Ruined roads have long ceased to be a joke – it’s an annual $20 billion deficit for the federal budget, and legislators are looking for new ways to cover it. One idea is a nationwide vehicle fee, which theoretically could lower fuel prices over time. But, like most tax initiatives lately, it is already meeting resistance within its own party.
The initiative was put forward by the chairman of the transportation committee, Sam Graves, who proposes an annual payment for owning and using a car. The amount would depend on the type of vehicle: from $20 for regular passenger cars to $200 for heavy vehicles. Hybrids would fall in the middle at $100. According to Graves, the ultimate goal is to completely replace the federal fuel tax.
“Nearly 40 states already have similar fees. It’s time for the federal government to introduce a fee for electric vehicles, which for years have not paid taxes on gasoline or diesel – the main source of revenue for the Highway Trust Fund,” Graves stated. He also emphasized that fuel tax rates have not changed since 1993, which, due to the lack of indexing to inflation, has led to a loss of about $480 billion in revenue.
Interestingly, under this proposal, EV owners would effectively pay the equivalent of approximately 1,111 gallons of fuel annually (based on the federal tax of $0.18 per gallon). For comparison: according to the Energy Information Administration, a regular car consumes about 430 gallons of gasoline per year. Thus, electric vehicle owners would face disproportionately high costs.
Not Everyone Supports It
However, the initiative may not find enough support. Chip Roy spoke out sharply against it: “Have you lost your minds? The party of limited government is proposing a car tax? I was told: ‘Don’t worry, we’ll repeal it later in the transportation bill’. According to Roy, this tax is just a “gimmick for funding, and everyone knows that no one will actually pay it”.
After calculations, it turned out that the proposal could cost Americans $7 billion annually, reducing the debt by the same amount. However, the same bill provides for a significant tax cut for the wealthiest citizens. Over 10 years, the top 0.1% of the wealthiest would receive an average tax break of $278 thousand.
Whether this proposal is a genuine attempt to modernize road funding or just a political illusion – it raises an important question: who should pay for the restoration of infrastructure in an era of technological change and an uneven tax system? If the answer involves punishing the transition to electric vehicles while preserving benefits for the wealthy, this path will be far from ideal.
Featured image: Senator Graves / Lucid