With fuel prices on the decline, is this the right time to implement an increase in our federal fuel tax?
If you're like me, you don't want to see any increase in any tax. However, at the same time I realize that nothing comes for free and we all have to pay our way. The last fuel increase was in 1993 and hasn't changed since. Cars and commercial trucks have all increased in fuel mileage and costs for repairing/building our roads has gone up. Federal tax on gasoline is 18.4 cents per gallon and 24.4 cents per gallon for diesel fuel and has not been indexed to keep up with inflation.
I did some research and found that all of the major trucking associations support and increase in the federal fuel tax to pay for infrastructure. A few of the organizations supporting a fuel tax increase are the American Trucking Association. Truckload Carrier Association and the Owner Operator Independent Driver Association. The fact that all three of these organizations support this cause should tell us something. In support of these trucking associations, we should do our part and contact our congressmen and senators in order to make our voices heard on this issue.
Another interesting figure I came across from the Alliance for American Competitiveness stated that every dollar spent on infrastructure investment over a two year period generates $1.92 in economic output. Over the course of 20 years, that dollar will amount to $3.21 in output. Where else does our federal government get such a return on its investment? Some of you may say that we are paying enough in taxes to take care of our highways. The other issue is the amount of waste/fraud in their spending. I agree with stamping out all fraud and wasteful spending, however I'm sure there was fraud in 1932 as well. The first federal fuel tax was in 1932 and it was 1 cent per gallon at a time when the average price of fuel was 10 cents per gallon. Looking at inflation and indexing the tax to the cost of fuel today the federal fuel tax would cost approximately 35 cents.
The longer we put off repairing, replacing and expanding our nations infrastructure, the more it will cost us in the long run. After all, we are talking about our nations economic backbone. It's currently falling apart and needs serious help. As things stand now, it takes additional time to complete our trips and is increasing the cost of our equipment.
In closing, again I ask... is this the time to raise the federal fuel tax? remember increased fuel price is the simplest cost for us to pass on in the form of fuel surcharge. Below, I've placed a link from a previous blog which I did on this very subject. You can also read the additional links below which show support for a fuel tax increase from various trucking associations.