Should Congress Raise the Federal Gas Tax?


The Federal Gasoline Tax was first introduced in 1932 and was assessed at one cent per gallon. It was extended and increased several times in the next two decades to help the U.S. government meet its financial obligations, including the costs of World War II and the Korean War. President Eisenhower signed the Federal-Aid Highway Act of 1956, which provided the basis for the construction of the interstate highway system. This act raised the gas tax to three cents per gallon and all of the money was dedicated to the Highway Trust Fund. This fund is the primary source of funding for federal road construction and maintenance.

To keep up with an expanding population and increasing transportation needs, the tax was raised several times over the following decades. At times, portions of the tax have also been used for other government needs, including deficit reduction. The most recent increase in the gas tax was signed by President Clinton as a part of the Omnibus Budget Reconciliation Act of 1993. This act increased the federal gas tax to 18.4 cents per gallon. Since 1997, the full amount of the Federal Gasoline Tax has gone to the Highway Trust Fund. This tax has not been raised since 1993.

The resources of the Federal Highway Trust Fund are subject to fuel prices, with lower prices resulting in less tax revenue. The Fund is also subject to consumer preferences, as increased use of electric vehicles lowers nationwide fuel demand. These two factors, among others, continue the debate over whether Congress should raise the federal gas tax.

Objectives and Outcomes

  • Students will be able to understand and be able to use vocabulary regarding the Federal Gasoline Tax and the Highway Trust Fund.

  • Students will be able to summarize and evaluate competing positions supporting or opposing increases in the federal gas tax.

  • Students will practice the dispositions of effective citizens by participating in a deliberation about what Congress and the President should do regarding increasing the federal gas tax.