What to Call the Gas Tax: Not Just Semantics
Calling the gas tax a 'user fee' is logically and factually wrong.
I went to the grocery store today and bought an apple. While eating it, I complained that proceeds from the sales tax I paid were used for other things than agricultural support programs.
This made-up anecdote is similar to how highway advocates, who I’ll call “road firsters,” talk about the gas tax, which they erroneously label a “user fee.” Road firsters criticize the planned high-speed rail lines for needing subsidies while saying that the gas tax is actually a user fee, which means roads are self-sufficient. This is logically and factually wrong.
A gas tax might appear to be a user fee at first, because you need gas to drive. But this confuses the meaning of the term.
To qualify as a user fee, you must have a choice as to whether or not you pay it. It also must relate directly to a particular service that you can accept or reject, and to the number of times you use that service.
When it comes to roads, a toll on a highway or bridge is a true user fee. If you don’t want to pay to travel on a limited-access expressway or bridge, you can choose a different route. And every time you use a particular highway or bridge with a toll, you pay a fee. You don’t pay one toll and then use the Golden Gate Bridge as many times as you like.
The same is true about paying a fee to enter a national park. That’s a true user fee. You can choose not use a park if you don’t like the fee.
But pretty much everyone in this country, except for a tiny percentage of people living in cities like New York, have to drive—to jobs, schools and grocery stores. We can’t choose not to buy gas any more than we can choose not to buy food.
Plus, once we pay the gas tax, we have no choice about where the money goes. When I fill up my car with gas, I can’t choose that the tax money goes to repair the potholes on my street instead of the brand new interchange on the other side of the state. However, once I do pay the gas tax, I can use one stretch of road or a bridge as many times as I like with no additional charge. That’s not a user fee. There’s a reason the gas tax is called a tax—because it is one.
Road firsters miss these distinctions. In the Jan. 12 edition of his transportation newsletter, Innovation Briefs, public policy consultant Kenneth Orski wrote, “Pres. Eisenhower’s ambitious plan for the interstate highway system was placed on a sound fiscal basis by being backed by a user fee (a.k.a. the gas tax).” But high-speed rail, “burdens the states with continued operating subsidies.”
Let’s correct that sentence: President Eisenhower put the interstate highway system on a sound fiscal basis by burdening states with a continued operating subsidy for it in the form of the gas tax.
Robert Poole of the Reason Foundation makes a similar mistake when he criticizes taking revenue from the gas tax and using it to fund sidewalks, bike trails and train lines.
“Well, you can either have user fees (under which users pay and the same users benefit—the principle underlying both the aviation and highway trust funds),” Poole wrote last October, “or you can have a giant punchbowl with any number of straws for drinking out of it.”
Road firsters also are wrong when they claim revenues from the gas tax pay for most of the costs of roads. The United States has one of the finest road systems in the world, more than 4 million miles, built over the past 125 years and paid for almost entirely by tax dollars, of which the gas tax is almost certainly just one small portion. The gas tax did not even begin on a federal level until 1932. Congress passed the first Federal Aid Road Act in 1916.
“Gasoline taxes aren’t ‘user fees’ in any meaningful sense of the term,” according to the report, Do Roads Pay For Themselves?, by the U.S. Public Interest Research Groups. “Highways ‘pay for themselves’ less today than ever. Currently highway ‘user fees’ [including the gas tax] pay only about half the cost of building and maintaining the nation’s network of highways, roads and streets.”
Why do all these labels matter? Aren’t they just semantics? No, because labels influence policies. Road firsters say that high-speed trains, light-rail lines and streetcars need subsidies, which proves their illegitimacy. By insisting that gas taxes be called what they are—taxes—and assessing how roads have really been paid for will help keep these debates honest.
For road firsters to insist that trains pay their own way, when roads certainly never did, is not sensible. It puts too heavy a burden on a developing infrastructure system, a burden the road system never had to meet. A tax on steel or electricity, with the revenue primarily funding rail systems, would put it on the same solid footing as road contstruction has been for the last century.