Oh, the gas tax, always a contentious issue. We've covered it throughout the years but now the Congressional Budget Office is reminding us that the time has come to move well beyond simple discussion and politics: the Highway Trust Fund is not getting enough money to pay for the transportation infrastructure that America needs.

As you can see in the chart above, the Fund has not taken in more money than it spent since 2001, except for one time in 2006. In 2008, 2009 and 2010, the Highway Fund got money from the General Fund to pay for things like highway repairs and various mass transit programs.

Since the Highway Trust Fund is mostly paid for by the gas tax, that number plays a big roll in how much money America has to build bridges. Before we move on, though, it's time for a question: What was the last year the U.S. gas tax was raised? The answer and more can be found below.
The correct answer? 1993, which means it's been almost 20 years since the gas tax was pegged at 18.4 cents per gallon. An even bigger problem is that it is a set rate, not a percentage or in any way indexed for inflation, so the absolute value of the money collected has only dropped since 1993.

This week, the CBO issued a new report that looked at how the upcoming, higher CAFE fuel economy rules will affect the Highway Trust Fund. The short answer? Between 2012 and 2022, the Fund will see revenues that are $57 billion lower than they would be without the new CAFE rules. The slightly longer answer:

The proposed CAFE standards eventually would cause a significant reduction in in fuel consumption by light-duty vehicles. That decrease in fuel consumption would result in a proportionate drop in gasoline tax receipts: CBO estimates that the proposed CAFE standards would gradually lower gasoline tax revenues, eventually causing them to fall by 21 percent. That full effect would not be realized until 2040 because the standards would gradually increase in stringency (only reaching their maximum level in 2025) and because the vehicle fleet changes slowly as older vehicles are replaced with new ones.

To illustrate the effect that the standards would eventually have on the trust fund's cash flows (in 2040 and beyond), CBO examined how a 21 percent reduction in gasoline tax collections would alter the agency's current budget projections for the trust fund, which span the period from 2012 through 2022. CBO estimates that such a decrease would result in a $57 billion drop in revenues credited to the fund over those 11 years, a 13 percent reduction in the total receipts credited to the fund.

The CBO suggests three ways to deal with the shortfalls: do nothing (i.e., keep on transferring money from the general fund), spend less on highways and mass transit or raise the gas tax (or other taxes and direct them to the Fund). An increase to the gas tax wouldn't have to be huge. Just five cents a gallon would be enough to offset the $57 billion, the CBO says. But until Congress can agree on this simple change, there's always the voluntary gas tax.



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    • 1 Second Ago
  • 82 Comments
      robespierex
      • 2 Years Ago
      We have high unemployment, and infrastructure that would need bazillions of jobs to fix. Heaven help us if we can't figure our way out of this one.
      Lunch
      • 2 Years Ago
      Nobody likes paying more in taxes, but in this case, it's something we have to pay. Oh well.
      Chris
      • 2 Years Ago
      Geesh, let it reset on a 20 year basis to follow BLS inflation statistics. Using their metrics, $.183 in 1993 will be worth $.314 in 2013. Let it reset next year, BUT ONLY IF that money stays in the transportation fund coffers, to actually better the condition of our roads, highways, bridges, and to make travel more efficient (time spent, energy consumption, and practical enhancements). Of course, BLS statistics are extremely low for inflation, but at least it would be something to help fix the deplorable condition of some of our interstates!
      AZTrafEng
      • 2 Years Ago
      As vehicles become more efficient this actually makes it so that we spend less per mile on our infrastructure than ever before. Raising the gas tax with fuel economy standards makes sense, but people bitch and moan so much about a permanent five cent hike it hasn't been passed in a long time. Why they didn't try to pass it during one of the low price periods is beyond me. Diesel fuel taxes are usually higher because the fuel is primarily used for trucking. Since trucking is truly what degrades our roads and highways, just ask a pavement engineer who only cares about that 5-10% of traffic which are heavy vehicles, the gas tax is helping to offset the transportation costs which would be absorbed by companies if the tax was passed off to trucking companies via diesel fuel. Don't get me wrong, new infrastructure is paid for too with the taxes, and cars use that infrastructure, but it would last a lot longer and could be built for a lot cheaper if we were designing for vehicles that that have axle loads of 1/10 what a heavy vehicle can develop, especially bridges! Am I the only one who thinks America really needs to seriously invest in a significant heavy rail network?
        suthrn2nr
        • 2 Years Ago
        @AZTrafEng
        becuase regardless of good or bad economy, anti-tax proponents will always say that adding taxes will destroy the economy. Having said that, it's no secret that our tax dollars are not always spent wisely so we pay more than we should, and the losers are the middle class that support a healthy economy.
        mylexicon
        • 2 Years Ago
        @AZTrafEng
        We already charge additional road-use tax for heavy vehicles, and we nickel and dime them on everything from registration to toll booths, all to make up the additional damage they do to the roadways. Doesn't matter anyway, cause most of the damage in the south is actually done by water and heat cycling, and in the north the damage is done by snow plowing.
      GasMan
      • 2 Years Ago
      I support raising the federal gas tax but I understand that is politically difficult. One thing that could help would be to get federal dollars out of state projects. That money is supposed to go to facilitate INTERSTATE commerce but has become a slush fund for local projects. Why was there federal dollars in the Boston Big Dig for example? Why should tax dollars from Topekans be making life easier for Bostonians? Let the states justify and pay for their own infrastructure. States rights and all that.
      Xedicon
      • 2 Years Ago
      I absolutely would pay an increase in gas tax for better roads. I love to drive and I use roads everyday, and I want them to be pretty and wonderful. Better roads are also safer roads, and that's always a good thing. Like most people looking at how much of my income I pay in taxes makes me want to go into a rage, especially when you read about the disastrous spending results of fighter planes that don't work and the GSA spending almost 1 million dollars on an "awards" ceremony, etc... But I love roads and want good ones. Sign me up!
      Greg
      • 2 Years Ago
      A bigger factor is that people have been driving less during the economic downturn. I do believe that the gas tax should be indexed to something, such as inflation of construction costs. I have no problem raising it a penny a year for the next five years. If a person drives 12k mi/yr with a 25 mpg car, each penny increase in the tax costs them $4.80 / yr. Considering how much gas prices fluctuate, no one would even notice that the tax went up. And it would be enough for much-needed repair and maintenance. I don't like paying more in taxes, but I don't mind paying for what I need.
        montoym
        • 2 Years Ago
        @Greg
        While it's nice to want to increase the tax slowly, that's just simply not going to cut it. A dollar in 1993 isn't the same as a dollar now. Just purely account for inflation, $1.00 in 1993 is the same as $1.49 now (actually 2010 dollars, the latest available). So, if you want to increase the gas tax just to make it equal to what it was in 1993, you'd need to increase that $0.184 by the same amount. Multiplying $0.184 by 1.49 gives us $0.274. That's an increase of just over 9 cents which would take 9yrs to get to if we did it your way. Not to mention that by then, we'd need to adjust it further since our figures would be out of date again. So, just for equivalent value, we'd need the tax to be about 27 cents/gal. This doesn't even go into the fact that the tax revenue has decreased due to vehicles getting better mileage and also decreased driving of late (the economic downturn has us all driving less on average than we did before). So, raising it to 27cents/gal. may not be enough either. Unfortunately, it's not as simple as 1cent/yr.
      • 2 Years Ago
      [blocked]
      benzaholic
      • 2 Years Ago
      My first questions: Are all of the gas taxes going to the Highway Trust Fund? Are any other projects or accounts spending that Highway Trust Fund money? Let's first start by ensuring that gas taxes are going exclusively toward the expenses they were claimed to address. This may already be the case, but I've learned to ask the question.
        lne937s
        • 2 Years Ago
        @benzaholic
        The federal government already spends far more on highways than what it gets from gas taxes, it just comes out of general revenue.
      • 2 Years Ago
      [blocked]
        MONTEGOD7SS
        • 2 Years Ago
        Bravo my friend. Perfectly worded and I agree 100%. While I am by no means a neo-con, the leftist enviro nazis never look past the end of their own noses at the possible ramifications for the emotional moves they make.
        S.
        • 2 Years Ago
        You don't sound like much of a libertarian to me...
        CanIGetAWhatWhat
        • 2 Years Ago
        Just for the record, forcing anyone to pay a tax just to be able to own a car, or anything for that matter, is so totally not libertarian. So you say that (assuming you're not being facetious) as an "enviro-nazi" disliker, not as a libertarian.
          montoym
          • 2 Years Ago
          @CanIGetAWhatWhat
          Agreed, if he's a libertarian, he greatly misunderstands what it means.
      Car Guy
      • 2 Years Ago
      So people will pay more for cars because of the fuel efficient technology required to meet CAFE (the government estimates $3000 and the industry $5000+) AND even higher fuel prices because the government will need to raise the fuel tax. Yet another lose-lose for the American people when the jackwads in Washington try to make our lives better.
        lne937s
        • 2 Years Ago
        @Car Guy
        We will pay less in oil subsidies. We will pay less for military operations in oil regions We will pay less for pollution-related diseases That will more than offset the lost gas tax revenue.
          lne937s
          • 2 Years Ago
          @lne937s
          If you all choose to believe that oil companies do not benefit from special tax breaks and other direct and indirect subsidies, please do not stand in the way of legislators trying to remove all of those many pages of tax code and govrnment spending provisions which you think do nothing. You can either try to justify oil subsidies or claim that they don't exist, but you can't have it both ways.
          Car Guy
          • 2 Years Ago
          @lne937s
          Hey genus 1) 85% of oil comes from north America. 2) If you got rid of subsidies that's only 4 billion. 3) pollution related diseases? Last time I checked busses and trains pumped out a hell of a lot of emissions. It does offset some but little. Trot your old, tired, arguments back into the barn.
          Scr
          • 2 Years Ago
          @lne937s
          There is no such thing as an oil subsidy.This is another piece of the anit-energy green lobby. Oil comapnies recieve the standard tax reductions for investment and R&D just like any other company cen, and in fact, get MUCH less of a break than any other industry. For all industries, it is meant to help offset the huge initial investment in technlogy and to take risks on developing a valuable resource. In this case, the massive expense of exploration. The oil and gas industry also pays collossal amounts of revenue taxes every year, which you never hear about, at the current 35% tax rate, which is the highest business tax rate in the entire industrilaized world. And we wonder why there is is so much unemployment and lack of investment in this country?
        oRenj9
        • 2 Years Ago
        @Car Guy
        That equipment would all be there now, federal regulation or otherwise. People are demanding higher fuel economy, as such, they are flocking to vehicles that give them that. Plus, federal regulations are moot because California regulations define the U.S. (and world) automotive market. There are a few companies that offer California Emissions Compliance as a no-cost option, but for the most part, the cost of offering the option is more expensive than just having it standard, because more and more states are beginning to adopt CARB emissions standards for their states as well.
      Car Guy
      • 2 Years Ago
      They should put a stupid tax on the occutard protestors and make them pay for all the overtime being wasted on police and sanitation to clean their messes.
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