Following the release of his $1.5 trillion infrastructure plan, President Trump has reportedly called for a 25-cent hike to the federal gas tax to help pay for fixes to roads, bridges and other public works.
If a gas tax hike were to go through, it would be the first time the feds raised the gas tax since 1993.
At its current level, Americans now pay a levy of 18.4 cents per gallon on gasoline and 24.4 cents per gallon of diesel fuel.
But if a 25-cent gas tax hike were to go into effect, it’s estimated that the average driver filling up a 14-gallon tank would have to pay an extra $3.50.
How should we pay to maintain and repair roads and bridges?
The question of how we should pay to maintain and repair roads and bridges is a vexing one.
Let’s say you buy an electric car like me. Suddenly, you’re riding on the roads without paying for their upkeep. That’s because roads are maintained with both a federal gas tax and state gas tax that you pay every time you fill up. But with my all-electric Tesla, I never fill up ever. Same thing with my Nissan Leaf before that, which I got back in 2011!
To be perfectly honest, I’m losing track of the cost of gas. And I used to be someone who could tell you to the penny!
States have been taking notice of people like me for several years now and coming up with alternate solutions to replace lost gas tax revenue.
Tag fees for electric car owners
Washington state was among the first state to say, in essence, “Clark Howard, you’re a freeloader!”
Their solution to deal with people like me who aren’t paying gas taxes because we never buy gas? Electric car owners must pay an extra fee every year when they renew their plate or tag.
Sixteen additional states have since added similar taxes, according to GreenTechMedia.com.
But here’s the thing: It turns out that owners of electric cars are not the problem. The real problem is people buying more and more fuel-efficient vehicles.
The current fuel mileage mandates from the previous administration in Washington called for fuel economy north of 46.6 miles per gallon by 2021. But we’re beginning to hear rumblings that the Trump administration will lower that number to somewhere around 37 miles per gallon.
Still, regardless of what party is in control in Washington, our vehicles tend to get more and more fuel efficient over time. That’s thanks to technological advances in the auto industry.
So with more fuel-efficient cars on the roads, it goes to follow that gas tax revenue will fall and fall over time.
Taxed by the mile?
Years ago, Oregon wanted to tax you per mile you drove. The plan was to have a device installed in your car to track you via satellite and figure out your mileage driven. But people freaked because that was Big Brother knowing everything you’re doing and everywhere you’re going.
This much is clear: We’ve got to figure out some way to pay for the upkeep of our nation’s aging infrastructure. And the question is still open.
What do you think is the right answer? Write in and let me know in the comments section below.