Chart of the Day: Gas Taxes Around the World

Via Barry Ritholz’s blog, here’s a chart showing the US Federal gas tax relative to other nations:

Gas Tax Chart

 

Ritholz cites US Chamber of Commerce pressure to increase the Federal gas tax, but also the Congressional dysfunction that makes such an increase unlikely. Here’s a quote from his conclusion:

This may be a symptom of national decline rather than a cause. The U.S. often starts out full of energy and vigor when it comes to new and daunting tasks — and has been willing to spend lots of cold hard cash. But these days we lose enthusiasm about halfway through. The Marshall Plan and the Apollo moon mission stand out as examples of huge projects that took years of follow through.1 Or how about the Eisenhower-era Interstate Highway System, which is deteriorating even as we write because of lack of funding from the gas tax? But it’s harder to name recent bold projects of comparable scope that have been undertaken and seen through to completion.

Now, if you want to see a country that does take on those big, bold projects, look no further than China. If we were to determine which nation is on the rise based on investment in infrastructure, which country looks to be rising and which looks like a nation in retreat?

I would like nothing better than for Congress to prove me wrong. Pass a gas tax and bring America’s bridges, tunnels and roads fully up to date with smart-traffic controls and embedded signals ready for the next generation of autonomous vehicles. Rebuild the nation’s dismal sea and airports, harden our electrical and data grid, make the nation’s infrastructure again the world’s best.

For my druthers, an increased gas tax would be fine as long as the revenue went into some funds that decreased driving and CO2 emissions. A gas tax funding the Green New Deal? That would be an amazing policy.

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13 Responses to Chart of the Day: Gas Taxes Around the World

  1. Andrew Evans March 29, 2019 at 1:06 pm #

    I’d personally like to see a regional tax that took population centers into consideration. That way those in rural communities where they are more dependent on vehicles can catch a break. Then ideally we could avoid yellow vest type protests.

  2. Anton Schieffer
    Anton Schieffer March 29, 2019 at 1:33 pm #

    Counterpoint: let’s raise the gas tax and NOT spend it on things that make it easier to drive. Climate change is real, cars contribute plenty to it. Imagine if instead of spending tobacco taxes on public health initiatives, we spent it on growing more tobacco.

  3. Bob Roscoe March 29, 2019 at 2:29 pm #

    I think the price of milk has gone up more than the cost of gasoline. Both are necessities and I don’t mind if gas costs keeps up with milk

  4. Trent March 29, 2019 at 2:56 pm #

    This is just the Federal tax, correct? Gas tax varies state to state as a combination of federal and local . Check out this site:

    https://taxfoundation.org/state-gas-tax-rates-july-2018/

    That’s a better view since so much highway work is done at the state level with state levies.

    • Monte Castleman March 29, 2019 at 3:15 pm #

      The other problem with the chart is I’m assuming a lot of those countries take the gas tax money and use it for all kinds of other things rather than putting it back into better and wider roads like it should be.

      • Bill Lindeke
        Bill Lindeke March 29, 2019 at 4:44 pm #

        Or, rather, we should use gas tax money to provide alternatives to a system that produces a lot of social harms. Anton’s tobacco tax analogy is very apt.

  5. Frank Phelan March 29, 2019 at 3:51 pm #

    It’s more than a bit disingenuous to state that the “…US Chamber of Commerce pressure to increase the Federal gas tax, but also the Congressional dysfunction that makes such an increase unlikely.”

    Much of the dysfunction comes from the same politicians whose election campaigns are funded by the Chamber and it’s corporate allies. They helped create the Tea Party Frankenstein monster, and now it’s turned on them. They funded campaigns for the no new taxes crowd, and now they complain they can’t get a tax increase?

    The Chamber is shocked! Shocked to find gambling has been going on in this establishment!

    Yes, we need to spend more on infrastructure. It’s not about a lack of resources, we’ve spent $6T blowing up infrastructure on the other side of the world since 2001 so we know we can afford nice things. Yes, it should not just be to make driving autos easier.

    But I have not one bit of sympathy for the Chamber and their brethren.

  6. Rosa March 29, 2019 at 7:27 pm #

    What I’ve always wondered is, why is it a flat amount and not a percentage? It’s ridiculous that the tax doesn’t go up when prices go up, and that also undermines the gas tax as a source of funding for anything – when prices go up, consumption goes down. For a percentage tax (like the sales tax) that’s not a big deal because the per-unit tax goes up to. For the gas tax there’s just less money if sales prices go up.

    • Frank Phelan March 30, 2019 at 11:27 am #

      Gasoline is a commodity, which means it is a generic item (Holiday? Speed Way? Who cares?) and the price fluctuates wildly, just like copper wire. A percentage tax would result in similarly wildly fluctuating revenues.

      I’d be more interested in the tax rising by a set amount annually. That could be on a cents per gallon basis, or maybe indexed to the general inflation rate or an inflation index of heavy construction costs.

      • Rosa March 30, 2019 at 11:29 pm #

        gasoline at the retail level isn’t really a commodity though. Crude oil is a commodity and gasoline is a product, just like corn is a commodity but corn flakes are a product. Most retail products are taxed as a sales tax percentage – the main exception is sin taxes like the ones on cigarettes and alcohol.

        I’d like to see the tax go up too, but what I wondered is why it ever was set the way it is. Why is gasoline a different kind of taxation system than almost anything else people buy regularly? And is that reason linked to the way car drivers seem to think gasoline taxes pay for all the car infrastructure in the country?

  7. Paul Nelson April 1, 2019 at 11:49 pm #

    I think one of the main problems is that the private car use on infra costs a great deal to accommodate and maintain, and the overall user fee system is extremely low for that mode of transport

    It is clear that so many of our roads and streets accommodate auto use, and many can only be used by car. I think the motorway only type roads should have electronic toll systems. .

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