in the next election.

  • Wachaza||

    Great, another fund for Trump's wall project.

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