Wednesday, March 6, 2013

Gas Taxes

Federal and state fuel taxes are a major source of funding for transportation infrastructure. Declining revenue from these taxes, brought on by increased fuel efficiency and reduced travel due to the weak economy, is prompting lawmakers to take a look at how transportation is funded.

California and Wyoming have already increased gas taxes. Maryland, Minnesota, New Hampshire and Virginia may soon follow.

Of course, people are looking beyond fuel taxes. Some have suggested treating transportation more like a utility. In a sense, a gas tax is something like a utility fee in that gas use is somewhat proportional to miles use. The problems with a fuel tax have been noted, which means the tax rate must increase if it is to continue as a primary funding source. A tire tax might also support a utility-like fee because tire wear is also somewhat proportional to miles driven. Some have even propose a per-mile tax, though this would be more difficult to administer because miles driven would have to be reported by vehicle owners or recorded and submitted by a device, which prompts privacy concerns.

We probably have the means to solve our transportation funding problems. Not all of them are easy, but then what is?

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