As you may have noticed when filling your tank, the plan for a gas tax holiday put forward by presidential candidates from both party brands, never came to fruition. The idea had been suspend an 18¢ per gallon federal tax on fuel from Memorial Day to Labor Day. Of course the fact that this would have saved average drivers a whopping $28 had little if anything to do with the lack of movement on bills from both Democratic Sen. Hillary Clinton and Republican Sen. John McCain. It turns out the real coup de grâce may have come from the road construction industry. The excise tax money which would have meant little to individual drivers, comes out to an aggregate $9 billion. That's money that is supposed to go toward building and maintaining roads around the country. Without that money, road construction projects would have to be put off. Canceled or delay construction projects would mean laid off construction workers, a prospect that no politician hoping to get re-elected relishes in an election year.
Rather than a tax holiday, drivers are in fact likely to see an increase soon. While high fuel prices have the benefit of pushing people to drive less, and consume less fuel, that starves the highway trust fund as well. As a result the fund is likely to be in deficit this year to the tune of $3 billion. As a result a fuel tax increase may be needed.

Looking ahead, we may need to start taxing electric bills to get funds to build roads. Even though electric cars use no petroleum, they still put wear and tear on the roads and it's only far that the drivers who use those roads should pick up the tab. Alternatively increased use of toll roads may be necessary, something proposed by Transportation Secretary Mary Peters.

[Source: Detroit News]


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