The National Defense and Highways Act of 1956 created the U.S. interstate highway system. It also created the Highway Trust Fund (HTF), the mechanism by which it intended to fund the construction and future maintenance of the system--primarily via a fuel tax. Congress wanted to implement an effective user fee so that the drivers who used the road paid for its costs and not the general taxpayer.
However, in the last two decades, revenues from the HTF have not been sufficient to pay for the government’s expenditures, and its shortfall gets larger each year. The endemic HTF deficits have compelled Congress to pass a series of short-term funding transfers from general tax funds, including the Bipartisan Infrastructure Law of 2021 and the 2015’s Fixing America’s Surface Transportation Act which transferred over $200 billion of general revenue to the HTF. Despite sizable general fund subsidies, the consensus is that the overall roadway quality across America is low; for instance, the American Society of Civil Engineers (ASCE) gave the condition of the nation’s infrastructure a “C-“ in 2021.
Rather than continue to siphon money from taxpayers to pay for roads we should ask those who benefit the most from our highways--truckers--pay more for using them via a vehicle miles traveled fee. A study I recently published found that such a step would not only benefit taxpayers but it would also reduce congestion and emissions while improving highway safety.
The real value of gas and diesel taxes has plunged
In 2023, the federal government spent $43 billion on roads, yet just $36 billion of that money came from gasoline and diesel taxes--the rest came from general revenue. Congress has declined to increase fuel taxes for over three decades, and the tax remains at 18.4 cents per gallon for ethanol and 24.4 cents per gallon of diesel.
But since 1993, gasoline prices have tripled and consumer prices have more than doubled, and the cost of building roads has gone up significantly as well. However, the contributions of drivers to the Highway Trust Fund have not kept pace: The typical gas-powered car today gets 25 percent better gas mileage than one from three decades ago, and the increasing popularity of electric vehicles (EVs) portends a further erosion in HTF revenues. The Congressional Budget Office forecasts revenue from gasoline and diesel taxes will fall for the next decade and that federal spending on roads will exceed the revenue from fuel taxes by $240 billion over the next decade. Why does Congress effectively use income tax revenue to subsidize truckers?
Trucks create 40 percent of the damage on our nation’s roads with just 10 percent of the miles driven. The Federal Highway Administration determined that large trucks impose a road repair cost averaging 66 cents a mile. Trucks today effectively pay four cents per mile, which is a fraction of the costs they create through their wear and tear.
A VMT on Trucking is the logical place to start fixing the problem
One possible way to make trucks pay something approximating the damage they do to the nation’s roads would be to impose a Vehicle Mile Traveled Fee (VMT). Such a fee could be a simple assessment on each truck for each mile driven, or a per-mile fee that also incorporates the weight of the truck as well as the amount of congestion on the road the truck travels on, to capture the full cost imposed on road users by the vehicle.
A VMT fee on trucks would be quite equitable. First, the shipping industry greatly benefits from a public good--namely, our highway system--without paying much into it, and there is no reason for subsidizing this industry. Second, most trucks already have tracking and detailed mileage reporting already in place which makes the implementation cost for trucking negligible. What’s more, since trucks create far more pavement damage per vehicle mile and there are far fewer large trucks than passenger vehicles, the benefit is high, and administrative cost of a truck-only VMT would be extremely cost-effective.
Finally, because trucks are a commercial undertaking, the commonly-voiced objections that a VMT would create privacy issues are irrelevant.
Continuing to use general tax fund revenue to fund the maintenance of highways--and effectively subsidize shippers--makes no economic sense. Trucks cause road damage, congestion, pollution, noise, and hamper road safety; subsidizing them only creates even more problems.
A Vehicle Miles Traveled fee on trucks would force commercial shippers like Amazon and WalMart to pay their fair share for our nation’s roads and greatly benefit drivers and taxpayers.
