Fuel taxes in the United States
The United States federal excise tax on gasoline is 18.4 cents per gallon and 24.4 cents per gallon for diesel fuel.[1][2] Proceeds from the tax partly support the Highway Trust Fund. The federal tax was last raised on October 1, 1993, and is not indexed to inflation, which increased 111% from Oct. 1993 until Dec. 2023. On average, as of April 2019, state and local taxes and fees add 34.24 cents to gasoline and 35.89 cents to diesel, for a total US volume-weighted average fuel tax of 52.64 cents per gallon for gas and 60.29 cents per gallon for diesel.[3]
Public policy[edit]
Some policy advisors believe an increased tax is needed to fund and sustain the country's transportation infrastructure, including mass transit. As infrastructure construction costs have grown and vehicles have become more fuel efficient, the purchasing power of fixed-rate gas taxes has declined (i.e., the unchanged tax rate from 1993 provides less real money than it originally did, when adjusted for inflation).[19] To offset this loss of purchasing power, The National Surface Transportation Infrastructure Financing Commission issued a detailed report in February 2009 recommending a 10 cent increase in the gasoline tax, a 15 cent increase in the diesel tax, and a reform tying both of these tax rates to inflation.[20]
Critics of gas tax increases argue that much of the revenue is diverted to other government programs and debt servicing unrelated to transportation infrastructure.[21] However, other researchers have noted that these diversions can occur in both directions and that gas taxes and "user fees" paid by drivers are not high enough to cover the full cost of road-related spending.[22]
Some believe an increased fuel cost would encourage less consumption and reduce America's dependence on foreign oil. Americans sent nearly $430 billion to other countries in 2008 for the cost of imported oil. However, significantly since 2008, increased domestic output (e.g., fracking of shale and other energy resource discoveries) and rapidly growing production efficiencies have reduced considerably such spending, and this falling trend is expected to continue.[23]
US tax system: