May 16 2013
It's National Transportation Week—do you know why your gas taxes don't go as far as they used to?
Most Americans don't know how much they pay at the pump in taxes. It's not very obvious, since the price per gallon already includes federal, state, and in a few cases local gas taxes. Depending where you live, you pay anywhere from about 26 cents to 50 cents. That's not very much, considering most of us pay $4 per gallon, and in most places it hasn't changed since gas cost half that much.
Gas taxes are a type of user fee—you pay for the amount you use. It's analogous to other utilities—if you use more electricity, or gas, or water, you pay more. So far, so good. The gas tax has been a great system: reasonably inexpensive to implement, easy to understand, and for almost a century it's been a good way to ensure that people who drive more pay their fair share.