Gasoline taxes are quietly getting higher
Under pressure to repair their dilapidated roads, at least 17 states have enacted or are considering raising their per-gallon levy.
Even so, their efforts are insufficient. In its latest report card, The American Society of Civil Engineers estimates that the U.S. will need to spend $3.6 trillion to repair its public infrastructure by 2020 -- and as The Journal notes, the U.S. may raise only half of that amount.
Business groups, including the U.S. Chamber of Commerce, have pushed for higher gasoline taxes to ensure that transportation projects are adequately funded, as have similar organizations on the state level. According to the Tax Foundation, gas tax and toll revenues pay for only about a third of state and local spending on roads. The remainder comes from the general fund, which includes aid from the federal government.
"There is a big disconnect between what states are spending and what they are collecting for transportation," said Tax Foundation economist Joseph Henchman in an interview.
In 2010, state and local governments spent $155 billion on highways but took in just $37 billion in motor fuel taxes and $12 billion in tolls and non-fuel taxes, according to the Tax Foundation.
Since most gas taxes aren't tied to inflation, their real value falls over time, and many states have put off raising them.
New Jersey, the state with the highest population density, hasn't changed its gasoline tax since 1988. Chris Christie, the state's Republican governor who is up for reelection, has refused to raise the levy despite being urged to do so by transportation advocates.
The Garden State isn't alone in dragging its heels. Virginia and Maryland waited more than two decades before raising their rates, and the federal gas tax was last raised in 1993.
The U.S. Energy Information Administration is forecasting that the average retail price for unleaded regular-grade gasoline for the rest of the year will run about $3.56 per gallon. Next year, it predicts a drop to $3.38. That would seem to leave a reasonable opening for states to raise their gasoline taxes.
Follow Jonathan Berr on Twitter at @jdberr.
What happened to the $787 BILLION dollars from the 2009 Stimulus plan that obama said would go towards fixing the infrastructure of the USA?
Our politicians mishandle our tax money and then turn around and tax us for more.
Higher gas taxes just so we can wipe out more existing lanes just for stupid bike paths.
How about a bicycle tax!!!!!!!!!!!!!!
Less than $100 billion was actually spent on highway infrastructure.
Most of the money went to states to backstop their rising costs
for Fed mandated programs. The bill was the American Reinvestment
and Recovery Act. You can probably get the $$ from the FHWA web site.
Another SAD chapter in bait and switch, poor media coverage, etc.
By the way, more fuel efficient vehicles mean less tax $$ for states and the FHWA.
Other tax revenues are down. For example, now that the government has successfully vilified smoking, tobacco tax revenues are practically non-existent... not because they aren't high enough (as a matter of fact tobacco is taxed at a higher rate than practically any other rate per user). Good for health, bad for revenue... and don't think for a second this has relieved the cost burden on health care for one moment. The arguments that we (the taxpayers through Medicare, Medicaid, etc.) don’t have to pay as much in healthcare for people because they don't get cancer or emphysema as often is FAR outweighed by the cost of paying other benefits (think Social Security) and other healthcare costs (doctor visits, medications, etc.) for the people now living much longer without these diseases... now they develop diseases in older age (diabetes, for example) that are also costly to medicate. Name one older person (above 75) that you know who doesn’t have at least eight prescriptions they fill… and remember these people are now retired, so they aren't producing revenue in retirement thereby reducing the tax base to pay these very benefits.
All I'm saying is before you go blaming the government or calling them greedy for raising your gas tax, remember... the above is just one example (albeit a rather large one) of a tax base that was lost... and in the name of keeping the American people safe from themselves. After all, legislatures we elected decided that if the people couldn't quit smoking on their own they'd raise taxes to the point to make it unaffordable... they couldn't argue the higher tax was to cover the expenses of smoker's healthcare because the tobacco settlement took care of that for the states and the tax rate on smokers is higher than anything else, including alcohol which causes just as many, if not more, health problems. Nope, it was to make smoking as close to illegal as they could (and socially unacceptable) without making it illegal. And people always knew smoking wasn’t healthy. Cigarettes were called cancer sticks long before the Surgeon General published a report proving it.
So remember... the revenue really does have to come from somewhere. The government is not getting any smaller (they now have their fingers in healthcare... which is extremely expensive to administrate) and tax revenues that this country used to rely on (tobacco taxes alone built roads, bridges, universities, and other critical infrastructure) are no longer available, and likely to never be available to the level they once were. It really does make sense that the government will tax what the public is spending on, which right now is gasoline.
Just like dwindling tobacco tax revenue, if we get cars that are so fuel efficient or run on alternative energy source then you can be guaranteed the government will find another area to raise taxes... It's inevitable.
Let's see, California sells ONE BILLION (yes billion!) gallons of motor fuel EACH MONTH.
It is taxed at about 70 cents per gallon. That equates to $700 million per month and $8.4 BILLION per year. And that's not enough to maintain our roads?
The problem is not the amount of taxes levied on fuel, it's where that money goes, which in CA is the general fund and is used to pay for everything (and I'll leave it generalized) other that highway maintenance!
I live in Utah and theres NO gas tax increase here thank goodness. Then again Utah is a red state and we still seem to have good maintained roads :-)
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
[BRIEFING.COM] The stock market ended the Thursday session on an upbeat note with blue chips showing relative strength for the second consecutive day. The Dow Jones Industrial Average (+0.4%) and S&P 500 (+0.3%) settled ahead of the Russell 2000 (+0.2%) and the Nasdaq Composite (+0.1%). It is worth mentioning the benchmark index posted its fourth consecutive gain, registering a new record closing high at 1992.38.
Equity indices climbed out of the gate thanks to early strength among ... More
More Market News
New legislation is allowing foreign companies to finally invest in the country's vast oil reserves.
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'