I’ve been giving the idea of eliminating the federal gas tax some thought. That’s an odd position, as I have been a big gas tax proponent for many years. I’ve always liked the idea of at least $2/gallon as a federal tax. Yesterday I decided to revisit that opinion I formed decades ago. Times have changed A LOT since the days of Al Gore, which is about when I made up my mind.

The calculus seemed pretty simple back then. Higher gas taxes reduce fuel use and thus reduce climate damage. Since climate is near my #1 issue, I was fully on board. I still would be, if $2/gallon was achievable. It’s no coincidence that I’m rethinking this after hearing my EV may soon be subject to a $130 federal EV registration fee. That just feels terribly wrong and vindictive, because of course it is. But as a thought experiment lets assume they pass that bill, because it gives us an interesting option. Something like sacrificing a bishop to pin their queen.

The current federal gas tax:

This per-gallon tax has not increased since 1993. There was an attempt during the Biden administration. But consider the implications of this policy stance:

“President Joe Biden and Democrats in Congress want to raise taxes on the rich, while some Republicans have been pushing for an increase in the gas tax – which would be the first in 28 years. A bipartisan group of senators recently crafted a compromise bill that would pay for just under US$1 trillion in spending on rail, roads and bridges over five years in part by indexing the gas tax to inflation. Democrats call this regressive because it would raise taxes on working Americans.”
https://www.pbs.org/newshour/politics/the-gas-taxs-tortured-history-shows-how-hard-it-is-to-fund-new-infrastructure

Here we have our recent Democratic leadership voicing opposition to raising the gas tax because it is regressive. Hard to argue against that. Any flat tax is regressive as we all well know. The Dems gave a nice reason to oppose raising the tax (it is regressive) but I’m absolutely positive the real reason is because polling showed that pushing for higher gas taxes is political suicide- and doubly so for the party that claims to fight for the little people. Vote for us and we promise to punish you every week!

Now, about that Republican offer above. If you think any Republican offer to index fuel tax to inflation isn’t a Lucy/football episode, I have an old car to sell you. Ran when parked! See, the problem that Biden ran into is that he was negotiating against himself. Yes, Biden passed an infrastructure bill. It notably did not increase the gas tax, nor increase taxes on the wealthy. That proposal mentioned above offered the Republicans a carrot they didn’t actually want. They don’t want gas taxes to increase, and they also don’t want taxes on the rich to go up. Obviously. How his team thought that offer was an honest negotiation boggles my mind. Once again the Dems assumed good intent. STOP THAT PLEASE. You have to dangle a real carrot to get an opponent to consider a deal. A carrot like ending gas taxes, which sounds so very good to the average voter and makes Republicans quiver with joy. The funny part is that the tax is so low that this golden fleece they are chasing is mostly a mirage.

So we are stuck at 18.9 cents, which is really a problem. Since it hasn’t changed in 33 years, inflation has eaten over half of that real revenue. Are there any options? Well I’d say the Republicans just handed us a great one. If they are going to set up all the infrastructure and data collection to handle charging all of us EV owners, we should propose trading zero gas tax if they will apply that fee to every single vehicle. They even set the price for us: $139 per vehicle. Great! Of course they meant that as punishment for environmentalists, but we can use that. We can trade the elimination of the federal gas tax for a yearly fee. People hate taxes at the pump, that is a surety. Meanwhile a yearly registration fee is a lot harder to put “I did that” stickers on. There is a political opportunity to be the “zero tax” heroes while also increasing road/transit revenue by almost 40%. This strategy is a bit of political judo, to use their own momentum against them. If they want to cry about $139, go for it. It’s your number dipshits. Surely you did careful math to figure out the marginal federal cost of a vehicle. Of course indexed to inflation is a requirement so we aren’t back here in 5 years.

As for the moral argument about regressive taxation, the new registration fee is also regressive, but in this case we don’t have to argue for that side. We can accept it as a condition for removing regressive fuel taxes. Hopefully progressives would consider that an even trade or close enough that they don’t cry foul. There’s no moral gain here, but also no loss. My biggest concern is that some poor people may have two old vehicles because they can’t afford a single reliable new vehicle. A per-vehicle fee would hit them the hardest. Not every policy is perfect, but I don’t like this possibility. Expanded EV purchase credits for low income people? I’m not sure if that would truly offset this negative outcome.

The Math:

Yearly revenue from the federal gas tax is $28 billion. That’s a big pile of money. Roughly 80% of that goes to national highway/bridge repair, and 20% goes to mass transit. I figured dumping the gas tax would break our road maintenance funding and that would be the end of the thought experiment. But, facing my own $130 federal vehicle registration fee, I looked up how many registered vehicles are in the US. Turns out it’s roughly 300 million. So, if everyone paid that registration fee (instead of just EV’s) total revenue would equal $39 billion. That’s 11 billion more than gas taxes bring in. That amount of funding would improve our failing bridges and roads. More important, it would mean an increase in transit funds from 5.6 to 7.8 billion dollars.

I’m aware that an extra registration fee could incentivize people to scrap some older cars not worth the new fee, reducing revenue (although state registration fees already mirror that impact.) So some number of vehicles will cease to exist- and usually old vehicles that pollute more. Sounds almost like another win, even considering revenue might drop a touch.

Environmental Impact:

The current gas tax calculates to about 3.8% of the gas price today. We all know that gas demand is famously price resistant. Maybe, maybe that gas tax reduces fuel use by 1%. And if the tax cannot go up due to politics, and forever diminishes due to inflation, then it is increasingly useless for environmental reasons. Every year it matters less.

BUT- consider what an extra 2 billion annual dollars in transit funding would do! Less driving, less emissions. Is it better to reduce fuel use by 1% or increase federal transit funding by 40%? I’m not sure what the exact answer is, but it’s important to note that transit spending often results in long term infrastructure, and that the environmental benefits are cumulative over time. If anyone is actually an expert in this field I’m all ears. We should also consider the social benefits of a better-connected society. That alone could be another very long diary.

Are there any environmental negatives to canceling the tax? Will people suddenly start driving more tomorrow if the price went down by 18 cents? I doubt it. I’m looking at $5.55 here. $5.37 is not going to get me to fill up the gas car and hit the open road. The Iran conflict is a negative fuel incentive 10x what the gas tax is today, and the roads are still crowded. I also doubt the Iran conflict will ever truly end. Pandora’s box is open there and it remains open. A likely outcome is permanent Iranian tolls- tolls which are estimated to keep prices elevated by 10 to 30 cents per gallon. Hey look that’s more than our gas tax, so from an accounting mindset dumping the tax has no net environmental impact vs where we were at 2 months ago.

Carbon Taxes/Credits:

It’s important to mention a couple of alternatives that liberals have promoted to solve the carbon problem from other angles. Here’s a smart solution to disincentivizing carbon output: carbon taxes/credits. Makes sense on paper, but large corporations have figured out how to game that system. The bulk of credits circulate between a small pool of very wealthy and powerful interests.

Case in point- in the US carbon market, Tesla is the undisputed owner and seller of the most regulatory credits. Almost half of Tesla’s net income comes directly from carbon credits. We are literally funding our worst environmental enemy and the richest man in the world with our own environmental initiative. Does it matter that Tesla is adding EVs when Musk is using that revenue to fight against climate progress? To pollute our politics? To destroy our democracy? So that Tesla can charge less and still make a profit? There are other good EVs available and Musk clearly does not give one shit about the environment. He just transforms our good intentions into further harm.

Still think carbon taxes are a good idea? Google “carbon tax fraud” and I think the results speak for themselves.

Carbon Capture:

Seemed promising at first, but this is a disgusting read. This letter is backed by the Sierra Club, Climate Justice Alliance, Bold Alliance and Earthjustice.

https://www.foodandwaterwatch.org/2026/02/26/125-groups-call-for-end-to-wasteful-untracked-45q-carbon-capture-tax-credits/

“The oil company profits from EOR come at the expense of billions in public resources and community safety. The 45Q tax credit was never intended to function as a permanent entitlement for oil and gas production. Yet today it is doing exactly that, with the Environmental Protection Agency documenting over 90% of all carbon dioxide captured in the United States going to extract more oil, funded through billions in public subsidies… The Department of Energy (DOE) estimates that carbon dioxide used for EOR could ultimately result in the extraction of 177 billion barrels of otherwise uneconomic oil in the United States… Moreover, the 45Q tax credit program is uncapped, exposing taxpayers to unlimited losses. The Treasury’s own claims estimate the cost to taxpayers for 45Q at $43.6 billion over the next ten years alone.“

Conclusion:
At this point I am fairly confident the gas tax is trending toward pointless for helping our environment and carbon taxes/credits/capture are actively harmful. This conclusion goes against my desires and the common knowledge I was relying on up until yesterday. Frustrating as that is, the environmental movement needs to find newer levers to push on. Defending what has been failing for many years is insanity. Higher transit funding is one of our very best options. Functional transit is an absolute necessity for measurable environmental progress, and a good deal on ending this gas tax could secure significant transit funding indefinitely.

I’m sure many other good ideas exist. Ending the “light duty” loophole for giant pickups would be a fantastic step. That should definitely be a hard ask as part of this package. And hey I would demand 30% of registration revenue go to transit instead of 20%. A stronger negotiating demand does tend to lead to a better final result. Add in EV charger funding in a real way while we are at it, of course. But we can’t get these asks without offering that carrot.

To be fully cynical, the wealthiest people won’t hate this proposal. A small fee is nothing to them. But Bill Gates paying the federal tax on 160,000 gallons to fill up his superyacht might get his attention, slightly? At least they might not fight it.

One side benefit of a single federal fee is to standardize revenue collection across vehicle types. The EV movement is having a real impact now. We environmentalists all hope that we go fully EV, correct? And the net result of that is everyone paying the EV registration fee while gas tax revenue trends toward zero. So we wind up at the exact same place as this proposal anyways, it just takes an extra decade. And for that entire decade we’ve invested nothing extra in transit, nothing extra in EV chargers, and pitted EV driver vs internal combustion driver. It’s another attempt to divide us up into warring camps, this time based on vehicle type. We can neuter that idiotic contest by just jumping ahead by a decade right now- and earn a bunch of political capital in one fell swoop.

All of our federal climate initiatives are dead in the water unless we elect a Democratic House/Senate/Presidency. We have no room to spare electorally, so any alternative solution to improving our environment must not decrease support for our Party. Our proposals must be popular, not just moral. Carbon taxes are feared and gas taxes are hated. Insisting on these as our solutions is holding us back politically and realistically doing almost nothing for our environment. We must promote solutions that are not direct consumer punishment and meet the voters where they are. Expanded natural areas. Energy efficiency requirements for manufacturers. Wetland restoration. Community solar. Blocking data centers, of course. Rewilding. Enforcement of regulations on industry. Upzoning. Etc etc. Our options are unlimited, if we can actually win back some power.

Please note I’m still in favor of state level gas taxes where politically feasible. Which is nowhere at this moment. Oregon Dems just tried to raise gas taxes by five cents and the bill lost a public vote 83-17. In a blue state full of environmentalists. That is a wake up call our party should hear ringing from the mountaintops. Even the Nazis could clear 17% here, but the gas tax can’t.

I may be overlooking some critical importance of this specific gas tax. But this alternate strategy of dumping the tax for a fee is beneficial on net, I think. I don’t exactly love it, but as one of my favorite moments in a movie puts it during an impossible emergency: “No. It’s necessary.”