Roads Don't Vote

It's Wednesday, May thirteenth. Yesterday, the April inflation report came in at 3.8 percent, the highest since 2023. A big chunk of that is gas prices, which have been climbing since the Iran war disrupted oil markets. In response, President Trump proposed suspending the federal gas tax. Both parties have lawmakers lining up behind the idea. It sounds like a no-brainer: gas is expensive, cut the tax, prices drop. But there's a problem. That tax funds the roads you drive on. And the system paying for American roads was already falling apart before anyone proposed cutting it further. We're covering this today because gas prices affect everyone listening to this, and most people have no idea where the money for roads actually comes from or why the system is broken. There are two ways America pays for roads, the gas tax and tolls, and understanding both tells you something about why infrastructure in this country looks the way it does. The federal gas tax started in 1932 at one cent per gallon. It was supposed to be temporary, a Depression-era revenue measure. It never went away. Congress raised it periodically over the decades: three cents in 1956 when Eisenhower created the Interstate Highway System, four cents in 1959, nine cents in 1983, fourteen cents in 1990, and 18.4 cents in 1993. That was the last time anyone touched it. Thirty three years ago. In 1993, gas cost about a dollar a gallon. That 18.4 cents was a meaningful share of the price, about eighteen percent. Today, with gas over four dollars fifty, the same tax is about four percent of the price. And because the tax is a fixed amount per gallon rather than a percentage of the price, it doesn't rise with inflation. The Bipartisan Policy Center calculated that if Congress had indexed the gas tax to inflation in 1993, it would be about 40.8 cents today. Instead it's still 18.4. The tax has effectively been cut in half without anyone voting to cut it. Inflation did the work quietly. The money goes into the Highway Trust Fund, created alongside the Interstate system in 1956. The fund collects about forty billion dollars a year from fuel taxes and spends it on highways, bridges, and transit. The problem is that spending has exceeded revenue every year since 2008. Congress has transferred two hundred and seventy five billion dollars from the general fund to keep the Highway Trust Fund solvent. Without those bailouts, the fund would have gone to zero years ago. The roads you drive on are being financed by money that was supposed to go to other things. The gas tax holiday that both parties are now proposing would reduce pump prices by about eighteen cents a gallon, saving the average driver roughly two hundred and fifty dollars a year. Economists across the political spectrum are skeptical. When states have tried gas tax holidays, studies have found that oil companies and gas stations capture a significant portion of the savings by raising their pre-tax prices. The benefit to consumers is smaller than it looks on paper. And the revenue loss to the Highway Trust Fund would accelerate a funding crisis that's already severe. Suspending the tax that funds roads while the roads are crumbling is a decision that makes sense politically and almost nowhere else. Obama called a gas tax holiday a "gimmick" in 2008 when McCain and Hillary Clinton proposed one. Biden proposed his own gas tax holiday in 2022. Now Trump is proposing another. The idea keeps coming back because gas prices are visible, voters feel them immediately, and the tax cut is easy to explain on television. The infrastructure decay that results from the lost revenue is invisible, gradual, and easy to ignore until a bridge collapses. If the gas tax is one way to pay for roads, tolls are the other. And tolls are much older. The word "turnpike" comes from a literal pike, a wooden bar or pole, that blocked a road. You paid your toll, the pike was turned or lifted, and you passed through. Toll roads existed in England as early as 1346. The first American turnpike was the Philadelphia and Lancaster Turnpike in Pennsylvania, chartered in 1792. Over the next four decades, thousands of private turnpike companies built toll roads across the eastern US. Roads were private infrastructure, funded by the people who used them. The modern era of toll roads began in 1940 with the Pennsylvania Turnpike, which eliminated cross traffic, controlled access, and provided rest stops with restaurants and gas stations. It was called "America's Superhighway." Other states followed: the New Jersey Turnpike, the New York State Thruway, the Ohio Turnpike, the Illinois Tollway. When Eisenhower signed the Federal-Aid Highway Act in 1956, the Interstate system was supposed to be toll-free, funded entirely by the gas tax. The word "freeway" entered the vocabulary for a reason. But states that had already built toll roads were grandfathered in. Congress decided it was cheaper to absorb two thousand miles of existing toll roads into the Interstate system than to build parallel free highways next to them. Many states promised their residents that the tolls were temporary. Illinois told drivers the tolls would be removed once the construction bonds were paid off. The bonds were paid off decades ago. The tolls are still there. They've gone up. The Illinois Tollway now generates over 1.5 billion dollars a year in revenue. If you've ever driven from the Midwest into Chicago, you know exactly how this feels. Every few miles, another plaza, another charge, on a road that was supposed to be free by now. I still hate that drive. The philosophical difference between the gas tax and tolls is worth thinking about. The gas tax is a shared cost: everyone who buys gas contributes to roads, whether they drive on highways or not. It's broad, flat, and invisible. Tolls are a direct cost: you pay for the specific road you use. They follow the "user pays" principle more precisely, but they also mean that wealthier drivers on toll roads get better-maintained infrastructure while drivers who can't afford the tolls sit in traffic on the free alternatives. Congestion pricing, which New York City launched for Manhattan, takes this a step further: you pay more to drive during peak hours. The toll adjusts based on demand, like surge pricing for roads. The equity question is real. Gas taxes are regressive because lower-income people spend a higher percentage of their income on gas. But tolls are arguably more regressive because they create a two-tier system where people with money buy faster commutes and people without money don't. Neither system is fair in any clean sense. They're both compromises between the need to fund roads and the political reality that nobody wants to pay for them. The deeper problem is that the gas tax was designed for a world that no longer exists. In 1956, every car ran on gasoline, and fuel efficiency was terrible. A car that got twelve miles to the gallon generated a lot of gas tax revenue per mile driven. Today, cars average about thirty six miles per gallon. Hybrids get fifty or sixty. Electric vehicles pay zero gas tax while using the same roads. As the fleet gets more efficient and more electric, gas tax revenue per mile driven drops even if the total miles driven stays flat. The tax is slowly eliminating itself. The obvious replacement is a mileage-based user fee, where you pay based on how far you drive rather than how much gas you buy. Oregon has been testing this since 2015. Utah and Virginia have similar pilots. You report your miles via an app or odometer reading, and you pay a per-mile charge. The privacy concerns are real. Nobody loves the idea of the government tracking where they drive. But the math is moving in this direction because the gas tax can't survive the transition to electric vehicles. The gas tax suspension being proposed right now would save drivers about eighteen cents a gallon while accelerating the collapse of a funding mechanism that's already failing. The roads are crumbling. The fund is insolvent without bailouts. The tax hasn't been raised in thirty three years. And the political incentive is always to cut the tax rather than fix the system, because cutting taxes is popular today and potholes are someone else's problem tomorrow. Every few years, a politician proposes a gas tax holiday. Every few years, the same economists explain why it's a bad idea. Every few years, the idea polls well anyway. The roads don't vote. So if this comes up in conversation, here's how to think about it. You pay for roads two ways: a federal gas tax of 18.4 cents per gallon that hasn't been raised since 1993 and has lost more than half its value to inflation, and tolls on specific roads that were supposed to be temporary and never were. The gas tax funds the Highway Trust Fund, which has been running deficits since 2008 and has been bailed out with two hundred and seventy five billion dollars from the general fund. Both parties are now proposing to suspend the tax entirely, which would save drivers about eighteen cents a gallon while cutting funding for roads that the American Society of Civil Engineers grades a D. Economists from both sides say the savings mostly benefit oil companies, not drivers. The gas tax is also slowly dying on its own because electric vehicles don't pay it. The replacement will probably be a per-mile fee, but nobody wants to be the politician who proposes tracking how far you drive. The system is broken, everyone knows it's broken, and fixing it would require either raising a tax or creating a new one. Nobody's volunteering for that. Stay informed, stay curious, and we'll see you tomorrow.