Oil, Gas, and Transportation Taxes

Gas taxes are typically used to fund infrastructure maintenance and new projects, but the share of state and local road spending that is covered by tolls, user fees, and taxes varies drastically. While politically unpopular, gas taxes, fees, and tolls are all relatively good applications of the benefit principle, the idea that taxpayers should benefit from the taxes and fees they pay. One of the primary issues, however, with both the federal and state gas tax is that they’re not indexed for inflation. As time goes on and inflation increases, the nominal value of the gas tax decreases, leaving states with budget shortfalls and unfunded infrastructure. States should attempt to fund infrastructure through user taxes and fees as much as possible, internalizing the costs associated with using the state’s transportation systems.

Related Articles

How High Are Gas Taxes in Your State?

House Republicans Introduce Temporary Highway Funding Bill

Lawmaker Introduces Federal Gas Tax Reform

Michigan Trying Again on Transportation Funding

Hearing Today on the Taxation of Multinational Corporations to Fund Transportation Spending

Wisconsin Budget: AMT, Gas Taxes, Prevailing Wages, and a Sports Stadium

Improving Airport Funding to Meet the Needs of Passengers

Michigan Voters Overwhelmingly Reject Tax Increase

The Uncertain Price Tag of Georgia’s Transportation Funding Bill

What Can Adam Smith Teach Us About Modern Transportation Policy?

Secretary Lew Pushes Flawed Plan to Fund Highway Trust Fund

Michigan Tax Proposal on Ballot Next Week

Are Lawmakers Forgetting the Benefit Principle of Public Finance?

Options to Fix the Highway Trust Fund

How High are Other Nations’ Gas Taxes?

How Much Should It Cost You to Drive on the Road?

Replacing the Gas Tax with a Mileage-Based Tax

South Carolina Governor Offers Tax Swap

South Dakota Contemplates Annual Gas Tax Increases

Michigan Voters to Consider Complex Tax Package