Title: Vehicle Miles Traveled (VMT) Tax | Highway Funding | Tax Foundation
Headings: Who Will Pay for the Roads?
Who Will Pay for the Roads?
Table of Contents
Key Findings
Introduction
A Well-Designed Tax?
Figure 1.
Stay Informed on Tax Policy Research and Analysis
Letting the Numbers Speak
Figure 2.
Figure 3.
Figure 4.
Figure 5.
Figure 6.
Figure 7.
Taxing by Vehicle Miles Traveled
The “Simple” Solution
GPS Tracking
Privacy Concerns
Table 1. Options for Implementation
What Can Be Done in The Short Term?
Matching Federal Outlays Would Result in Federal Rate Increase
Table 2. Example of Differentiated Tax Rate for Different Vehicle Types
How Roads Are Funded Today
Table 3. Minimum Amount of State Highway Spending Funded by General State Taxes and Fees, Fiscal Year 2017
Figure 8.
Table 4. Federal Government Subsidizes State Highway Spending with more than $40 Billion
Conclusion
Appendix: State VMT Tax Rates
Was this page helpful to you?
Topics
Tags

Content: While 36 states have increased motor fuel tax rates over the last decade, the federal government has not updated the gas tax since 1993. [ 2] With the current funding program, the Fixing America’s Surface Transportation Act (FAST Act), expiring this year, Congress must decide how to pay for the Highway Trust Fund in the years to come. Revenue from the federal motor fuel tax will not fund projected spending at the current tax rate, so the only options for lawmakers are to either appropriate general fund money or increase taxes. According to Congressional Budget Office (CBO) estimates, the Highway Trust Fund will run out of money by the end of 2021 and the deficit is projected to be almost $70 billion over the first years after the FAST Act funding expires. [ 3]
Ideally, funding should come from the beneficiaries of the system, which is another way of saying that the people who drive on the roads should fund the roads. This is no new idea; it simply represents a return to tradition. President Ronald Reagan once observed that “ [o]ur country’s outstanding highway system was built on the user fee principle—that those who benefit from a use should share in its cost.” [ 4] The technological developments, mentioned above, mean the time may have come for lawmakers to revisit who should pay for the roads, and how they should do so. If it is still policymakers’ aim to fund transportation with taxes levied on transportation, change is needed.