Saturday, February 20, 2010

What To Do About The Shrinking Gas Tax

The gas tax hasn't gone up since 1993. It's still 38 cents a gallon, even though the purchasing power of that 38 cents has eroded a lot. On top of that, rising fuel economy standards mean that 38 cents has to stretch to cover more miles driven on each gallon of gas. The result is a highway trust fund that's broke. The result of that is highway construction lagging population growth.

After the jump, one idea about what to do about the problem.

One (not entirely new) idea is to index the gasoline tax not just for inflation, but also for average fuel efficiency of the vehicles on the roads. If future cars get double the miles per gallon, they'll travel twice as far on the same amount of gas, causing twice the wear and tear on the roads. It'll take twice the tax to maintain those roads, so the tax on each gallon of gas should double, too. Even more if you take inflation into account. Indexing the gas tax would keep us rolling along at least until the roads are filled with electric vehicles, which don't use gasoline. Then it's back to square one. Of course, all this is just idle thinking. With the GOP in charge in Austin, how to pay for new roads is not a priority.

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