Americans worried about how rising oil prices might affect prices at the pump are about to get blindsided by looming gas tax hikes that almost guarantee higher gasoline prices.
And it's not just state governments looking to shake down American motorists.
Alarmingly, the International Monetary Fund (IMF) has called for the U.S. government to increase the current federal gasoline tax of $0.184 per gallon by a whopping $1.40.
In a March 26 speech, IMF Deputy Director David Lipton said the gas tax hike would pay for social programs around the world as well as to save the environment.
"The time has come for subsidy reform and carbon taxation," Lipton said.
This federal gas tax hike, if imposed, would add $14 to a typical 10-gallon fill-up and hundreds of dollars to the annual cost of driving.
Fortunately for U.S. drivers, few in Washington support the IMF proposal.
"Higher gas prices hit those who can least afford it the most as American families are forced to pay a larger percentage of their income on higher energy prices," Rep. Fred Upton, R-MI, chairman of the House Energy and Commerce Committee, told Fox Business. "Drivers across the country are already struggling to pay up to $4.00 a gallon for gas, and further price increases at the pump could be devastating to low- and middle-class families and disastrous to our economic recovery."
Now if only state legislatures felt the same way...
Gas Tax Hikes Spread Among the States
Revenue-hungry states are increasing gasoline taxes to make up for budget shortfalls or raise money for new transportation projects.
At least 17 state legislatures have either already passed gas tax hikes or are considering doing so.
Wyoming, California and Maryland are among the states that have already approved gas tax hikes.
Wyoming's gas tax will rise from $0.14 a gallon to $0.24 a gallon in July. California's $0.035 increase of its gasoline excise tax also takes effect in July, and will give California the nation's highest total gas tax (federal plus state taxes) at $0.72 a gallon.
But the most dramatic gas tax hike is coming in Maryland, which voted to increase its levy in several stages beginning this July.
AAA Mid-Atlantic has estimated that Maryland's gasoline tax will rise to $0.437 a gallon by 2018 - almost double the current $0.235.
Other states currently mulling gas tax hikes include Michigan and Iowa, and more cash-strapped states are expected to join the crowd in the next year or two.
"These states' bold actions may serve as a model for other states grappling with the same [transportation funding] issues," Ben Husch, a National Conference of Legislators director, told Fox News.
Not surprisingly, the American public is profoundly unenthusiastic about spending more money on gasoline.
According to a Gallup poll last month, 66% of Americans would vote against a state gas tax hike of up to $0.20 a gallon intended to raise revenue for road repairs and mass transportation projects.
The citizens, of course, don't get to vote for or against individual taxes, but they can vote out the legislators who do in the next election.
Here's a chart from the American Petroleum Institute that shows how much people currently pay (as of April 23) in combined state and federal gasoline taxes. The chart does not include any of the July gas tax hikes.
Related Articles and News:
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- Money Morning:
Why Gas Prices Will Continue to Climb
In U.S., Most Oppose State Gas Tax Hike to Fund Repairs
- Fox News:
States eye gas tax hikes to cover cash shortfalls, transportation projects
- Fox News:
Top House Republican Pushes Back at IMF Gas Tax Study
About the Author
David Zeiler, Associate Editor for Money Morning at Money Map Press, has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.
Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.
Dave has a BA in English and Mass Communications from Loyola University Maryland.