America's Gas Tax Could Increase After 28 Years

Government / Comments

The new Biden administration has big plans.

Change is constant and it's important for nations to adapt to the times for endless reasons. In the US, one of those changes could potentially involve a gasoline tax increase, something that hasn't happened since 1993. During his US Senate confirmation hearing last Thursday, Pete Buttigieg, President Biden's nominee for Transportation Secretary, stated that he's open to the possibility of raising the gas tax in order to help fun major new infrastructure projects.

"We need to look at any responsible, viable revenue mechanism we can all agree on," said the former mayor of South Bend, Indiana. Senator Mike Lee of Utah directly asked Buttigieg whether that revenue could include gasoline tax hikes, with Buttigieg responding: "It's possible - certainly many states have taken that step including my own - but it's not the only approach."

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It didn't take long for gas tax increase critics to speak up, and Buttigieg's spokesperson quickly clarified his remarks. "A variety of options need to be on the table to ensure we can invest in our highways and create jobs, but increasing the gas tax is not among them," he said. The gas tax has remained at 18.4 cents-per-gallon for the past 28 years. However, that tax is now only worth 10.2 cents when adjusted for inflation.

"There are several different models," Buttigieg added. "In the short- to medium-term, that could include revisiting the gas tax, adjusting it, and or connecting it to inflation."

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Biden is tasking with Buttigieg to initiate a drastic overhaul of the country's transportation infrastructure, including increasing the number of electric vehicle charging stations. Biden and Buttigieg are fully aware combustion engine vehicles and gas-guzzlers like the Ford Mustang Shelby GT500 are on borrowed time, and EVs like the Ford Mustang Mach-E (and an EV-only Mustang in 2028?) are the future. The time to prepare and invest in earnest is now.

In the long term, Buttigieg pointed out, that "as vehicles become more efficient and we pursue electrification, sooner or later there will be questions about whether the gas tax can be effective at all."

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