Revisiting the Fuel Tax–Based Transportation Funding System in the United States

Increasing concerns are noted over the current transportation funding system based on fuel taxes, but there has been little scholarly literature that evaluates the fuel tax system in a comprehensive manner. As a synthesis, this article reviews the background of fuel taxes designated for transportation and examines issues related to the fuel taxes with four tax-evaluation principles, including economic efficiency, social equity, revenue adequacy, and political and administrative feasibility. Although the analysis does not indicate an absolute denial of fuel taxes as a revenue source to support transportation, it shows that the current transportation funding system based on fuel taxes is no longer sustainable with the rapid erosion of fuel tax base.