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1 Alex Muresianu, et al., Expanding User Fees for Transportation: Roads and beyond 1 (2024)

handle is hein.taxfoundation/egusrfe0001 and id is 1 raw text is: *.TAX FOUNDATION Expanding User Fees for Transportation: Roads and Beyond Alex Muresianu Senior Policy Analyst Adam Hoffer Director of Excise Tax Policy Jacob Macumber-Rosin Policy Analyst Alex Durante Economist August 2024 Key Findings • Thanks to elevated deficits and interest rates, fiscal restraint is back in Washington. • While substantially reversing America's fiscal situation requires structural reforms to entitlements and taxes broadly, reforming transportation funding would also help. • The user-pays principle is a sound way to fund major infrastructure projects. • Unfortunately, the US has moved away from the user-pays model, primarily due to the gas tax declin- ing in real terms, but also due to excise taxes becoming weaker approximations of true user fees. • By 2034, the gas tax and other car-related excise taxes are projected to raise less than half of the Highway Trust Fund's outlays. • The ideal solution would be to replace existing excise taxes with true user fees, but raising existing excise taxes would be a better solution than continuing a growing reliance on general revenue. • Fully paying for federal highway spending with user fees could reduce the federal deficit by over $200 billion over the course of the next decade. The Tax Foundation is the world's leading nonpartisan tax policy 501 (c)(3) nonprofit. For over 80 years, our mission has remained the same: to improve lives through tax policies that lead to greater economic growth and opportunity. TAX FOUNDATION 1325 G STREET, NW, SUITE 950, WASHINGTON, DC 20005 202-464-6200 1 taxfoundation.org