The Tax Bite on Thanksgiving Travel

Last night I spoke at the Cato Institute on an America’s Future Foundation panel called “Taxing the Holiday Spirit,” where I was tasked with addressing the tax bite on travel that a lot of families endure as they visit loved ones this season. I started running the numbers for my own Thanksgiving travel, and the costs are pretty substantial; my family will spend $165.15 on gas taxes and tolls for our trip up to Northern New Jersey next week.

Below is the breakdown of our tolls, some of which are really hefty (even the ones that are only charged when you are traveling northbound or southbound). The total trip costs $46.90 in tolls per car!

My family is all DC-based, but we will be taking three cars up to New Jersey, partially because of schedules of my family and our significant others, but also because sometimes it's better to avoid the dynamic of trapping the whole clan in a small box hurtling up the highway for five hours. Below, I’ve run the numbers on the various state and federal gas excise taxes and fees in each of our cars based on their mileage per gallon. The trip is about 500 miles, and when you add the three cars together, this makes for $24.45 in gas tax liability for the family.

So all told, gas taxes and tolls make for $165.15 in additional holiday costs. That’s probably more than our total contribution in groceries to Thanksgiving dinner. But believe it or not, my policy takeaway from this is that gas taxes and tolls are some of the better levies out there for transportation infrastructure funding. For the most part, they charge the people who use and wear the roads, as opposed to income or sales taxes, which just clumsily tax everyone and then provide roads for “free.” Across the country, states generally don’t lean on gas taxes and tolls as much as they could. On average, they only pay for a third of state and local road spending.

So if you drive this holiday season on a toll road, don’t get too upset—this is one of the few times where you make a payment to the government and you get something directly in exchange. We could use more of that.

Happy Thanksgiving!

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