The Federal Gas Tax Needs to Go! Defending The Logical.

Dave Durand - Contributor

Last week, I refuted three of the commonly given (yet still asinine) reasons to KEEP the federal gas tax, which is set to expire on September 30^th. Some may say it’s easier to argue against an established position rather than come up with a convincing argument to support a position of your own. Indulge me, if you will, as I take this opportunity to put my money where my mouth is and give you my three reasons why the federal gas tax should EXPIRE.                 

#1 – The transportation needs of one state will no longer be subsidized by taxes of another.

Remember that the federal gas tax is collected at the state level, sent to Washington D.C., and then sent back to the states for spending on transportation projects.

Not surprisingly, once Washington D.C. gets its hands on your money, there is a tendency to dole out special favors to politically connected constituencies. Transportation projects are no exception, and many states actually get back more money than they collected from the gas tax. Others, then, receive back less than they collected.

For example, in 2008, North Carolina only received back 0.877% of every dollar collected from the federal gas tax. Conversely, Arkansas received back 1.110% of every dollar collected from the federal gas tax. Good for Arkansas, bad for the North Carolina. You can check the data HERE.

However, the GAO (Government Accountability Office) will argue that every state receives back MORE than they contribute to the Highway Trust Fund. 

Wait… what? 

Can the federal government turn 7 loaves and a few fish into a meal for thousands with baskets of food to spare? 

Something doesn’t add up.

What the GAO meant to say is that the Highway Trust Fund spends more than it takes in. It can do this because the Department of Transportation is allowed to raid the general tax funds when it wants to spend irresponsibly. Good thing the entire federal government doesn’t spend more than it takes in or we would be in quite a pickle.

#2 – Washington DC will no longer dictate behavior through extortion.

Like a good control freak, the central planners will only portion out certain Highway Trust Fund money if the states behave in an appropriate manner. Typically, a federal law is passed, and the states are given three years to roll over… sorry … I mean“comply”. If they don’t obey, they don’t get their money back. After all, you can’t actually expect your state and local representatives to spend your tax dollars wisely. It takes a federal bureaucrat to guide us. Want a few examples?

In 1984, 26 states set their drinking age at 18. The same year, Congress “found” the constitutional authority to mandate the minimum drinking age of 21. Just 3 years later, all 50 states had a minimum drinking age of 21, and they were rewarded by getting their own money back.

In 1995, 26 states did not have a zero alcohol tolerance law for drivers under the age of 21. The same year, Congress “found” the constitutional authority to mandate a zero alcohol tolerance law for drivers under the age of 21. Just 3 years later, all 50 states had a zero tolerance law for drivers under the age of 21, and they were rewarded by getting their own money back.

In 2000, 31 states set the legal blood alcohol level above .08%. The same year, Congress “found” the constitutional authority to set the maximum legal blood alcohol level at .08%. In just 5 years, every state had set their maximum legal blood alcohol level at .08%, and they were rewarded by getting their own money back.

Some of these laws may very well be the smart thing to do, but just because a broken clock is right twice a day doesn’t mean states should give their autonomy over the Washington D.C. Some states do stick to their guns against federal attempts to mandate helmet, primary seatbelt, and texting laws, but most are more than happy to bend over and

… well whatever.

This tendency for states to acquiesce is leading to even more problems. There is now a push in Washington D.C. to mandate Highway Trust Fund money to be diverted solely to public transportation projects. States will be required to use up to 25% of the returned funds to establish or maintain Mass Transit programs, or even worse, High Speed Rail (HSR) projects. Like all mass transit, HSR boondoggles cost billions up front, cost millions more in operating subsidies, and are used very little by the general public. Hence extortion is the name of the game.

#3 – Keep the power in your hands and your money in your pocket.

In almost every circumstance, reducing the scope and influence of government is a good thing. If taxes are indeed necessary, you should demand expanded access to those voting to deprive you of your hard earned money. Keeping the federal government out of transportation is one good step.

Besides, if your state is responsible with its resources (excuse me… your money), they may choose to maintain the current state gas tax and continue to provide the same level of transportation “services”. Some states, I suspect, will go ahead and raise their gas tax to up to the federal level so they can continue to squander your money on projects that favor certain constituents. The beauty in either case is that your state/county representative is a lot closer to you that your Senator or Congressman. You and your neighbors have much more control over state and local government than you will ever have over the federal behemoth.

So I say let the federal gas tax die and see if anyone notices! Are you worried?