By on December 7, 2009

Just stop talking about pay-per-mile! (

Ray LaHood seems to think so. He tells the Dallas-Fort Worth Star-Telegram:

The problem we have is, Congress wants to pass a very robust transportation bill in the neighborhood of $400 billion or $500 billion, and we know the highway trust fund is just deficient in its ability to fund those kinds of projects. The highway trust fund was substantial at one time but now with people driving less, and driving more fuel-efficient cars, it has become deficient. To index the federal fuel tax, that’s something Congress is going to have to decide. As we get into the reauthorization bill, the debate will be how we fund all the things we want to do. You can raise a lot of money with tolling. Another means of funding can be the infrastructural bank. You can sell bonds and set aside money for big projects, multibillion-dollar projects. Another way is (charging a fee to motorists for) vehicle miles traveled. The idea of indexing the taxes that are collected at the gas pump is something I believe Congress will debate. When the gas tax was raised in 1992 or 1993, in the Clinton administration, there was a big debate whether it should be indexed. At that time, they thought there’d be a sufficient amount of money collected. Now we know that isn’t the case. That is one way to keep up with the decline in driving, and more fuel-efficient cars.

LaHood stopped short of explicitly endorsing a gas tax hike, but he said it’s an issue that congress will have to take the lead on. And if it comes to a debate, let’s hope that indexing the gas tax for annual increases wins out. After all, LaHood has made it clear that he favors a pay-per-mile scheme which would require placing GPS tracking devices in all vehicles. Moreover, steady increases in the gas tax would accelerate consumer demand for fuel-efficient vehicles, actually helping automakers reduce their fleet average fuel economy numbers in a more organic fashion that CAFE mandates. The idea of indexing fuel taxes is said to be gaining support among transport policy analysts. In light of the threat posed by pay-per-mile, we’ll call that a good thing.

Get the latest TTAC e-Newsletter!

32 Comments on “Is A Gas Tax Hike Coming?...”

  • avatar

    With the present economy I’d be absolutely amazed at any attempt by Congress to raise taxes on anything especially gasoline.

    • 0 avatar

      I can’t be amazed by this Congress trying to raise taxes on anything and everything.  Besides, gasoline is only used by selfish people who insist on wasting precious earth resources transporting themselves rather than being herded onto public transportation.  The nerve!

  • avatar

    I agree with you. I think it would be terrific. If any Massachusetts Congressional delegates (or aides thereto) are reading this, This is the sort of issue that could easily sway me for or against you.

  • avatar

    Please, no gas tax hike until I can buy a Fiat 500.

  • avatar

    Or, you know, they could SPEND LESS MONEY!
    In the middle of a major recession with unemployment running at 10% and all they can think of is to spend more money and raise taxes.  We’re in the very best of hands.

    • 0 avatar

      And yet, spending money on highway maintenace (and raising taxes to have that money in pocket) provides jobs to keep unemployment from getting worse, maybe even putting some unemployed back to work. Go figure!

      Of course, spending less is still an option. Think about it as you cross older, maintainance-deferred bridges.

    • 0 avatar

      Taxcuts actually generate more to the economy than taxes.  The gov’t feels far to obligated to fund many things that should be funded on their own.  While roads should be funded by the gov’t through taxes, the gov’t should always be looking at spending less money.
      After all, I live on a budget.  When I need to buy something expensive, I save up for it.  The gov’t just spends money and never really looks at budgets.

  • avatar

    It would also help if Congress would quit taking the “surplus” out of the highway trust fund.  And restrict the projects to highways.

    PS. The word “trust” in the description of the fund is being used very loosely.

    • 0 avatar

      +1. Calling it a “highway” trust fund is a congressional misnomer. Better would be a “Mass Transit Kickback” or “Construction Union Kickback” fund.  The inefficiencies and waste in the highway trust fund make a UAW Flint plant look like a Taiwanese Chip Fab plant.
      And it’s just not that we need to pour more asphalt. There’s vast room for improvement – from synchronized signals to real time congestion tracking via a Garmin-like animal…

  • avatar

    Define “fuel efficient” for me, and let me see a demographic (along with median income) of the majority of people who drive hybrids/diesels.  Not to say that all those people are rich, but hybrids and diesels don’t exactly grow on trees either. Odds are the people that would end up paying for this are those of us who can least afford it.

  • avatar

    If this money all goes to the highway fund and actually gets things built and doesn’t end up being a fund that gets raided by congress critters for pet projects in their districts, like a bridge to nowhere, if this fund actually goes toward decaying infastructure, then I’m all for it.  Of course pigs could also sprout wings. 

  • avatar

    A lot of gas gas money is diverted away from road maintenence, if people are driving less then maybe all that money doesn’t need to be diverted to public transport. 

    Also, what destroys the roads are semis, not cars.

    Road construction is incredibly inefficient and corrupt, but not much can be easily done about that.

    But I’ll take a gas tax increase over a GPS monitor anyday. 

    Come to think of it, if we do get GPS monitoring semis are screwed.  Towns and counties aren’t going to put high per mile charges on voters in cars, they’re going to hit the trucks that actually destroy the roads.  Maybe that’s the one lobby that can save us from GPS monitoring.

  • avatar

    Instead of a gas tax, how about a tax on imported petroleum to encourage domestic production?

    • 0 avatar

      I’ve always thought that was a good idea – given that OPEC is a monopoly force distorting the market.
      But I think any imported gas tax violates certain trade treaties or WTO rules that we (the USA) signed.

    • 0 avatar

      I’d much rather use up other people’s oil and keep ours.  Then when they’re all out, we’ll have lots and can charge way more!

  • avatar

    Suppose we take the economic circumstances out of the question about gas taxes. Specifically, suppose we do a gas tax, but offset it with a decrease in some other tax or with a tax credit. Or, suppose we leave the gas tax where it is but allow it to go up with inflation. Inflation is minimal right now, so it won’t really take effect until the economy starts getting better. Of course, as others have pointed out, a gas tax is regressive, hitting poor people harder than the rich. With a proper tax credit offset, this can be negated.
    Given those caveats, I can’t think of anything particularly bad about a gas tax. Raising gas prices reduces demand for oil, reducing our dependency on foreign oil. Also, it is certainly better than CAFE mileage standards. Rather than punishing companies that build certain kinds of cars (a la CAFE), a gas tax is agnostic about the car. It is entirely up to consumer choice. Also, higher gas prices make people drive less, reducing traffic.

  • avatar

    This is a good idea.  Raise taxes to make sure those greedy families and their gas guzzling, polluting hulks bear the brunt of yet more bad news.
    Maybe if LaHood worked on the average salary of his constituents (I think the average salary in the US is now 52k and change), we’d see a lot less of this grandstanding and more real solutions suggested.
    Holding my breath, turning blue….

  • avatar

    Get used to it.  You spend it now, you either have to massively devalue the currency to pay for it (who will buy US Treasuries when we lose our credibility) or you have to pay for it later through increased taxes.
    Nothing is free.
    Then add this EPA-turned-political-thinktank mess and you’re looking at nice big hikes on your energy usage, all to save “mother earth” from evil climate change we now know is based on BS research (but is never mentioned in the media….hmmm….even I’m one of those “evil liberal media” skeptics, I don’t think that is the case, but in this instance, I’m suddenly very suspicious)

  • avatar

    Taxcuts actually generate more to the economy than taxes.
    Not sure what this is supposed to mean. The issue here is funds to pay for roads and such.  Unless we try to rely on donations, taxes via fuel, tolls etc. are the only way to acquire funds.  Of course our representative representatives are, like their constituents, hell bent on denying reality in many forms, so I’m looking forward to their ingenuity in raising money without anyone having to pay the bill. At least near term. Doing something straight forward like raising fuel taxes would cause intense televised hearings, pandering and bitching by the traveling public about big government and yet more proof that Obama is trying to take over everything; even the Federal highway system. He must be stopped. At least until he shows us that birth certificate.

  • avatar

    Will there be a gas tax hike? Is water wet?
    I think it will be great! So driving will cost more, whats the big deal? Besides all the money will go directly into fixing our crumbling roads! This will keep people employed, in roadwork or asphalt manufacturing, for the entire duration of a public roadwork project. Also, the lump sum rebate checks given to poor people will be saved and used to offset the increased cost of driving, so the tax would have no impact on their ability to afford driving.
    I also believe that this will not deter the government from instituting a charge per mile scheme as well. And I firmly believe President Sarah Palin and VP Lynne Cheney will be more than fair with their use of GPS location data for every car in the country.

  • avatar

    …reduce their fleet average fuel economy numbers in a more organic fashion that CAFE mandates.”
    Alter that to provide a “more orgasmic fashion” and the problem will likely be solved lickety split.
    Or something akin to that.
    As for hitting the truckers… ultimately expect you the consumer to actually pay the cost via higher prices for goods and services.
    Unintended consequences are a given due to the complexity of a modern interwoven society.
    Might be time to split the Union into manageable fragments.
    Besides, I am convinced the Union will eventually fragment anyway.  Let’s commence the procedure now while the deed can be done in a manageable method.
    Each area can select the name for its leader.
    I kinda’ like Supreme Beloved Benevolent Head Vote-getter.

  • avatar
    Jeff Waingrow

    Here’s an idea:  Many citizens seem to voice few if any objections to monies being spent for national defense. It’s seemingly sacrosanct when it comes to budget cutting and fiscal prudence. So why not place the Pentagon in charge of our roads? (In fact, didn’t we pretty much use that rationale when the original interstate system was  conceived?)   Perhaps finally we’d get the roads we deserve!

  • avatar

    Per US DOT data, from 1992 to 2006, 38% of the federal gasoline taxes were “flexed” away from roads and into politicians favorite pork (i.e., Mass Transit and other non-road projects).
    In fact, 16% of the gas tax is taken off the top and immediately reassigned to the Mass Transit Account to fund programs such as “New Freedom”, “Urbanized Area”, “ob Access and Reverse Commute (JARC) program”, etc.
    Of the remaining “highway trust fund”, 25% is then “flexed” away ino non-transit projects and “flexible funding” for transit projects (3%).
    Do the math, 38% of your “Highway Trust Fund” tax does not go to roads. Today.
    Why, then, the hurry to raise a tax which is raided for other purposes?

  • avatar
    Robert Schwartz

    I think that a gas tax hike is a good idea, given the size of the deficit. But, I cannot support it unless Congress gives up at least 3 cabinet level departments. I nominate Agriculture, Education, and Commerce.

  • avatar

    Please let this be true, please!
    We need new roads, better roads, safer roads. Most importantly, FREE roads.

  • avatar

    A gazillion times YES to eliminating the federal Dept. of Education.

  • avatar

    Well, let’s hope this isn’t the future, an Ohio county cutting back on road maintenance due to decreased revenues (gas tax and license fees):
    The striping is bad enough but down near the bottom of the article they mention reducing the number of bridges replaced annually.  Well, I’m sure they were a pork-ridden department to begin with what with their fancy used pickups.
    Raise the tax and index it.  Let us know it will go up 2 cents per year for the next 10 years.

  • avatar

    Considering that most of 2009 I was 7 miles from work (45 min driving) and the wife was 1/2 mile (10 min walking) and we now are 34/42 miles away (45 min/55 min), a $1/gal gas tax would be the perfect opportunity to convince my wife to let me get the 250cc cruiser or dual sport motorcycle I’ve been wanting.

    On a more serious note — I’m for a gas tax provided that the government uses it for its intended purpose and not raided for education or other non-originally-intended purposes.

  • avatar

    Way overdue.  Bring it on. Just phase it in and tell the public when the increments are coming. Both consumers and auto manufacturers in the USA will make better decisions if they can better predict coming gas prices.

  • avatar

    I can’t hear anything from Congress anymore without it always sounding like: ‘by god we’re going to get this economy to grind to a dead stop if it’s the last thing we do.’ 

  • avatar

    Seriously, right now raising taxes is not the thing to do. On anything. The economy is still not healthy, the unemployment rate is in double digit percentages, and to hit people with a tax they can’t afford would just stifle things even further. A lot of people out there that drive vehicles with poor fuel economy only do so because they can’t afford to buy something else. Even for people that can afford another vehicle this would pose a problem because higher fuel costs would make it tougher to get out of their SUVs/trucks and into something more efficient. This just isn’t a good plan right now.

    • 0 avatar

      If you can afford a $3000 beater for commuting (and you legally pay insurance, etc) you can afford a liability only $1500 motorcycle that gets 5x better gas mileage for commuting with yearly insurance at $200’ish (assuming you are willing to get your M-class and you don’t need to ferry your kids everywhere and you aren’t driving in snow.)

Read all comments

Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

  • 28-Cars-Later: “My son on the other hand with his pig on fuel old Cherokee and his old F150’s on 1/2 the wages...
  • MRF 95 T-Bird: Available in a few variants.
  • ToolGuy: Would it go viral?
  • Lou_BC: Yup. Inflation. I ran the 1990 F250 I owned through an inflation calculator and it was more expensive than a...
  • Lou_BC: “glorious V8 motors” Someone’s been possessed by HDC’s ghost ;) Ford F150 is the #1...

New Car Research

Get a Free Dealer Quote

Who We Are

  • Adam Tonge
  • Bozi Tatarevic
  • Corey Lewis
  • Jo Borras
  • Mark Baruth
  • Ronnie Schreiber