The Pilot Would Study the Feasibility of Replacing Federal Fuel Taxes
WASHINGTON, D.C., January 30, 2019 – The American Consumer Institute Center for Citizen Research (ACI) released today a ConsumerGram that analyzes the use of an alternative funding mechanism for the Highway Trust Fund.
America’s roads and highways are becoming increasingly congested and structurally deficient. Since the 1920s, fuel taxes have been the primary source of funding for federal highway projects. But as the fuel efficiency of vehicles has improved, combined with increased commercial use of highways and the rise of electric vehicles, revenues from fuel taxes have stagnated, endangering the solvency of the Highway Trust Fund.
To achieve long-term revenue sustainably, one possible alternative to the fuel tax is a “vehicle miles traveled” (VMT) fee, which charges drivers a rate based on the number of miles they travel rather than on the amount of fuel they use. Economic analysis reveals that a VMT is a more effective and efficient mechanism for generating highway funding than the current Federal fuel tax.
Our analysis recommends that Congress launch a pilot program to study the feasibility of transitioning from fuel taxes to national VMT fees. To learn more about the issue and what Congress should do, download the ConsumerGram, or visit the American Consumer Institute.
About ACI: The American Consumer Institute Center for Citizen Research is a 501(c)(3) nonprofit educational and research organization. The Institute focuses its work on economic policy issues that affect society as a whole.
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