A Fairer Gas Tax

California is trying to decide how—and in fact whether—to adequately fund the huge backlog of overdue road repairs and investment in transit. California Democrats in the legislature have proposed an increase in the gas tax by 12 cents a gallon. With Republicans digging in their heels against any tax, Jerry Brown has proposed a compromise—a package that includes a gas-tax hike of 6 cents. The Governor’s strategy is true to his desire to “paddle a little bit on the right, then a little bit on the left” and hope he goes straight down the middle. This time, a better compromise is possible.


There are two really good reasons for a gas tax. First, to raise revenue, especially for road repairs and other improvements in the lives of road users. Including transit. Second, to discourage the use of fossils fuels. A gas tax should serve both of these goals, and generally it succeeds.  But where it fails it presents significant ethical trouble.


Rural voters have no appetite for a gas tax, and it’s hard to blame them. Where urban drivers have many ways of avoid the heaviest blows of a gas-tax increase, rural voters must take the full brunt. They can’t go out and buy a new, more efficient vehicle, and they can’t switch to other modes like biking or walking or transit.   Asking them to cut back on trips is like asking them to engage in social isolation. Because rural drivers have so few options for cutting back on consumption, the rationale of using a gas-tax to incentivize reduced fossil-fuel consumption doesn’t really doesn’t work, especially in the short run.


This reality of limited alternative options for rural drivers problem is highlighted by economic research, which finds that a 10% increase in the price of gas leads to a 5.8% reduction in use in urban areas, but less than a 1% reduction in use in rural areas. The net effect of the tax increase plus the reduction in use means that the net impact of a gas tax is more than twice as severe for rural drivers as for urban drivers.


Sure, the urban consumers experience some inconvenience from switching modes or consolidating trips, but they also get some health benefits. A recent study at the Center for Health Advancement found robust improvements in health that come from the additional use of active transit iCar-in-water-after-bridge-collapsen response to a gas-tax increase. But this effect is limited to urban areas. By contrast, rural residents not only pay more, but get fewer health benefits. And the benefits for greenhouse gas reductions are much smaller in rural areas as well.


A compromise could equalize the impact by raising the gas tax by different levels – say by 12 cents in the largely urban coastal counties and Sacramento, and by only 6 cents in the largely rural counties of the Central Valley and mountains. This compromise isn’t perfect—after all Fresno is hardly rural, and parts of LA county have long commutes and few transit or biking options. But it’s a better compromise than simply cutting in half the tax necessary to fund needed road repairs.


In exchange, for alleviating some of the pain for rural drivers, urban drivers should get a good chunk of the increase for improvements in transit that will lessen their pain.


Gas taxes—like all taxes—are both necessary and painful. By acknowledging and mitigating the differential burden of gasoline taxes because of different transportation options in different areas, a compromise can be found that is fair for all, yet gives California the revenue it needs for urgent road repair and transit investment. Absent such a compromise, we may find ourselves with failing roads and collapsing bridges. And if our vehicles start to careen into the water below, no amount of paddling on the right or left will help us then.

One thought on “A Fairer Gas Tax

  1. Tyson White says:

    It’s only prudent policy that at a minimum, 100% of the cost of the roads should be covered by vehicle fees and taxes.

    Also, road building and maintenance are only a small portion of the cost. The excessive land use repurposed for automobile use (in urban areas over 75% of the public space is paved for cars), and the serious negative impact on health, the air, and the water are greater and more difficult to quantify.

Leave a Reply

Your email address will not be published. Required fields are marked *