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

Map of State Gasoline Tax Rates in 2014

June 3, 2014

Transportation Plan Proposes Business Tax but Secretary Floats Possibility of Tolls

May 5, 2014

Federal Gas Tax Hikes Proposed by Senator Carper

April 30, 2014

Share of State & Local Road Spending Covered by Tolls, User Fees, and User Taxes

January 7, 2014

Parking and Transit Benefits Tax Exclusion Parity Expires Again; Congress Should Consider Permanent Fix

January 6, 2014

Gasoline Taxes and User Fees Pay for Only Half of State & Local Road Spending

January 3, 2014

Taxes on Holiday Air Travel

December 30, 2013

The Tax Bite on Thanksgiving Travel

November 21, 2013

Map: State Gasoline Tax Rates

October 29, 2013

Inflation Indexing the Federal Gas Tax

October 24, 2013

Links: A 20 Percent Tax on Guns, Fuel Tax Fraud in Europe, and Fat Joe Evades Taxes but Not Prison

August 27, 2013

Massachusetts to Have Second Highest Cigarette Tax, Rare Tax on Computer Services, Higher Gas Tax

July 26, 2013

Massachusetts Rejects Higher Income Tax

July 8, 2013

Links: Gas Tax Increases, Effective Corporate Tax Rates, and the Estate Tax

July 2, 2013

Lessons from the Indiana Toll Road

June 26, 2013

Delaware’s $97.5 Million Pot Hole

June 17, 2013

Electric and Hybrid Licensing Fees: Distortive Infrastructure Funding Tools

June 12, 2013

Links: Russian Tax Havens and Taxing Hybrid Cars

June 11, 2013

Happy Birthday to the Federal Gasoline Tax

June 6, 2013

The Oil Industry’s Tax Burden and Another Attempt to Increase it

April 8, 2013