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1 Alex Muresianu & Jacob Macumber-Rosin, How to Refuel the Highway Trust Fund 1 (2025)

handle is hein.taxfoundation/hwtofful0001 and id is 1 raw text is: TAX FOUNDATION How to Refuel the Highway Trust Fund Alex Muresianu Senior Policy Analyst Jacob Macumber-Rosin Excise Tax Policy Analyst Nov. 2025 Key Findings * The Highway Trust Fund, created in 1956 to finance the Interstate Highway System and other roads through fuel excise taxes, has depended on general revenue transfers for nearly 20 years. * The funding shortfall stems from several trends: the gas tax has not been adjusted for inflation, vehi- cles have become more fuel-efficient, and electric vehicle adoption has grown. Commercial traffic has also underpaid relative to the wear and tear it imposes on highways. * Without reform, highway spending will exceed highway revenue by $17 billion in 2026. The next five- year reauthorization of highway funding, due in September 2026, offers an opportunity to correct the funding imbalance. * Restoring the user-pays principle would make highway funding fiscally responsible and economically efficient. * We present four reform options that could close the 2026 funding gap and move toward a user-based structure. The ideal reform would be replacing existing transportation taxes with a vehicle miles trav- eled (VMT) tax that adjusts by vehicle weight per axle, but short of that, several transitional options could strengthen funding and move closer toward the user-pays principle. * Examples from other countries and US states show that well-designed user fees can fund transporta- tion infrastructure effectively. The Tax Foundation is the worlds 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