Five Myths about Gas Taxes

by Paul Bledsoe (The Washington Post) A dramatic 40 percent drop in oil prices since June has prompted new discussion aboutraising the long-static federal gasoline tax and has many states considering gas tax hikes as well. At the federal level, Congress hasn’t increased the tax in more than 20 years, leaving it at 18.4 cents a gallon since 1993 — when gas cost a mere $1 a gallon. Among states, gas taxes average about 23.5 cents a gallon. Should we be paying more? Misconceptions about the history and politics of gas taxes are clouding the debate.
1. The federal gas tax is intended to cut oil use and help the environment. ... But neither getting people to drive less nor reducing carbon emissions is a goal of the federal gas tax. Instead, Congress instituted the modern tax in the 1950s to help pay for construction of the interstate highway system; in essence it is a user tax on drivers. A majority of the revenue is still “dedicated” to this purpose, meaning it goes directly to the federal Highway Trust Fund, not the general treasury. On the four occasions since the ’50s that Congress has increased the tax, it stipulated that the additional revenue go to either the Highway Fund or toward deficit reduction. (A small amount — less than 3 cents a gallon — is directed to fund mass transit.)
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2. Conservatives oppose raising the gas tax, and liberals support it. ... But since the 1950s, the federal gas tax has been raised under three Republican administrations (Eisenhower, Reagan and George H.W. Bush) and only one Democratic (Clinton). Although the red states of the South dotend to have slightly lower gas taxes than most other states, there isn’t a clear red-state-blue-state divide. Liberal-leaning New Jersey boasts one of the country’s lowest gas taxes, at less than 11 cents a gallon. AndRepublican governors and legislators — in Michigan, Utah, South Carolina, South Dakota and elsewhere — are among the most vocal advocates right now for raising gas taxes in their states.
Conservatives tend to be more ideologically disposed to “consumption taxes,” such as a gas tax, rather than taxes on income or capital.
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Progressives also tend to prefer a carbon tax, instead of a gas tax, to discourage greenhouse gas emissions; a carbon pricing bill by liberal Sen. Maria Cantwell (D-Wash.) and moderate Sen. Susan Collins (R-Maine) would recycle three-quarters of revenue directly back to consumers.
3. Raising gas taxes is political suicide. ... Dwight Eisenhower, Ronald Reagan and Bill Clinton all raised the federal gas tax in their first terms; each was reelected. Ross Perot made a 50-cent-a-gallon gas tax hike the centerpiece of his 1992 presidential campaign and won the highest third-party vote total in the past 100 years.
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Opinion polls consistently show that the American public supports a small increase — 10 cents — in the federal tax to improve road maintenance (67 percent in one survey) or even to fund projects to reduce global warming (50 percent), but very low support (20 percent) if no purpose is specified.
4. Low gas taxes mean Americans spend less on gas than people in other countries. ... U.S. total vehicle miles traveled in 2013 were just below 3 trillion, or about 9,000 miles per person, far higher than in any other country. Europeans also drive cars that are on average at least 30 percent more fuel-efficient than the cars Americans drive, offsetting lower prices at the pump in the United States.
5. Raising gas taxes now means consumers will be doubly penalized when gas prices go up again. Actually, consumer spending on gas is likely to fall further in the future, because fuel-efficiency regulations will roughly double the mileage of new cars over the next decade. READ MORE