Tuesday, May 02, 2017

Did you know only 20% of the gas tax goes to infrastructure? The rest is wasted in the billionaire boys club known as state and federal politicians budget general fund

The federal gas tax, which was initially signed into law by President Herbert Hoover in 1932, was not originally earmarked for highways or roads projects. The penny a gallon gas tax was intended to help close a spending gap in the federal budget. It was so successful (though not terribly popular) that the government raised the gas tax to 1.5 cents per gallon as part of the National Industrial Recovery Act of 1933. By 1941, the federal gas tax was a permanent fixture in the United States.

With more cars on the road, infrastructure - including building and maintaining those roads - became more of a concern in the mid-1950s. With the Highway Revenue Act of 1956, the gas tax increased from two to three cents per gallon. This time, however, revenue from the tax was diverted to a highway trust fund to pay for roads and maintenance. The trust fund, which was modeled after the Social Security trust fund, remains in place to this day.

In 1990, President George H. W. Bush switched gears and designated a portion of the gas tax to be used for something other than roads. He increased the gas tax by five cents per gallon and earmarked half of the increase for deficit reduction. That strategy continued until 1997, when President Clinton again designated gas taxes to the Highway Trust Fund.

The federal gas tax has remained steady at 18.4 cents per gallon since the Clinton era. However, drivers in some states are paying more for gas in 2017 due to increases in state gas taxes; in at least four of those states, the increased revenue was earmarked for infrastructure improvements.


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