Some people say that the gasoline tax is no longer a viable source of revenue for the highway trust fund because cars are getting better gas mileage. What is the evidence?
Let's play around with statistics on historic gas mileage trends from the EPA:
Appendix B
Car mileage changes over the decade from 1975 to 1985:
1975 13.5 MPG
1985 23.0 MPG
For a 70 % increase in MPG
Car mileage changes over the decade from 2003 to 2013:
2003 23.0 MPG
2013 27.4 MPG
For a 19% increase in MPG
Things to note:
The 1990s were the lost decade for MPG improvement. Cars in 2003 had the
same 23.0 MPG as cars in 1985.
The increase of 17% in the most recent decade was substantially smaller
than the increase of 70% in the earlier decade.
So why is it that the gas tax will no longer work because of recent
increases in MPG, but the gas tax was still able to work after the much larger
increases in MPG from 1975-1985?
Repeating the exercise for Light Trucks:
Light truck mileage changes over the decade from 1975 to 1985:
1975 11.6 MPG
1985 17.5 MPG
For a 51% increase in MPG
Light truck mileage changes over the decade from 2003 to 2013:
2003 16.7 MPG
2013 19.7 MPG
For a 18% increase in MPG
Light truck MPG actually fell over the lost decade of the 1990s.
An increase of 18% in the recent decade, vs. a much larger increase of 51%
in the earlier decade.
Once again, the problem is not the technical feasibility of the gas tax
after the relatively modest increases in gas mileage over the last two decades
compared to the 1975-1985 period. The problem is political will.
Finally, since the last time the Federal gas tax was increased in 1993, inflation has had 3 times the impact on the purchasing power of gas tax revenue as changes in mileage have had. Any revenue source will fail over time if it is not adjusted (automatically or manually) to keep up with inflation.
Consumer Price Index:
1993 144
2013 233
An increase of 62%
