Federal Excise Tax on Gasoline and the Highway Trust Fund: A Short History [September 2, 2011]   [open pdf - 281KB]

"Excise taxes have long been a part of our country's revenue history. In the field of gasoline taxation, the states led the way with Oregon enacting the first tax on motor fuels in 1919. By 1932, all states and the District of Columbia had followed suit with tax rates that ranged between two and seven cents per gallon. The federal government first imposed its excise tax on gasoline at a one-cent per gallon rate in 1932. The gas tax was enacted to correct a federal budgetary imbalance. It continued to support general revenue during World War II and the Korean War. Economists know the gasoline excise tax as a 'manufacturer's excise tax' because the government imposes it at production (i.e., the producer, refiner, or importer) for efficiency in collection. […] For FY2011, the Congressional Budget Office [CBO] estimates that revenues and interest credited to the Highway Trust Fund will total $36.9 billion, which will be divided into the Highway Account ($31.8 billion) and the Mass Transit Account ($5.1 billion). CBO also estimates that the fund's three primary revenue sources and their yields will be the gasoline tax ($24.0 billion), the diesel tax ($8.7 billion), and the tax on trucks and trailers ($2.2 billion). On May 17, 2011, at a Senate Finance Committee hearing, a CBO official stated that 'the trust fund will be unable to meet its obligations in a timely manner by the summer or fall of 2012, CBO projects, unless transfers similar to those in the past are made, other sources of revenue are identified, or spending is reduced.' This report will be updated as issues develop, legislation is introduced, or as otherwise warranted."

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CRS Report for Congress, RL30304
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