The Highway Trust Fund is Depleted; It’s Time to Raise the Gas Tax
Things are going to get very interesting towards the end of August, as the Highway Trust Fund is set to run out of money and put hundreds of projects across the country at risk. It seems we can’t go very long without a transportation crisis of some kind, with energy prices constantly rising, vehicle manufacturers recalling seemingly every car they put on the road, infrastructure crumbling around us, and even politicians using bridges as weapons to strike back at rivals. But the Highway Trust Fund is more important than most of those things, and if it truly runs out, America is in for a world of hurt.
President Obama has said that if the Trust Fund is completely depleted, 112,000 roadway projects and 5,600 transit projects could be shut down. But that’s nothing compared to the estimated 700,000 jobs that could be lost as well. Those are the kinds of numbers that can send the country swirling back towards recession, which the country recently has finally started to pull away from. That could play well into the hands of Republicans, who want nothing more than to see the Obama administration fail and capitalize on this year’s midterm elections, and ultimately retake the presidency in 2016.
Republicans also happen to be the biggest opponents to taking a big step towards fixing the Highway Trust Fund problem, which would be an increase in the gas tax.
Currently, the federal tax on gasoline is 18.4 percent, and 24.4 percent for diesel. On top of that, states add their own taxes, which on average comes to 23.47 percent for gasoline and 24 percent for diesel. This does have a significant impact on the price of fuel at the pump, which ends up hitting most motorists hard in the wallet. The surprising thing is that the gas tax hasn’t been bumped up in over two decades, and over that time the value it has returned to road funding has eroded significantly. Add on the fact that hybrid technology and electric vehicles are taking off, and less fuel is being sold with which to collect tax revenue off of.
It’s turning into the perfect storm.