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January 15, 2015

How the Gas Tax Is Spent

The Wall Street Journal editorializes that Congress shouldn’t raise the gas tax as some are advocating – it should abolish the tax. The primary reason, the Journal says, is how the Highway Trust Fund is completely misappropriated: “[S]ince the 1990s, the Highway Trust Fund has come to fund much more than new roads and bridges and highway maintenance, abandoning the original ‘user pays’ principle behind a gas tax. Drivers now see about a quarter of their gas taxes diverted to subsidize mass transit in merely six metro areas and sundry other programs for street cars, ferries, sidewalks, bike lanes, hiking trails, urban planning and even landscaping nationwide. Trolley riders, et al., contribute nothing to the HTF. Federal spending on such side projects has increased 38% since 2008, while highway spending is flat. Here’s what the politicians won’t say: Simply using the taxes that are supposed to pay for highways to, well, pay for highways makes the HTF 98% solvent for the next decade, no tax increase necessary.” The gas tax in user-pays concept is fine, but allowing the HTF to become a political goodie bag is bad practice. Unfortunately, that’s exactly how Washington works. More…

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