President Trump has proposed a temporary suspension of the federal gasoline tax - a move that sounds nice until you realize the tax is only 18.4 cents per gallon and the nation's highways are already falling apart financially. NPR's Camila Domonoske explains that while waiving the tax could lower prices at the pump, some savings might get eaten up by refineries and gas stations, so drivers might not see all of that 18 cents. The idea, floated a few weeks ago, was meant to soothe voter frustration over rising gasoline prices driven by the war in Iran, which have hit four-year highs. But actually doing it requires Congress to act, and despite a few bills floating around, nobody's holding their breath for a vote.
Now for the downside - and there's a good one. Reducing the cost of gas encourages people to buy more of it, which could drive prices back up. More fundamentally, the federal highway fund has been running on fumes for years. The gas tax, you see, is broken. It's been stuck at 18.4 cents per gallon for over 30 years - that's cents per gallon, not a percentage, so it doesn't rise with inflation. Meanwhile, road repairs have gotten pricier, cars have gotten more efficient, and people drive a little less per capita. The result? The tax no longer covers highway costs, and it gets worse every year.
Why hasn't the federal government raised it? As Adam Hoffer of the Tax Foundation puts it: "Nobody likes gas taxes. Politicians don't like them. Drivers don't like them. Voters don't like them." Some states have cleverly set their gas taxes to auto-adjust - Florida ties it to inflation, mid-Atlantic states peg it to gas prices - but federally, raising the tax is a political third rail. And there's an even bigger problem brewing: electric vehicles use highways but don't pay gas taxes. As EV adoption grows, revenue will shrink further.
So what's the fix? Some states have higher EV registration fees, but those often charge EV drivers more than gas drivers pay in taxes. Automakers want a vehicle-weight fee - trucks pay more than sedans. Others push road usage fees, where you pay by how far you drive, tracked by odometer or device. Something has to change, because for all the chatter about a holiday, the gas tax is fundamentally doomed anyway. And as NPR's Domonoske notes, nobody likes potholes either.