According to a Wall Street Journal publication, the gas tax in the United States is not capable of paying for the country’s transportation system any longer. Despite increasing vehicle ownership due to population growth, gas demand won’t increase enough to generate adequate revenue.
Image: oil barrel on $100 via Shutterstock
According to the CBO, gasoline tax revenue is projected to fall by $57 million over the next 11 years due to a scheduled federal fuel economy standard increase.
“The idea that gets the broadest support is to take the user-fee piece of the gas tax to its logical conclusion: tax motorists on the miles they drive. Many economists argue that such a tax—known as a vehicle-miles-traveled tax or mileage-based user fee—is the fairest, most sustainable replacement for the gasoline tax. The problem is how to track the miles.” And then there is the cost of collecting the fee.
“Mileage-based fees can also be adjusted to discourage motorists from driving on the most congested roads or at the busiest times of day. Mileage-based fees ‘let us kill two birds with one stone,’ says Randal O’Toole, a senior fellow at the Cato Institute, a libertarian think tank. ‘Short of privatization, it really is the free-market solution.'”
Source: Planetizen
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