Poor, Out-of-Date State Gas Tax Policies Costing U.S. $130 Billion/Year, Study Finds

December 17th, 2011 by Zachary Shahan

QUICK NEWS: 50-state study finds U.S. states losing “over $10 billion in transportation revenue every year, contributing to an estimated $130 billion drain on the economy resulting from higher vehicle repair costs and travel time delays.”

More from the Institute on Taxation and Economic Policy, which produced the report:

The report, Building a Better Gas Tax: How to Fix One of State Government’s Least Sustainable Revenue Sources shows that the average state has not increased its gas tax rate in over a decade, and fourteen states have gone twenty years or longer without an increase. As the cost of paving roads and building bridges rises, the tax that’s designed to pay for them keeps shrinking.

Adjusting for construction cost growth, the average state’s gasoline tax rate has effectively fallen by 20 percent, or 6.8 cents per gallon, since the last time it was raised. Diesel taxes have fallen by a similar 18 percent, or 6.0 cents per gallon.

Building a Better Gas Tax offers three policy recommendations for modernizing state gas taxes:

1. Increase gas tax rates to (at least) reverse their long term declines.

2. Restructure state gas taxes so that their rates rise automatically alongside the inevitable growth in the cost of transportation construction projects.

3. Create or enhance targeted tax credits for low income families to offset the impact of gas tax reform.

> Full Report, with 50-State Data in the Appendix

> Executive Summary with Key Findings

> Press Release

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Tags: Gas, gas tax, quickies, taxes

About the Author

Zachary Shahan spends most of his time here on CleanTechnica as the director/chief editor. Otherwise, he's probably enthusiastically fulfilling his duties as the director/editor of Solar Love, EV Obsession, Planetsave, or Bikocity. Zach is recognized globally as a solar energy, electric car, and wind energy expert. If you would like him to speak at a related conference or event, connect with him via social media. You can connect with Zach on any popular social networking site you like. Links to all of his main social media profiles are on ZacharyShahan.com.

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Ftp

In world where there is no “taxation” on gas guzzlers, and no reward for EVs and other environmentally friendly methods of transportation, we can NEVER put together a fair taxation formula. Period, end of story.
The guy who doesn’t actually NEED to have a vehicle that only gets 15mpg, and the guy that has a Prius pay the same per gallon tax…..but makes 3 TIMES the polution, and sequesters 3 TIMES the natural resources are taxed equally……no wonder not enough people are buying EVs and Hybrids.
Our politicians aren’t intelligent to address how the human mind works…..
- http://cleantechnica.com/ Zachary Shahan
  
  Well said. It’s really a shame not enough people understand basic economics well enough to know that the market makes mistakes (externalities) causing unbalanced harm to society, and that a fundamental role of government is to make companies internalize those costs so that their products are fairly priced.
- Anonymous
  
  The gas guzzler is paying three times (or more) per mile for both fuel and in taxes. There’s a reason why the Hummer is no longer manufactured.
  
  People are buying a lot more efficient cars than inefficient ones these days. As the economy picks up, people return to driving more and use more fuel the price of fuel will rise higher. That will send more people looking for efficiency.
  
  The poor sales of EVs can be blamed on a very poor economy in which people are buying little. We’re not likely to see EV prices drop this year because manufacturers locked in battery prices at higher than current levels. When the 2013 models hit the market we should expect lower prices and hopefully a much better economy.
Anonymous

Washington state is attempting to fill the missing millions by charging the few EVs on the road $100 road use tax.
Rather than actually take a look at restructuring the road tax issues, they are trying to slap a band-aid on it. Not very far sighted since the CAFE standards basically mandate that road taxes with be halved by the time the 54 MPG target is hit.