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The gas tax has been fixed at 18 cents for two decades. Now would be a great time to raise it

The gas prices are advertised outside the Costco store in Westminster, Colorado (REUTERS/Rick Wilking)

Nationally averaged gas prices ticked down a little lower today -- yet again -- to $2.75 per gallon. They're now more than 50 cents lower than they were a year ago. So no wonder, at a time like this, the murmur is growing: Maybe Congress ought to think about raising the national gasoline tax.

It was last raised, in the year 1993, to 18.4 cents per gallon. That's over 20 years ago, and gas prices at the time were close to the now unimaginable $1.00 per gallon mark. Yet the amount of the gas tax was fixed and not tied to inflation -- so it has not changed since. (U.S. states also charge gasoline taxes; the national average is about 23.5 cents.)

"It’s been a generation since gas taxes were increased at all," says Paul Bledsoe, a senior fellow on energy at the German Marshall Fund. "So they are incredibly low by historic levels."

Meanwhile, the Highway Trust Fund, which depends on these federal gas tax revenues, has seen its revenues fail to match its level of spending for 13 years straight. Not only has the gas tax been fixed for two decades, but vehicles also have become a lot more fuel efficient. That has led to less gasoline use and less gas tax paid per mile driven -- even as alternative fuel vehicles like hybrids have also hit the road.

"You’re ending up with serious reductions in highway fund revenues, and that’s sort of the fundamental reason why we’re having all these infrastructure problems," says Alan Krupnick, co-director of the Center for Energy and Climate Economics at Resources for the Future.

Timing a gas tax increase for a time like right now -- when gas prices have been plunging, and may have further to fall -- would surely be the easiest on consumers. It "would be kind of in the noise," says Krupnick. But it could help address at least three different problems: inadequate highway funding, American's energy habits, and even, perhaps, bipartisan tax reform.

1. Fix Our Highway Infrastructure. It is no secret that the nation’s roads are seriously in need of infrastructure improvements. According to the American Society of Civil Engineers, U.S. roads currently earn a "D" overall. Their “deficiencies,” says the society, cost us $130 billion per year, and we’re currently investing too little to improve them.

The current overall spending level of $91 billion annually on capital investments by state, federal, and local authorities is not enough to prevent continuing declines in road quality, according to ASCE. We need to be spending $ 101 billion per year just to keep pace, and $170 billion per year to actually improve the nation’s roads.

Meanwhile, the federal gas tax is less and less able to cover the cost of all this. According to the Institute on Taxation and Economic Policy, the gas tax has lost "28 percent of its value since 1997" as costs of highway construction and repair have grown, and as vehicle fuel efficiency has increased.

2. Green Our Behavior. Much like a carbon tax, a tax on gasoline can also, of course, make people more judicious in how they use vehicles and energy. A 2011 study by scholars from Resources from the Future and Harvard University found that increases in gasoline taxes have a significantly larger effect on consumer behavior than do mere increases in the retail price of gasoline.

In particular, they found, a one dollar rise in gas prices alone (due to market forces but without any tax increase) would lead to an increase in the average miles per gallon of new vehicles purchased by 3.6 percent. However, a one dollar gasoline tax increase would have a much bigger effect, leading to an increase in the miles per gallon of new vehicles of 47.7 percent.

"The difference between the fuel economy response to tax-exclusive price changes and that to gasoline tax changes is striking," noted the authors, while also admitting that a $ 1.00 gas tax increase is a rather extreme amount, and so the result should considered in that light.

3. Help Us Find Tax Reform Compromise. Most blue sky is the idea that raising the gas tax significantly could provide a major new revenue source that would make tax reform compromise easier. Paul Bledsoe, of the German Marshall Fund, calls the gas tax the "800 pound gorilla of tax policy that suddenly comes back into the spotlight when oil prices drop 30 percent."

The reason is that if we want to cut corporate or income taxes, those revenues to government will have to be replaced -- and "there are very few places you can turn to replace 100 to 200 billion dollars in revenue a year," says Bledsoe. He thinks that ultimately, if there is going to be a grand stroke compromise on tax reform, it may involve someone bringing up the gas tax.

Which merely leaves the matter of politics. Who supports a gas price increase? Broadly speaking, it's something that economic wonks across the spectrum seem to favor, but that politicians loathe (presumably because of the word "tax"). However, Republican Senator John Thune of South Dakota -- slated to be the new chair of the Commerce, Science, and Transportation Committee -- has said he would consider a gas price increase as a way of fixing the Highway Trust Fund in the next Congress. Last year, Democratic Rep. Earl Blumenauer of Oregon also proposed a 15 cent gas tax raise.

So, this is not an argument that a gas tax raise is politically plausible -- any more than a economically efficient tax on carbon would be. It's merely a suggestion that -- ignoring politics -- it might be a pretty good idea.