Every day, Thomson Reuters touches millions of automobile aficionados around the world, including people who design vehicles, regulate their safety, invest in automakers, provide tax advice to them, sue and defend manufacturers and suppliers, and, in the case of the 2015 Frankfurt Auto Show which is currently underway, marvel at the sleek lines, speed and agility of the concept cars that offer unique and wonderful views of a future of which we all want to be a part. Over the past few days, we have been running a series of blog posts that will provide glimpses into the professional lives of our customers touching the auto industry, through proprietary data, insights and expert analysis that only Thomson Reuters can deliver.
Improving fuel economy means less gas tax revenues, requiring new policy options for highway funding
The Highway Trust Fund was nearly shut down this summer. The Fund, which was established in 1956 to finance the U.S. interstate highway system, is currently used to mend bridges, widen lanes and patch the potholes that have been eating up your tires since the winter. With Congress unable to agree on a plan for extending it before the July 31 deadline, a last-minute three-month extension was passed that will keep the Fund up and running through the new October 29 deadline.
The reason for the stalemate: a heated battle over where the money will come from. So far, proposed plans for generating ongoing revenue for the Highway Trust Fund have ranged from selling barrels of oil from the Strategic Petroleum Reserve and lowering the dividend paid to banks who are members of the Federal Reserve System to alternative approaches such as a one-time tax on corporations’ offshore profits.
As of right now, with the clock ticking ever closer to the new Highway Trust Fund expiration deadline, critics have already started to wonder whether lawmakers will have enough time to start thinking about some real solutions to the nation’s infrastructure woes.
Increasingly, though, it seems that traditional means of taxing fuel aren’t going to cut it. Why? Cars are becoming so efficient that traditional means of generating revenue by taxing fuel consumption are becoming less viable. (more…)