By Martin Wachs
Martin Wachs is Director of Transportation, Space and Technology Program at the Rand Corp., a nonprofit research institution.
A proposed 15-cents-a-gallon gas tax is worth a second look. Among various painful options put forward in the Deficit Reduction Commission’s draft report, this tax hike may be well justified.
Since Oregon introduced motor fuel taxes in 1918, taxes on gasoline and diesel have paid for highway construction. During the last 30 years these taxes also funded public transit. For decades truckers and auto clubs enthusiastically supported gas taxes to build and fix roads. As with tolls, those who drive the most end up paying the most in fuel taxes and directly benefit from improved highways. Gas taxes have been deemed the fairest way to put the heaviest burden on users, rather than on the general public through income or sales taxes.
The problem is that the current federal tax on gasoline of 18.4 cents a gallon has not been raised since 1993, though the dollar’s purchasing power has fallen by one third. As cars and trucks became more fuel-efficient, fuel tax revenue per mile has fallen. Add inflation, and federal fuel taxes can no longer cover federal highway programs.
Federal Highway Trust Fund revenues were $36.4 billion in 2008, while expenditures came in at $49.2 billion. That gap widened further in 2009. Congress transferred billions of dollars from general revenues to the highway fund, thus increasing the overall national deficit without solving the problems that shortchange the fund.
It’s time to increase “user fees” in the form of motor fuel taxes — or by such alternatives as a tax on oil, or fees based on vehicle miles traveled. Given our domestic energy security concerns, taxing fuel at higher rates could motivate Americans to conserve oil, most of which the U.S. imports. An increased fuel tax might encourage more fuel-efficient vehicles, promote sales of hybrids and electric cars, and spur more walking or cycling. Funding highways from general national funds does none of that.
Americans generally prefer to avoid higher taxes of any kind. However, the question before us is how best to control the national deficit and maintain America’s infrastructure. Increasing transportation user fees can help America become more energy efficient, contribute to energy security, and address road and transit services more efficiently and fairly than alternative measures. Even if only deemed a “lesser evil” than its alternatives, a gas tax deserves consideration.
http://www.freep.com/article/20101225/OPINION05/101223078/1322/Among-potential-deficit-remedies-dont-rule-out-raising-gas-tax-