100 years on, gas taxes need reform

For decades, gas taxes have been the root of the problem. Now, let them be a solution.

Lesley Becker/Lesley Becker/Globe Staff; Adobe

What a century it’s been for the gas tax, the much-scrutinized road-funding fee that celebrates its hundredth birthday this year. Enacted by the state of Oregon in February 1919, then embraced by every state and the federal government over the following decades, it helped finance the gargantuan infrastructure that gave rise to automobility and remade American life.

But now the program faces two existential challenges. First, as Massachusetts and other states debate a regional “green” gas tax to fund sustainable transportation, they threaten to upend the entire structure of the program.

Second, electric vehicles do not use gas, and fuel economy improvements for gas-powered cars are poised to melt away this hulking glacier of money for road projects. It’s only a matter of time before the fee that helped build American road infrastructure vanishes altogether.


Good riddance.

It’s not that Americans should not pay taxes on gasoline — they should. But in an era of climate crisis and crippling traffic, the gas tax creates as many problems as it solves.

Gas taxes funnel money into a rotten system: the highway-industrial complex, a coalition of construction, auto, real estate, and other interests that demand a never-ending list of carbon-spewing new highways and widened roads, regardless of merit. Gas taxes pay for highways, which spur more driving, which swells gas-tax revenue, which then pays for more highways. Raising the gas tax without overhauling the system, as 31 states have done since 2013, only entrenches this vicious cycle.

Rather than prop up a faltering system, we can fundamentally change it.

For decades, state and federal gas taxes funded the bulk of the nation’s roads, from rural highways that brought farmers out of isolation in the 1920s to midcentury interstates that carved through cities and enabled mass suburbanization. But over the course of the 20th century, this funding spigot overwhelmed transportation policy-making. A recent Transportation for America report shows states built so many unneeded roads they cannot afford to maintain them. Road networks have grown so unwieldy that gas taxes now fund less than half of their cost.


Gas taxes provide an automatic source of funds, with most reflexively routed to roads and highways. A smaller portion goes to transit and other uses. As a result, much highway funding bypasses debate.

The funds also get spent according to flimsy logic. Highway boosters say road expansion fixes congestion, and thus benefits the environment. They argue car traffic behaves like a liquid: a constant flow that becomes less dense with more space. In fact, it behaves more like a gas, expanding to fill the space given to it. Widened highways soon attract cars seeking quicker routes. The phenomenon, known as induced demand, is so widely recognized that economists call it a fundamental law of congestion.

As a result, traffic and emissions grow as road capacity grows. Each new mile of six-lane highway pumps out 600,000 tons of carbon dioxide over its lifespan, according to the Sightline Institute — equivalent to 9,000 flights between New York and Los Angeles. No wonder transportation in the US generates more greenhouse gas emissions than any other sector.

Thankfully, we can turn this cycle around. The “green” gas tax, with revenue directed toward sustainable transportation, is a start. But existing state and federal gas taxes must also be reformed.


State leaders should treat gas taxes as a carbon tax, a tool to reduce emissions. Under this framework, using gas taxes to build highways is akin to using cigarette-tax proceeds to plant tobacco fields. Instead, direct real money to high-quality transit, safe cycling facilities, and robust pedestrian infrastructure that will lessen people’s need to drive, and clear space for drivers who have no other choice.

Give more autonomy and funding to cities, which tend to be more forward-thinking on transportation than state governments. Dense urban areas are the most fertile ground to strengthen non-driving transportation options.

Finally, stop building roads where they aren’t needed.

Induced demand can work in a productive direction. Sensible road infrastructure and humane streets can lure people out of cars, save money, and build more sustainable cities.

For decades, gas taxes have been the root of the problem. Now, let them be a solution.

Samuel Kling is a fellow on global cities at the Chicago Council on Global Affairs. Lucas Stephens is a fellow at the American Council of Learned Societies.