The federal gas tax, which amounts to about 18.4 cents a gallon, is set to expire and it needs a special act of Congress to be renewed. The tax was created to fund the Federal Highway Administration and to maintain the inter-state highway network created during the 1950s and 60s. Some republicans, led by Americans for Tax Reform President Grover Norquist and voiced by a Washington Times editorial, believe that the tax needs to die. Most of it, they say, is used not for maintaining, but for replacing the highway system with mass transit networks.
Out of the $29 billion in fuel-tax revenue collected this year, the Congressional Budget Office estimated $7.6 billion would be diverted into mass-transit projects. That is only part of the problem. One look at the Federal Highway Administration’s budget shows core spending priorities in the “highway” account frequently have nothing to do with highways. For example, the agency allocates $6.8 billion to a “livable communities” program designed to promote a leftist anything-but-the-automobile agenda. Another $8.9 billion will be blown on “environmental sustainability” schemes, and $2.5 billion will go to safety – that’s the code word for paying local cops overtime to set up speed traps and East German-style roadblocks.
The democrats’ opinion, reflected in a New York Times editorial, is that the tax needs to be increased as a type of stimulus package and as a disincentive to driving gas guzzling cars. A secondary message is that the US should adopt a European-style taxation scheme of gasoline and a new balance between public and private transportation:
If anything, the tax should rise to maintain a system that constantly needs upkeep — the backlog of bridges needing repair is estimated at $72 billion — to create jobs, and to encourage drivers to buy more fuel-efficient cars.
Excise taxes on motor fuels account for nearly nine-tenths of the $37 billion trust fund. The fund has lately required annual infusions from the Treasury Department to break even, and its obligations are growing. The gas tax has not increased since 1993, and its buying power, accounting for inflation, is now only 11 cents. Meanwhile, Americans are driving many more miles, placing greater stresses on the highway system.
When state taxes are added in, Americans pay, on average, about 43 cents per gallon in taxes — or about one-eighth the total price at the pump. That’s still a bargain compared with other industrial countries. Across Europe, drivers pay twice what Americans do at the pump — and well over half of that is taxes. In Britain, the tax bite is more than $4 a gallon, or 10 times what Americans pay.
So, where do you stand? Should the tax be increased or completely abandoned?