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Cars oil tax

Published on September 21st, 2012 | by Nicholas Brown


Solutions to Fixing the Gas Tax Crisis

September 21st, 2012 by  

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.

oil tax

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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About the Author

writes on CleanTechnica, Gas2, Kleef&Co, and Green Building Elements. He has a keen interest in physics-intensive topics such as electricity generation, refrigeration and air conditioning technology, energy storage, and geography. His website is: Kompulsa.com.

  • rkt9

    California and Indiana have the highest state gas and fuel taxes, and they also have some of the worst roads and infrastructure in the country. So I question whether raising taxes is the answer. Toll roads are generally the best mantained roads. Trucks already pay a special heavy use tax. Raising taxes on trucks of course will add to the cost of transportation for everything, it will get passed to the consumer. Taxing by mileage and weight of course is the fairest and most logical. Engineering ways to get more for our money, by building better roads should also be a part of the solution. We move far too many goods by truck long distances, Trucks are allowed a gross weight of 80,000 lbs, trucks weighing this much are not safe! Almost half that weight is just the tractor and trailer. A better policy would be to place a limit on the net weight of commodities shipped, thus provide more of an incentive for companies to employ the lightest equipment, maximizing profit.
    Also, the laws we have now, the driver is responsible for the weight, and pays the fines if overweight. The shipper shouild be the one held responsible for the weight.

    • Bob_Wallace

      Well, New York has the highest state fuel tax, CA second, and Indiana is number seven.
      Louisiana and North Carolina are the states with the worst rated roads. California and Indiana don’t even make the top ten worst. Indiana, in fact, gets rated as the fourth best in the nation.


      But let’s not let facts get in the way of a good story.

      Raising taxes on trucks will increase so that they pay their own way and don’t continue to be (what’s Romney’s term, leeches?) leeches sucking in taxpayer dollars will increase the price of delivered stuff a bit. But we are paying that cost anyway, just through tax dollars.

      Increase the cost of fuel tax on trucks and big truck operators will work harder to cut their fuel use. More freight will move to rail which is incredibly more fuel efficient. And in some cases we may find it cheaper to manufacture/produce on the local level in order to avoid shipping costs.

      • Thanks, Bob. Way to bring in some facts.

        Perhaps the reader thinks they’re the worst roads because thy’re the roads he’s familiar with, or was just making a wild guess.

        I certainly think the best solution is that the users causing the most damage pay for the damage. It’s just logical. If that brings up the cost of some goods, so be it — that’s the more realistic cost! Or maybe it will make transport companies become more efficient or use different means.

  • I believe that a solution to funding of clean energy is based in the way this country generates its revenue. It is the way we taxed that is the failure of the system. I advocate the Fair Tax. HR-25 and http://www.fairtax.org . If we can generate more revenue and bring business manufacturing home, The more companies that are brought back to our shores the more R&D is performed here.

    • Bob_Wallace

      Somehow, Buck, I get the feeling that you’re more into collecting money than working out a better tax system.

      I got that impression from looking at your site and found it nothing but a request for donations while spending no energy on describing your idea. (And, no, I didn’t take time to look at your video. You gave me no reason to be interested.)

      • Bob, I am not looking for any money at all. I just believe that the income tax has seen its day. It is time to switch to a revenue generating system that is fair across the board. If I am asking anything of you and the citizens of our country, it is to take the time to visit the Fair Tax site and become familiar with this system. Again you can do nothing. But I am not asking you for anything but to attempt to help yourself.

  • jonesey

    Gas taxes have NEVER paid for 100% of the transportation system in the US. We are reaching the end of what is essentially a pyramid scheme funded by endless sprawl and growth. New roads and maintenance on existing roads have been funded by sprawl development. Those funds are drying up, and now we have a massive backlog of deteriorating infrastructure to maintain. Gas taxes can’t keep up. And that’s not even mentioning the costs of oil company tax breaks and direct subsidies, military spending to keep oil prices low, health care and lost productivity caused by air pollution and highway crashes, etc.

    VMT fees will have the same problem as gas taxes: people are driving less, not more, and VMT fees will (a) not come close to maintaining our current infrastructure and (b) be based on predictions of endless growth, which won’t work because VMT are flat or declining.

  • StefanoR99


    This is not a good solution as it is a clear tax on mobility. Better to levy a one off yearly tax on cars and a proportionately higher tax on heavy goods vehicles which are responsible for 90% of road wear due to the massive loads they subject the roadbed to,

    • Bob_Wallace

      Easy enough to use a weight factor in the tax calculation. Tax vehicles by miles driven with the mileage rate determined by vehicle weight.

      Personal vehicles, being lighter, would get taxed lower per mile than heavier large trucks. That’s what we do indirectly now by using a fuel tax. Heavier vehicles generally use more fuel, thus pay more tax per mile.

    • Anne

      Welcome to the real world where mobility costs money. Do you think these highways were simply wished into existence and maintain themselves? What should we expect next? An airfare is a ‘tax on mobility’?

      When exactly did the principle that the user pays for the system cease to be a reasonable and fair proposition?

      • StefanoR99

        Because we pay for the roads already with tags, gas tax etc. The problem is govenment isn’t very good at spending the money – they dip into these taxes for other programmes.

        Tax per se is no problem, raise cost of tags for cars, and raise truck license accordingly. We already have the mechanisms in place for collecting that tax.

        Tax per mile means sticking GPS in your car and people spying on your movements. Only apple should be able to do that lol.

        • Bob_Wallace

          No, no GPS required. Just record mileage at the annual vehicle inspection that most places already have. Have people self-report when they do their annual license renewal each year. If it turns out that people are under-reporting, then check mileage at renewal.

          And consider talking to a professional about your apparent paranoia problem. You think the government has an interest in following each the hundreds of millions as we drive around?

        • Anne

          Do you really believe the virtually non-existent gas tax pays for ALL roads in the USA?

        • I’m sure it depends on the location. Many governments are also good at dipping into general funds or other funds to boost funding for roads.

          The bottom line is, there really isn’t the funding for roads being legitimately brought it. This has been the case for decades, in fact.

      • Good question. (That last one.) People have really become disconnected from responsibility. People want no or minimal taxes and great services and infrastructure. There’s a reason why US quality of life doesn’t match that of more responsible Western & Northern European countries, and some Asian countries.

    • That would be a very unfair way to tax people. It gives no consideration to how much a person drives (deteriorates infrastructure).

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