Here's how a 25 cent gas tax increase could affect you

January 23, 2018

Last week, the United States Chamber of Commerce proposed a 25 cent increase in the so-called gas tax. The rise would represent a 135 percent increase over the current 18.4 cent tax, which was set in 1993. Since then, most states have raised their own fuel tax rates, and myriad business leaders and legislators have called for an increase to the federal rate.

While there is no guarantee the rate will actually increase—the phrase “tax hike” is generally caustic if uttered inside the Beltway, after all—the proposal is part of the Chamber’s plan for a comprehensive update of our nation’s infrastructure. If approved, it would impact you at the pump first. Then, theoretically, the rest of your drive would be along updated and improved roadways.

Over 10 years, the revised tax rate would yield $375 billion for infrastructure improvements, according to Chamber estimates. Virtually all of that additional funding, of course, would come from diesel, gasoline, or gasoline-hybrid vehicles.

That doesn’t mean electric vehicle owners would get a pass, however. Because original purpose of the gas tax wasn’t to deter the use of fossil fuels, but rather to pay for infrastructure maintenance, supplemental taxes against electric vehicles likely would be implemented at the same time as the gas tax hike.

In the past, states’ attempts at taxing electrified vehicles to compensate for the loss of gas tax revenue has been met with technical difficulties and public outcry. Some states, like Georgia, for example, even tax EVs at what amounts to a higher rate than traditional gasoline-powered vehicles.

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