NCPA - National Center for Policy Analysis


October 26, 2006

Missing from N. Gregory Mankiw's interesting proposal to raise the federal gasoline tax by $1 over the next 10 years ("Raise the Gas Tax," editorial page, Wall Street Journal Oct. 20) is any context or explanation of why the tax is collected in the first place, says Matthew J. Jeanneret, Senior Vice President of Communications & Marketing for the American Road & Transportation Builders Association.

  • It generates dedicated revenue for the Highway Trust Fund that is used solely for transportation programs. 
  • The federal gas tax finances almost 45 percent of all public investments in road improvements each year.
  • Prof. Mankiw says boosting the gas tax would get people out of their cars and force them to live closer to where they work, thereby reducing road congestion.
  • Yet there is no evidence to suggest this would happen based on the most current Census Bureau data.
  • More than 80 percent of commuters drive to work alone and that trend will continue in the future.

To much fanfare, the U.S. population officially reached 300 million Oct. 17, and is expected to reach 400 million by 2043.  America's highways, bridges and transit systems are now crumbling because of years of under-investment by all levels of government, says Jeanneret.

  • Between now and 2043, based on current trends, highway capacity will grow only 9 percent, but traffic levels will swell by 135 percent to more than seven trillion vehicle miles traveled annually.
  • The average motorist can expect to spend 160 hours stuck in traffic delays, or the equivalent of four weeks each year.

It's a recipe for a gridlocked nation, absent any new highway and transit investment that adds major new capacity, says Jeanneret.

Source: Matthew J. Jeanneret, "Letter to the Editor: Higher Gas Taxes Will Never Make Americans Abandon Their Cares," Wall Street Journal, October 26, 2006; and N. Gregory Mankiw, "Raise the Gas Tax," Wall Street Journal, October 20, 2006.

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