Brief Reforming State Gas Taxes
How States Are (and Are Not) Addressing an Eroding Tax Base
Richard C. Auxier
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The federal government and most states have per-unit gas taxes. Because they tax gallons purchased, and not a percentage of purchase price, revenues are falling across the country as Americans buy less gas. If states do not want to cut transportation projects they now have to increase tax rates or find new revenue sources. This brief examines the national trends affecting gas tax revenues and describes what different states are doing (or not doing) in response to an eroding tax base.
Research Areas Taxes and budgets State and local finance