Cable News Network — Cutting the gas tax exacts a steep cost on the entire economy. The gas tax funds a broad range of economy-bolstering transportation projects across the country and it is already too low to meet current (and future) infrastructure needs. It’s time to debunk the myths surrounding the maligned gas tax.
1. Americans already pay too much in gas taxes. Not even close.
America actually taxes gasoline less than most other nations. Only two countries—Kuwait and Saudi Arabia—charge lower gas taxes than the U.S. and both are net global oil suppliers, not consumers. The U.S. is the world’s largest oil consumer. By under-taxing gasoline — and thus under-pricing gasoline — the United States encourages over-dependency. Furthermore, the federal gas tax does not even come close to covering the wide array of external social costs of driving cars and trucks.
2. Gas taxes rise every year. Quite the opposite.
The federal gas tax has remained unchanged at 18.4 cents for a gallon of gasoline (and 24.4 cents for diesel) for nearly two decades. It is not indexed to the price of crude oil or inflation, so Americans pay a fixed amount whether oil prices are high or low. Ironically, given today’s debate, the last time the gas tax was raised in 1993 was for deficit reduction purposes. Taking inflation into account, the gas tax has eroded to only 11 cents today. This has seriously diminished the ability to pay for infrastructure, with a purchasing power of 45 cents in gas taxes for every dollar in national highway construction costs. This means that only one-half of the transportation investments made since 1993 could be afforded today, even though GDP has grown 55% and demands (vehicle miles traveled) have grown 29%. [Read on . . .]