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December 2013 - Volume 18, Number 4


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Gasoline Taxes: Funding Roads or Pork?

by Jonathan Williams

According to the American Petroleum Institute, federal, state, and local taxes average 48.8 cents per gallon of unleaded gasoline and 54.4 cents per gallon of diesel. As drivers face that burden each time they fill up at the pump, it is necessary for lawmakers to show that these funds are being used prudently.


For the past 100 years, American motorists have been enamored with better roadways, and the benefits of increased personal mobility cannot be overstated. Gasoline taxes provided the vast majority of funding required to bring the United States into the automobile age and to build the interstate highway system. For generations, Americans thought of gasoline taxes as the price of mobility in America; however, with increasing
mismanagement of gasoline tax funds at the state and federal level, drivers no longer see the connection between gasoline taxes at the pump and spending to build and maintain transportation infrastructure.


Gasoline taxes in America were levied upon the premise that they would serve as a user fee for roads. If the benefit principle is to work, governments must ensure gasoline tax dollars are spent to build and maintain roads for the benefit of users who pay the gasoline tax.


Unfortunately, gasoline taxes have unquestionably departed from their historical justification, rooted in the
benefit principle of taxation. The Council’s Task Force on Tax and Fiscal Policy adopted model language to correct this problem (see “A Constitutional Amendment Restricting the Use of Vehicle Fees and Taxes for Highway Purposes”). According to previous research, at least 20 states divert gasoline-tax revenue to fund numerous general fund projects. In addition, state gasoline-tax revenue, which could have been used for road construction and maintenance, has been instead used for the following:

• Administration of mobile home titling,
• Aid to public schools,
• Improvement of recreational snowmobiling,
• Eradication of the fruit fly and other emergencies,
• Recreational boating activities, freshwater fisheries management and research,
• Boating and boating facilities, seafood and salt water sports fishing, and
• Conservation activities to prevent or reduce soil, wildlife, and habitat loss.


The recent acceleration away from the benefit principle is detrimental to sound tax policy, quality public roads, and the overall integrity of government “trust funds.” If benefit-principle taxation is to survive as the foremost source of road funding, lawmakers must insist on more oversight to ensure revenue from gasoline tax user fees do not support bridges to nowhere or attempts to eradicate the fruit fly. Instead, these user fees should be used to build the roads of the 21st century and to provide a fair and equitable transportation system for all American motorists. For additional information, please see “Paying at the Pump: Gasoline Taxes in America” at


Jonathan Williams is Director of the American Legislative Exchange Council's Task Force on Tax and Fiscal Policy as well as the Center for State Fiscal Reform.


This article appeared in the March/April 2013 edition of Inside ALEC and is reprinted with permission from the American Legislative Exchange Council.


LIMITS is one of our quarterly membership newsletters, arriving in March, June, September, and December. It consists of short articles and essays on protection of human rights by limiting the powers of government.


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