Now is the time for lawmakers to focus on long-term fiscal sustainability, as further delay will only make an eventual fiscal reckoning that much harder and more painful. Congressional leaders should follow through on convening a fiscal commission to deal with the long-term budgetary challenges facing the country.
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California pumps out the highest state gas tax rate of 77.9 cents per gallon (cpg), followed by Illinois (66.5 cpg) and Pennsylvania (62.2 cpg).
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As the EU pursues massive changes in public policy as part of its green transition, expect fuel taxes to be central to any policy discussions.
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At least 32 notable tax policy changes recently took effect across 18 states, including alterations to income taxes, payroll taxes, sales and use taxes, property taxes, and excise taxes. See if your state tax code changed.
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The Netherlands has the highest gas tax in the European Union, at €0.82 per liter ($3.69 per gallon). Italy applies the second highest rate at €0.73 per liter ($3.26 per gallon), followed by Finland at €0.72 per liter ($3.24 per gallon).
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Although the majority of state tax changes take effect at the start of the calendar year, some are implemented at the beginning of the fiscal year. Fourteen states have notable tax changes taking effect on July 1.
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Oil prices have skyrocketed, posing a new risk to the post-pandemic recovery. Feeling the pressure to respond, policymakers have proposed everything from gas tax holidays, tapping into strategic reserves, and even rebate cards. One idea that has crawled back from the dead: “Windfall Profits Taxes.” This idea is seemingly simple: legislation targeted at the “excess” profits of oil companies. However, as with anything in tax policy, the reality is much more complicated.
As oil prices skyrocket, a windfall profits tax targeted at oil company profits could punish domestic production and increase reliance on imports.
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A gas tax holiday may be good politics, but it’s unlikely to achieve its aims. There are far better ways to provide tax relief—short- or long-term—than an inefficient gas tax suspension.
4 min read
The cost of gas is going up. To address this, policymakers have proposed suspending the gas tax. But could this actually make matters worse? We discuss why suspending the gas tax might be a mistake and what lawmakers could do to help with the rising costs of gas.
If policymakers are looking to change the tax code to help fight inflation, they should pump the brakes on the federal gas tax holiday and instead consider structural reforms to raise the economy’s productive capacity in the long term.
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Temporary tax relief measures, like refund checks or gas tax holidays, are not necessarily bad, and can be justified as ways to return excess revenues to taxpayers, but they often miss an opportunity to do better by taxpayers in the long run.
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A vehicle miles traveled (VMT) proposal gaining steam in Pennsylvania would be the equivalent of a state gas tax of more than $2 per gallon, and that’s not all the Commonwealth is considering.
7 min read
California pumps out the highest state gas tax rate of 66.98 cents per gallon, followed by Illinois (59.56 cpg), Pennsylvania (58.7 cpg), and New Jersey (50.7 cpg).
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Rather than relying on damaging corporate tax hikes, policymakers should consider user fees and consumption taxes as options for financing new infrastructure to ensure that a compromise does not end up being a net negative for the U.S. economy.
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Traditionally, revenue dedicated to infrastructure spending has been raised through taxes on motor fuel, license fees, and tolls, but revenue from motor fuel has proven less effective over the last few decades.
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In Pennsylvania, Gov. Tom Wolf (D) has proposed phasing out the gas tax as the main funding mechanism for the state’s highway fund, and he has established a commission to recommend options for replacing it with alternative revenue sources. In a statement, the governor called the current motor fuel tax burdensome, outdated, and unreliable.
5 min read