The gas tax is an ideal carbon tax. Based on the volume of gas purchased, the gas tax provides an incentive to use fewer gallons by using a smaller vehicle with better gas mileage, carpooling, using public mass transit, or making fewer and shorter trips. At $2.50 per gallon about 27% goes to maintain and build the roads and 73% goes to run your car. This a good deal!
In Washington State, the gas tax has the added advantage of being protected by the 18th Amendment of the State Constitution which requires it to be used “for highway purposes.” Electric vehicle owners pay $150 annually to make up for the gas tax not paid.
The gas tax has two additional features, one good and one not so good: 1.) It has an incredibly low cost to collect because the gas tax is collected at the refinery, not at the gas pump; the state collects over $2 billion of tax per year with very few invoices and 2). It is not connected to inflation as it is a pennies per gallon sold tax, meaning that the revenue only goes up when more gallons are sold or the legislature changes the rate of the tax (currently at $0.494 per gallon state tax plus $0.184 per gallon federal tax).
The average Washington family buys about 500 gallons of gas for each vehicle a year paying about $350 a year in state and federal gas tax, weight fees and the $30 license tab fee. This means that for about $1 a day you get to use any non-tolled road or street in America. This is an enormous deal! We are paying a minimal amount for roads and the price does not go up with inflation.
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