| Prospects for an increase in the U.S. Gas Tax | |
|
Recently, President Trump expressed the viewpoint that he would be willing to consider an increase in the U.S. gas tax as a means of funding infrastructure improvements and developments. In what has proven to be a rare bipartisan (mostly) stance, both democrats and republicans alike have voiced their disapproval at any prospect for such a hike.
Currently, the U.S. tax on gasoline is 18.4 cents per gallon and 24.4 cents per gallon for diesel fuel, and this is used primarily to support infrastructure. It is among the lowest fuel taxes in the world. State taxes push the total in most states to just over 50 cents per gallon, but when compared with many other countries which levy more than $2 or $3 per gallon, Americans clearly get off easy. Gas taxes became a part of the conversation during the Obama administration when gas prices had soared north of $4 per gallon, and we began to see slight changes in the purchase patterns of consumers, moving from SUVs towards smaller, and more fuel efficient models. It also greatly improved the value equation for electrified vehicles. The problem is that gas prices didn’t stay at those levels very long, and we have since seen the typical American consumer return to pickups, CUVs and SUVs. It was during this time that the suggestion was made that the U.S. should increase the gas tax dramatically, so that it would impact consumers purchasing patterns. As has been the case for years…that went nowhere fast.
A gas tax will always be a tough sell in the United States since being a use tax, it can be an economic toll on lower income families, rural families, farmers, etc.. Some trade associations, such as the American Trucking Association, AAA and the U.S. Chamber of Commerce support increasing the gas tax, but they are among the minority. (Source: Wired.com – May 9, 2017). The problem is, and remains that the cost of MAINTAINING our roads increases every year, and the Highway Trust Fund doesn’t take in enough revenue to meet its expenditures. This says nothing of the fact that the U.S. roads don’t need to be only maintained, they need to be IMPROVED. Despite this fact, don’t expect such funding to come from an increase to the gas tax. Increased registration fees are among the other possible levers to be pulled and stand a far greater chance of being adopted. Increasing the U.S. gas tax continues to be a political football that won’t find its way to the end zone any time soon.
Denis Ulicny
Learn more about WardsAuto Intelligence at http://intelligence.wardsauto.com
|
