Although the federal excise played several roles in the financing surface transportation infrastructure in the United States, the experts do not agree on the purpose of the tax. Some argued that it is essentially a fee for users of the nation’s state-supported highways. Others suggested that it play a greater role in the environment, energy and transport policy by correcting driving-related externalities. Others proposed that it should be used to reduce the Federal b … Read more »

Although the federal excise played several roles in the financing surface transportation infrastructure in the United States, the experts do not agree on the purpose of the tax. Some argued that it is essentially a fee for users of the nation’s state-supported highways. Others suggested that it play a greater role in the environment, energy and transport policy by correcting driving-related externalities. Still others suggested that it should be used to reduce the U.S. budget deficit. Finally, the control itself had remained at the same level since 1993, and virtually bankrupt the Highway Trust Fund, many experts believed it was time for a raise. The case provides a background on the U.S. federal fuel tax, an overview of the market for gasoline in the United States, and the checking of gasoline taxes in the United States and several other countries around the world.
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Saahil Malik
David Besanko
Source: Kellogg School of Management
21 pages.
Publication Date: Jun 29, 2009. Prod #: KEL517-PDF-ENG
The U.S. Federal gasoline taxes: time for a change? HBR case solution