Let’s Rethink The Gas Tax

Isaiah J. Poole

Our political inaction on properly maintaining our transportation network is criminal. But at least in some corners there is a healthy debate on how best to pay for what is a multi-trillion-dollar task.

There is the traditional political argument, perhaps best captured Wednesday by Rep. Earl Blumenauer, D-Ore., who called for an increase in the federal gasoline tax that is the main source of federal money for highway and public transportation projects. He is proposing that the tax, now 18.4 cents on each gallon of gasoline, increase to 33.4 cents over the next five years. Since the federal gas tax hasn’t increased since 1993, that increase would really only bring the tax back up to its 1993 buying power.

But even Blumenauer, in his statement, acknowledged the need for “fairer and more sustainable funding methods” as we move deeper into the 21st century. The gas tax is most appropriate for a world of gas-guzzling cars shuttling between car-dependent communities. It raises the most money to maintain the roads from the people who use them most, and it ideally keeps the price of gasoline at a level that encourages people to guzzle less gas, either by using alternate means of transportation or by buying more efficient vehicles.

We are, thanks in part to Obama administration fuel-economy rules and a period of high gasoline prices, using vehicles that are more fuel-efficient; in fact, an increasing number of vehicles don’t use gasoline at all. Meanwhile, more people are using public transportation where local communities have made the investment in buses and rail. Those fortuitous developments are key to why raising the gasoline tax – meritorious though it may be, as Brad Plumer lays out the case on Vox – is not going to be the long-term answer to addressing our transportation funding crisis in a world where people are doing what we want: using less gasoline.

This week the Eno Center for Transportation, a Washington-based nonprofit, released a report that looks at how transportation is funded in other major countries as it assesses the funding crisis in the United States. “The current federal program for funding surface transportation infrastructure in the United States is broken,” the report concludes, and that other countries have demonstrated that alternative funding mechanisms can be made to work more effectively.

For example, Germany, with an infrastructure that is ranked 10th best on the world (compared to the United States, which ranks 19th), funds transportation projects through its general fund in five-year appropriations. Its very high gasoline tax, which works out to more than $3.40 a gallon, covers the cost of national transportation spending and then some, but gasoline tax revenue is not earmarked for transportation as it is in the United States. The five-year funding cycle allows for the ability to move forward with large-scale projects.

The Obama administration has tacitly broken out of the transportation-user-fee box with its proposal to declare a “holiday” on profits that corporations have stashed away overseas to avoid taxation, taxing what comes back into the country at an exceptionally low rate and dedicating a share of those receipts for infrastructure. We’ve vociferously opposed that specific proposal, but the business sector – which after all needs a functioning transportation system to move its goods and services – should be willing to shoulder its share of the cost. It should not fall disproportionately on the shoulders of already-too-squeezed working-class households.

We no longer have a transportation network that is the envy of the world. But the good news is that we can learn from countries that are doing better than we are. Progressives are in the best position to use those models to lead policymakers toward what would work best for a 21st-century America.

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