U.S. Diesel Policy: Taxation Without Representation?

While increasing the fuel efficiency of passenger vehicles is a stated goal of government of the United States of America, our appointed officials have allowed the perpetuation of a tax that penalizes the owners of certain vehicles. Although our government has put forth a great effort to encourage the adoption of vehicles that include some form of electrification, little has been done to due the same for clean diesel-powered vehicles. One could almost say that they’ve been discouraged.

The U.S. Government levies a tax on diesel fuel that is six cents per gallon greater then the corresponding tax on gasoline (18.4 cents per gallon for gasoline and 24.4 cents per gallon for diesel). A string of states (Alabama, Arkansas, Connecticut, Florida, Illinois, Iowa, Kansas, Maine, Maryland, Montana, Nevada, New Jersey, New Mexico, Pennsylvania, Vermont, and West Virginia) have higher diesel fuel taxes than gasoline taxes. (Source: Commerce Clearinghouse State Tax Guide.)

While these taxes may have been justified in another era (when big trucks consumed nearly all of the diesel fuel), they now represent a penalty for drivers that merely seek to do the right thing. It would be prudent, in this day and age, to consider a form of adjustment for owners of clean diesel-powered passenger vehicles. We must find a way to bring parity by mitigating excessive diesel fuel taxes.

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5 thoughts on “U.S. Diesel Policy: Taxation Without Representation?”

  1. Getting laws changed is an insanely long process, even for a company with deep pockets that can afford lobbyists. There are still laws on the books that govern horse drawn buggies in most states.

  2. With the advent of electric vehicles that don’t use fossil fuels, the days of the fuel tax are counted. The governments should start replacing it with a taxation system based on the wear a vehicle causes to the roads, since the tax is supposed to pay for road maintenance.

  3. Taxing fuel as a way of taxing ‘highway use’ is not only old-fashioned, but becoming more and more unfair every day.

    Not only do diesel passenger car drives pay more than their fair share just because of the fuel type they use, drivers of hybrid and, especially, all-electric vehicles pay far, far less than their fair share.

    Think of it — in a state (which is most of them) where the tax on petroleum fuel is the ‘highway use’ tax, drivers of hybrid and all-electric vehicles allow them to evade highway use taxes.

    They get to drive on the public highways at a discount or absolutely free, just because of their energy type.

    It’s nice that they are ‘saving the environment,’ but because the obsolete nature of the tax law they are cheating their neighbors, who have to pay more at the pump, or through their income taxes, to pay the difference.

    In a fair state, all drivers would, as David suggests, be taxed for their actual road use. How that would be fairly calculated without encouraging fraud and without invading privacy has to be worked out.

  4. In Europe, most contries have registration fees based on vehicle weight and fuel tax more than doubles the price of fuel. One reason their infrastructure and public transport shows significant upkeep and maintenance while ours shows neglect.

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