Raising The Gas Tax To Fund Infrastructure Might Be A Necessary Evil, But Only For Now

Photo credit AP
Photo credit AP

President Donald Trump’s administration is currently trying to raise $200 billion to fund a vague, almost-certainly troubled infrastructure package, and as part of that Trump has reportedly expressed interest in raising the federal gas tax for the first time since 1993, by 25 cents. While a regressive tax by design, there’s inherent problems to hiking the rate, but it may be one of the only ways forward—at least for now.


The tax has been stuck at 18.4 cents per gallon for the last quarter century. So, for starters, consider how much the hike could raise.

A 25-cent increase is backed by powerful lobby groups like the U.S. Chamber of Commerce, which estimates it could raise $394 billion, according to The Washington Post. That’s a far cry from the $4.6 trillion that the American Society of Civil Engineers thinks we need to really fix our infrastructure. But it’s a start.

There’s plenty of opposition to the idea from Republican backers like the Koch brothers. From the Post:

More than 25 groups, mostly backed by the Koch brothers, sent a letter to Congress on Monday that said “raising the gas tax is a bad idea.”

“A higher gas tax means higher prices not just on gas, but on goods and services throughout the economy. These costs would inevitably be passed along to consumers in the form of higher prices, resulting a regressive tax hike on those who can least afford it,” wrote Brent Gardner of Americans for Prosperity and the other signatories.

The U.S. Chamber counters that not addressing America’s infrastructure is costing businesses and families money.

There’s some dispute over whether the president actually threw his support behind an increase, but at a time when his administration’s considering cutting public transit funding for Amtrak to support a $200 billion infrastructure package, it’s encouraging that the gas tax is back in the conversation. (As I’ve previously noted, Amtrak funding’s sorely needed, even more than it already gets.)

It’s not ideal, but we’re barreling toward crisis-level funding issues. Look at how bad things are in Detroit as of late, for example:


It shouldn’t be like this.

Now, of course, the problem with the gas tax, besides its regressive nature, is that the funding level generated by a gas tax eventually shrinks. As we put more fuel-efficient cars on the road, that eats away at the funding level generated by a gas tax. It’s true that the average fuel economy of new vehicles sold has been down as of late as people buy more and more big SUVs and trucks thanks to cheap gas, but in general, cars are more efficient than they’ve been in decades. And they’re getting more and more so, especially with the looming advent of EVs.


Trump’s administration wants to ease up on MPG targets (a supremely bad idea in its own right), but automakers cross the industry are also preparing to roll out an onslaught of all-electric cars. And they’re also trying to do more to get people to stop owning a car and switch to ride-hailing services instead.

To compensate, some sort of increase in the gas tax is going to be needed in the short-term—which, to be sure, definitely sucks. A gas tax is regressive; low-income drivers have less fuel-efficient cars, so it hits their bottom line harder. Wealthy CEOs, meanwhile, are probably expensing a black car to meetings or taking a corporate jet to get around.


What could work beyond the gas tax? Wired had an interesting idea this week, where you’d pay a tax based on the number of miles you drive. Except, it’d be even more comprehensive:

A [Vehicle Miles Traveled] tax could tamp down on congestion by adding a few pennies to the per-mile fee during rush hour or when drivers enter city centers. (That second bit is also known as a congestion charge.) To control emissions, gas guzzlers could pay a higher per-mile rate.

The technological challenges are minimal. “Modern cars are essentially giant smartphones,” Atkinson says. It’s not difficult to imagine coupling a financial framework (like those used by extant tolling agencies) to a mapping application on your car. Older cars would be gas tax laggards—the fleet takes 10 to 15 years to fully change over. Even there, you could rig up a dashboard GPS unit capable of calculating vehicle miles traveled.


How granular can this sort of externality-tracking get? Take tailpipe emissions. Particulates and volatile gases disproportionately impact children and the elderly. Municipalities with a heart could code a buffer around schools, hospitals, or retirement communities and charge a premium for people driving nearby. A city below sea level might implement a surcharge for greenhouse gas emissions, filling the coffers in preparation for battling rising seas. (Though the punitive attention would probably be better spent on big polluters like coal plants and the oil industry.) Hyperconscious mapping software might even be programmed to detect cars that spend too long idling in one place—more wasteful emissions. And real-time congestion mapping à la Waze has obvious implications for easing traffic.


I think it’s a unique idea, but even then, a VMT presents a couple of challenges—namely, the privacy concerns it presents, and—similar to how a gas tax is inequitable—it’d disproportionately put low-income, rural drivers at a financial disadvantage.

But that doesn’t change the fact that we’re sorely lacking infrastructure funding, and with electric cars potentially coming to our roads in droves, that could wreak havoc on funding levels from the gas tax even more. Still, a VMT is the kind of idea we should be talking about now. The future’s coming no matter what.


Could we test out other pilot programs? Maybe states could raise registration fees on those who earn more than $1 million per year. (I can already hear you firing up the comment section to call me a commie loser, but think about it.) Maybe we could cut our Defense Department’s $686 billion budget a bit? You could sharply increase the gas tax even more and, at the same time, heavily-subsidize electric or fuel efficient vehicles for lower-income drivers who otherwise would be stuck with a terrible clunker. I don’t know.

For now, the gas tax is a quicker solution. We’re already spending enough money as it is on upkeep, thanks to the bruising our vehicles regularly take from America’s shitty roads. At least a gas tax could maybe fill a few potholes.

Senior Reporter, Jalopnik/Special Projects Desk


Yeah, how about no.

We don’t need a tax that disproportionately impacts the poor who have to drive to work, is basically meaningless to wealthy people, and further serves to increase income inequality. This is ESPECIALLY true if we have a watershed moment with EV’s - guess who’s gonna be stuck driving older, gas cars longer? Oh, that’s right, poor people.

Instead, let’s just have a reasonable tax code that is actually progressive. Get rid of the capital gains exception. Get rid of the mortgage interest deduction for anything but first homes up to 500k. Have a property rental deduction. Increase taxes on companies that are shipping tons of products by truck, which is what is really chewing up the roads. A million other things.

The solution is not yet another “solution” that punishes poor people. Being poor in the US already sucks enough.