Will We Get a Cut in our Gas Tax?

Now the Obama administration wants to let the states charge tolls for the use of the Interstate highway system. This is the system for which our road and fuel taxes have already paid; the states’ tax money is supposed to be for maintenance and repair of the system.

OK, fair enough. Those roads won’t repair themselves.

But we still pay those road and fuel taxes, and those funds are for maintenance and repair. This graph from the US Department of Energy, via the Center on Urban and Metropolitan Policy‘s Fueling Transportation Finance: A Primer on the Gas Tax, gives a breakout of what went into the price of a gallon of gas as recently as 2002.ComponentsOfGasPrice

Federal taxes were 12% of the price, or about 44¢ per gallon here in north Texas (updated to 2014).

This graph, from the CBO via the same article, gives the 2001 breakout of Federal receipts for the highway trust fund.FederalHighwayTrustFundReceipts

Gasoline and diesel fuels—car and truck fuels—comprise the vast bulk of the receipts.

This 2007 table from the Federal highway administration updates those breakouts.

Table 4. – User Fee Structure.
Tax Type Tax Rate
Gasoline and gasohol 18.4 cents per gallon
Diesel 24.4 cents per gallon
Special Fuels:
General rate 18.4 cents per gallon
Liquefied petroleum gas 18.3 cents per gallon
Liquefied natural gas 24.3 cents per gallon
M85 (from natural gas) 9.25 cents per gallon
Compressed natural gas 18.3 cents per 126.67 cubic feet
Tires: (maximum rated load capacity)
0-3,500 pounds No Tax
Over 3,500 pounds 9.45 cents per each 10 pounds in excess of 3,500
Truck and Trailer Sales 12 percent of retailer’s sales price for tractors and trucks over 33,000 pounds gross vehicle weight (GVW) and trailers over 26,000 pounds GVW
Heavy Vehicle Use Annual tax: Trucks 55,000 pounds and over GVW, $100 plus $22 for each 1,000 pounds (or fraction thereof) in excess of 55,000 pounds (maximum tax of $550)

Notice in the table that taxes are broken out, also, by vehicle weight. Trucks with tire capacity over 3,500 pounds are the trucks that ship our goods over the highways.

Cars and trucks—including those shippers—comprise the vast bulk of the Interstate highway users. Guess who’ll pay the tolls. And who’ll pay higher prices for the goods we buy after they’ve been shipped to the stores we frequent.

Will we see compensatory reduction in our fuel taxes, which as noted above already exist in major part to pay for interstate highway maintenance?

Fat chance.

Jobs Numbers

According to the headlines, our unemployment rate fell to 6.3% in April (from 6.7%); it hasn’t been that low since before the Panic of 2008. This also came as the private sector and state and local governments added 288,000 jobs. Good news, eh?

It is good news, for those 288,000 Americans. However. There’s always a however.

806,000 Americans gave up looking for work in this economy and dropped out of the labor force. The labor force participation rate fell to 62.8% (from 63.2% in March), the lowest rate in nearly 40 years. If this number had only held steady at March’s value, the unemployment rate would be in the 6.7%-6.8% range.

These data also come on the heels of our GDP datum for the first quarter of 2014, which ended in March: GDP grew at the sickly rate of 0.1% over the 4th quarter 2013.

The jobs report turns out to indicate a fine beginning for the second quarter of 2014.