Federal & State Gas Tax

Currently, the gasoline federal tax in the United States stands at $0.184 per gallon. This tax primarily aims to support the Highway Trust Fund, although not all of the revenue generated is allocated to this fund. The last time this tax was increased dates back to October 1, 1993, and it has not been adjusted for inflation.

In most areas, the condition of roads these days is rather dreadful. Potholes are abundantly scattered everywhere, leading to significant damage for cars and trucks. Furthermore, if one looks more closely, it becomes evident that our bridges are in desperate need of repairs. Addressing this issue is both simple and complex.

The United States heavily relies on automobiles and trucks for its economy to thrive. The transportation of goods and the daily commute to and from work greatly depend on these vehicles. The cost of goods is directly affected by fuel expenses and gas taxes. Regrettably, since 1993, our politicians have lacked the audacity to confront the necessity of raising this tax, fearing that it would be detrimental to their political careers. Consequently, our roads and bridges continue to deteriorate gradually.

Furthermore, exacerbating this problem is the trend of people opting for larger and heavier vehicles. Not only are SUVs commonplace, but there is also a noticeable increase in the number of massive SUVs and pickup trucks on the streets. These vehicles further compound the challenges we face.

Below is a spread sheet that identifies the state tax for all the states. The data was sorted from highest to lowest.

Below is a spread sheet that provides an overview of the estimated total gas tax revenue generated based on the number of miles driven. The spread sheet uses 25 mpg to make the calculations. The issue is why can’t the federal and state governments only use the revenue to maintain and improve the roads and bridges?

Many states today, however, divert portions of their state gas tax revenue to the state general fund and other non-highway uses, such as these:

• The largest and most common diversions, found in 20 states, are those to transit and active transportation (pedestrian and bicycle projects). New York and New Jersey, for example, allocate over a third of their respective motor fuel tax (MFT) revenue to transit.

• Ten states divert a portion of their gas tax revenue to law enforcement and safety services, marking the second most common diversion.

• Though less frequent, diversions to education tend to be substantial, accounting for 25.9% and 24.7% of gas tax revenue in Michigan and Texas respectively.

• Other states divert gas tax revenue to tourism, environmental programs and administrative costs. In total, 22 states divert over 1% of their gas tax revenue.