Today marks the 20th anniversary of the federal gas tax (h/t National Journal). Implemented in 1993, the tax adds 18.4 cents per gallon to your total cost at the pump, and the revenue is used to maintain federal roads and bridges. States levy their own gas taxes that add between 8 and 50 cents per gallon to fund local roads.But because the tax has no mechanism to account for inflation, revenues are falling below the increasing costs of road maintenance. The CBO projects that next year Congress will need to allocate $13 billion from the general treasury in order to keep the highway trust fund afloat. According to the Institute on Taxation and Economic Policy (ITEP), a non-partisan organization, the trust fund would be fully funded had the 1993 tax been indexed to inflation.There’s another problem for the gas tax going forward: it can’t account for the advent of hybrids, electric cars, and ever-increasing gas mileage. Drivers of high-mileage cars are freeloading on the gas-guzzlers, enjoying the luxury of well-maintained roads without paying their share of the costs.Richard A. Stafford, director of Carnegie Mellon University’s Traffic 21 initiative, tells VM, “The march of alternative ways to power vehicles (natural gas, natural gas liquids, electric) make any oil-based tax antiquated whether it’s on wholesale or retail and whether it’s indexed with inflation or not.” If that’s the case, we might want to replace the gas tax altogether with some kind of fee based on miles traveled – though we can see how implementing such a policy could get hairy.No politician wants advocate for higher taxes, let alone create a new tax altogether, especially in this economic climate. But the bottom line is that everyone driving today is paying less for road maintenance than the cost of upkeep. At some point in the near future these costs will increase. When that day of reckoning comes, telework is going to look better than ever.[Gas sign image courtesy of Shutterstock]
Does the Gas Tax Have a Future?