A Federal Gas Tax for the Future

Source: Institute on Taxation and Economic Policy, September 2013

From the press release:
On October 1, the federal gas tax will mark exactly twenty years stuck at the rate of 18.4 cents per gallon. Against a backdrop of chronic infrastructure underfunding and federal budget crises, a new report from the Institute on Taxation and Economic Policy (ITEP) marks this anniversary and explains exactly why gas tax revenues are falling short. “A Federal Gas Tax for the Future” concludes that just 22 percent of the current gas tax revenue shortfall can be attributed to rising vehicle fuel-efficiency taking a bite out of gasoline purchases. The other 78 percent of lost gas tax revenues are due to inflation: inevitable growth in the cost of asphalt, machinery, and other construction inputs with which our twenty-year-old gas tax has not kept pace.
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