Federal Gas Tax
Posted: February 13, 2015
The lower gasoline prices that we've experienced recently (until a recent uptick at the pump) have created a considerable windfall for those of us who put a lot of mileage on our vehicles. Unfortunately, the recent upswing in jobs and revenue generated by the lower gas prices will all be for naught if something isn't done soon to fix our nation's aging infrastructure - especially our highways and bridges.
I am usually not in favor of raising taxes. But I believe now is the time to raise the gasoline tax over the next two years so long as the money raised is used solely for improvements to our highways, bridges and improvements in mass transit.
The federal gas tax of 18.4 cents per gallon has not been raised since 1993 - the longest it's gone without an increase. Since the gas tax has not kept up with inflation or with improvements to vehicles, the country is attempting to operate a 2015 transportation system on 1993 dollars.
Many parts of the national highway system are in poor condition. A recent study by the American Association of State Highway and Transportation Officials found that there are approximately 64,000 structurally-deficient bridges across the country. By 2020, it is estimated that obsolete infrastructure will cost the national economy nearly 900,000 jobs and suppress domestic product growth by $897 billion.
If one takes into account the time wasted by drivers who deal with highway congestion, the national economy loses opportunities because of delays in deliveries. Continued deterioration of the transportation system means a loss of productivity in the economy. It also means that the costs of products and services goes up while employee productivity declines.
It is estimated that highways alone need annual capital investments of at least $120 billion from all levels of government to maintain what we already have and increase capacity on our roadways. However, federal, state, county and city budgets only spent a combined $88 billion on highway capital improvements in 2010, the last year for which full figures are available.
This should be the time that Congress makes transportation projects a priority. It can be done by raising the federal gas tax by only a few cents and tie the future of the tax to inflation.
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