• Home
  • Latest
  • Fortune 500
  • Finance
  • Tech
  • Leadership
  • Lifestyle
  • Rankings
  • Multimedia

Trendingnow

1

Pentagon accuses Alibaba, Baidu and BYD, three of China's biggest companies, of supporting the Chinese military

2

'We are rapidly running out of time': Watchdog sounds Social Security alarm after 22% cut confirmed for 2032

3

Costco CEO Ron Vachris rose from forklift driver to the C-suite without a college degree: ‘Don’t chase a title’ is the career advice that got him there

1

Pentagon accuses Alibaba, Baidu and BYD, three of China's biggest companies, of supporting the Chinese military

2

'We are rapidly running out of time': Watchdog sounds Social Security alarm after 22% cut confirmed for 2032

3

Costco CEO Ron Vachris rose from forklift driver to the C-suite without a college degree: ‘Don’t chase a title’ is the career advice that got him there
gas

As gas prices go down, likelihood of higher gas taxes goes up

By
Money
Money
Down Arrow Button Icon
By
Money
Money
Down Arrow Button Icon
December 8, 2014, 10:58 AM ET
Exxon Mobil Corp. Gas Stations Ahead Of Earnings Figures
A customer fuels a vehicle at a Mobil gas station in Peoria, Illinois, U.S., on Wednesday, Oct. 29, 2014. Exxon Mobil Corp. is scheduled to report quarterly earnings on Oct. 31. Photographer: Daniel Acker/Bloomberg via Getty ImagesPhotograph by Daniel Acker — Bloomberg via Getty Images

This post is in partnership with Time. The article below was originally published at Money.com.

By Brad Tuttle, Money

Raising taxes is never popular. But if there was ever a way to make a tax increase more palatable to Americans, it would be with a tax hike that didn’t seem like much of a tax hike. Like, say, one that was optimally planned so that even after the tax increase was instituted, the average household wouldn’t feel like it was paying much more out of pocket than it was in the recent past.

Just such a rare opportunity is now upon us. Gas prices have plummeted—dipping under $2 per gallon in some markets, with further decreases likely—and some want to take advantage of the situation by jacking up the gas tax at both the state and federal levels. Depending on how high taxes are raised, drivers might very well still be paying less to fill up than they were a few months or a year ago. So in a way, at least theoretically, this is a tax hike that wouldn’t feel like a typical tax hike.

A recent Washington Post column pointed out that the federal gas tax has been stuck at a flat 18.4¢ since 1993. At the time, the price of a gallon of regular was about $1. “It’s been a generation since gas taxes were increased at all,” Paul Bledsoe, a senior fellow on energy at the German Marshall Fund, told the Post. “So they are incredibly low by historic levels.”

Over the years, many have called for increases to the federal gas tax, which has not kept up with inflation. “Inflation has effectively reduced the [gas] tax rate by about one third” over the last two decades, the nonpartisan Tax Foundation noted earlier this year. Most states have flat gas taxes as well, and critics say the revenues collected are falling well short of what’s needed to address our nation’s crumbling infrastructure. “At the state and local levels, gas taxes cover less than half of state and local transportation spending,” said Tax Foundation economist Joseph Henchman.

Again, there’s nothing really new about calls to raise more funds to fix roads and other infrastructure needs at the national and state levels. What is new, however, is that gas is the cheapest it’s been in years, and that projections indicate per-gallon prices will remain well under $3 indefinitely. Predictions call for a national average of $2.94 per gallon next year, which would be roughly 45¢ less than 2014 and 70¢ less what drivers typically paid in 2012.

Hence the fresh push to raise gas taxes while prices at the pump are inexpensive. As Elaine S. Povich of the Pew Charitable Trusts observed recently:

“Cheap gasoline makes such levies more politically palatable, since consumers are less likely to notice the extra burden when they are filling up.”

It must be noted that while the federal gas tax hasn’t budged in two decades, state gas taxes (and other local taxes that help support roads and infrastructure) have been increased fairly regularly. Pennsylvania, Wyoming, and West Virginia are among the states where gas taxes were hiked this year or last, and discussions are in the works to raise state gas taxes in Iowa, Utah, Michigan, New Jersey, Oregon, and beyond. Data from the American Petroleum Institute shows that nationally, drivers pay an average of 49.28¢ per gallon when state and federal levies are added up.

While it’s unsurprising that environmental supporters and academics such as Mississippi State’s Sid Salter are renewing cries for gas tax hikes while gas prices are cheap, it’s particularly noteworthy that some Republicans seem in favor of tax increases at this opportune moment in time as well.

Last month, U.S. Sen. John Thune (R-SD) actually criticized President Obama for refusing to consider a gas tax increase over the years. “I always thought that was ironic, that he’s willing to raise every other tax,” Thune said to the Rapid City Journal. “And then the one that actually pays for something you can see a direct benefit from, he doesn’t want to talk about it.”

More recently, Congressman Tom Petri (R-WI), who is retiring soon, it must be noted, announced he is sponsoring a bill to raise the federal gas tax by 15¢ to 33¢ by 2013. “No one likes taxes,” Petri said in a Huffington Post interview in early December:

“But the issue is whether we should pay for transportation, or cut back on spending and transportation and have less roads and poorer infrastructure, or borrow it from our kids — debt financing it and hoping someone pays the debt off at a future date. And of those choices, it seems to me that the most responsible long-term approach is to do the thing that is unpopular but necessary.”

It helps that the move won’t be quite as unpopular as it would be had the gas tax hike been introduced back when the average driver was paying $3.50 or $3.75 per gallon.

About the Author
By Money
See full bioRight Arrow Button Icon

Latest in

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025

Most Popular

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Fortune Secondary Logo
Rankings
  • 100 Best Companies
  • Fortune 500
  • Global 500
  • Fortune 500 Europe
  • Most Powerful Women
  • World's Most Admired Companies
  • See All Rankings
  • Lists Calendar
Sections
  • Finance
  • Fortune Crypto
  • Features
  • Leadership
  • Health
  • Commentary
  • Success
  • Retail
  • Mpw
  • Tech
  • Lifestyle
  • CEO Initiative
  • Asia
  • Politics
  • Conferences
  • Europe
  • Newsletters
  • Personal Finance
  • Environment
  • Magazine
  • Education
Customer Support
  • Frequently Asked Questions
  • Customer Service Portal
  • Privacy Policy
  • Terms Of Use
  • Single Issues For Purchase
  • International Print
Commercial Services
  • Advertising
  • Fortune Brand Studio
  • Fortune Analytics
  • Fortune Conferences
  • Business Development
  • Group Subscriptions
About Us
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • Facebook icon
  • Twitter icon
  • LinkedIn icon
  • Instagram icon
  • Pinterest icon

Latest in

America’s emergency oil reserve is about to hit its lowest level since Reagan was in office
EnergyIran
America’s emergency oil reserve is about to hit its lowest level since Reagan was in office
By Jordan BlumJune 10, 2026
1 hour ago
Mortgage rates today, June 10, 2026
Personal Financemortgages
Mortgage rates today, June 10, 2026
By Glen Luke FlanaganJune 10, 2026
1 hour ago
Current refi mortgage rates report for June 10, 2026
Personal FinanceReal Estate
Current refi mortgage rates report for June 10, 2026
By Glen Luke FlanaganJune 10, 2026
1 hour ago
Current ARM mortgage rates report for June 10, 2026
Personal FinanceReal Estate
Current ARM mortgage rates report for June 10, 2026
By Glen Luke FlanaganJune 10, 2026
1 hour ago
A $7 billion horse race: Goldman Sachs and Morgan Stanley battle for ‘lead left’ position ahead of OpenAI and Anthropic IPOs
Startups & VentureFinance
A $7 billion horse race: Goldman Sachs and Morgan Stanley battle for ‘lead left’ position ahead of OpenAI and Anthropic IPOs
By Shawn TullyJune 10, 2026
1 hour ago
Visa’s CFO downplays the importance of stablecoin and agentic commerce to the U.S. payments giant—at least in the short term
Bankingdigital and mobile payments
Visa’s CFO downplays the importance of stablecoin and agentic commerce to the U.S. payments giant—at least in the short term
By Angelica AngJune 10, 2026
1 hour ago

Most Popular

Pentagon accuses Alibaba, Baidu and BYD, three of China's biggest companies, of supporting the Chinese military
Asia
Pentagon accuses Alibaba, Baidu and BYD, three of China's biggest companies, of supporting the Chinese military
By Kate O'Keeffe and BloombergJune 8, 2026
1 day ago
'We are rapidly running out of time': Watchdog sounds Social Security alarm after 22% cut confirmed for 2032
Economy
'We are rapidly running out of time': Watchdog sounds Social Security alarm after 22% cut confirmed for 2032
By Nick LichtenbergJune 9, 2026
15 hours ago
Costco CEO Ron Vachris rose from forklift driver to the C-suite without a college degree: ‘Don’t chase a title’ is the career advice that got him there
Success
Costco CEO Ron Vachris rose from forklift driver to the C-suite without a college degree: ‘Don’t chase a title’ is the career advice that got him there
By Preston ForeJune 8, 2026
2 days ago
Trump, who has repeatedly called climate change fake, is now threatening Brazil with tariffs over the deforestation of the Amazon
Environment
Trump, who has repeatedly called climate change fake, is now threatening Brazil with tariffs over the deforestation of the Amazon
By Sasha RogelbergJune 8, 2026
1 day ago
Current price of oil as of June 8, 2026
Personal Finance
Current price of oil as of June 8, 2026
By Joseph HostetlerJune 8, 2026
2 days ago
Current price of oil as of June 9, 2026
Personal Finance
Current price of oil as of June 9, 2026
By Joseph HostetlerJune 9, 2026
19 hours ago

© 2026 Fortune Media IP Limited. All Rights Reserved. Use of this site constitutes acceptance of our Terms of Use and Privacy Policy | CA Notice at Collection and Privacy Notice | Do Not Sell/Share My Personal Information
FORTUNE is a trademark of Fortune Media IP Limited, registered in the U.S. and other countries. FORTUNE may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.