Federal Highway Trust Fund (United States)
Encyclopedia
The United States
Highway Trust Fund is a transportation fund which receives money from a federal fuel tax of 18.4 cents per gallon on gasoline and 24.4 cents per gallon of diesel fuel and related excise taxes. It currently has three accounts, the Highway Account which funds road construction, a smaller 'Mass Transit Account' which supports mass transit
and also a 'Leaking Underground Storage Tank Trust Fund'. It was established 1956 to finance the United States Interstate Highway System
and certain other roads. The Mass Transit Fund was created in 1982. The federal tax on motor fuels yielded $28.2 billion in 2006. In 2008 the fund required an additional $8 billion from general taxation due to reduced receipts from fuel tax in order to meet its obligations.
, approved by President Ronald Reagan
in January 1983, increased the tax to nine cents with one cent going into a new Mass Transit Account to support public transport
. In 1990 the gas tax was increased by President George H. W. Bush with the Omnibus Budget Reconciliation Act of 1990
to fourteen cents - with 2.5 cents of the increase going to the Highway Fund and the other 2.5 cents going towards deficit reduction. In 1993 President Clinton increased the gas tax to 18.4 cents with the Omnibus Budget Reconciliation Act of 1993
with all of the increase going towards deficit reduction. The Taxpayer Relief Act of 1997
redirected the 1993 increase to the Fund.
The Senate Committee on Commerce, Science and Transportation, formed in 2005, discussed raising the federal gas tax to 40 cents per gallon over five years, rising 5-8 cents annually for five years and then also indexed to inflation.
During 2008 the fund required support of $8 billion from general revenue funds to cover a shortage in the fund. This shortage was due to lower gas consumption as a result of the recession and higher gas prices. Further transfers of $7 billion and $19.5 billion were made in 2009 and 2010 respectively.
During the 2008 presidential campaign, Senator John McCain
proposed a 'gas holiday', a suspension in the tax during the peak summer driving season. Senator Hillary Clinton endorsed this idea soon afterwards while Senator Barack Obama
opposed the suspension. Clinton proposed a 'windfall tax' on oil companies, which would make up for the lost revenue from the federal tax on gasoline and diesel fuel without affecting any projects.
Since 2000, there have been at least half a dozen attempts by individual members of Congress to suspend the federal gas tax, which raises money to repair and expand the highway system. All have failed.
tax revenues derived from excise taxes on highway motor fuel and truck related taxes on truck tires, sales of trucks and trailers, and heavy vehicle use. Money goes to the general treasury but is then credited to the fund.
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
Highway Trust Fund is a transportation fund which receives money from a federal fuel tax of 18.4 cents per gallon on gasoline and 24.4 cents per gallon of diesel fuel and related excise taxes. It currently has three accounts, the Highway Account which funds road construction, a smaller 'Mass Transit Account' which supports mass transit
Public transport
Public transport is a shared passenger transportation service which is available for use by the general public, as distinct from modes such as taxicab, car pooling or hired buses which are not shared by strangers without private arrangement.Public transport modes include buses, trolleybuses, trams...
and also a 'Leaking Underground Storage Tank Trust Fund'. It was established 1956 to finance the United States Interstate Highway System
Interstate Highway System
The Dwight D. Eisenhower National System of Interstate and Defense Highways, , is a network of limited-access roads including freeways, highways, and expressways forming part of the National Highway System of the United States of America...
and certain other roads. The Mass Transit Fund was created in 1982. The federal tax on motor fuels yielded $28.2 billion in 2006. In 2008 the fund required an additional $8 billion from general taxation due to reduced receipts from fuel tax in order to meet its obligations.
History
Prior to the 1956 Highway Revenue Act and the establishment of the Highway Trust Fund roads were financed directly from the General Fund of the U.S. Treasury. The 1956 Act directed federal fuel tax to the fund to be used exclusively for highway construction and maintenance. The Highway Revenue Act mandated a three cent tax. The original Highway Revenue Act was set to expire at the end of fiscal year 1972. In the 1950s the gax tax was increased to four cents. The 1982 Surface Transportation Assistance ActSurface Transportation Assistance Act
The Surface Transportation Assistance Act of 1982 was a comprehensive transportation funding and policy act of the United States Federal Government, . The legislation was championed by the Reagan administration to address concerns about the surface transportation infrastructure...
, approved by President Ronald Reagan
Ronald Reagan
Ronald Wilson Reagan was the 40th President of the United States , the 33rd Governor of California and, prior to that, a radio, film and television actor....
in January 1983, increased the tax to nine cents with one cent going into a new Mass Transit Account to support public transport
Public transport
Public transport is a shared passenger transportation service which is available for use by the general public, as distinct from modes such as taxicab, car pooling or hired buses which are not shared by strangers without private arrangement.Public transport modes include buses, trolleybuses, trams...
. In 1990 the gas tax was increased by President George H. W. Bush with the Omnibus Budget Reconciliation Act of 1990
Omnibus Budget Reconciliation Act of 1990
The Omnibus Budget Reconciliation Act of 1990 is a United States statute enacted pursuant to the budget reconciliation process to reduce the United States federal budget deficit....
to fourteen cents - with 2.5 cents of the increase going to the Highway Fund and the other 2.5 cents going towards deficit reduction. In 1993 President Clinton increased the gas tax to 18.4 cents with the Omnibus Budget Reconciliation Act of 1993
Omnibus Budget Reconciliation Act of 1993
The Omnibus Budget Reconciliation Act of 1993 was federal law that was enacted by the 103rd United States Congress and signed into law by President Bill Clinton. It has also been referred to, unofficially, as the Deficit Reduction Act of 1993...
with all of the increase going towards deficit reduction. The Taxpayer Relief Act of 1997
Taxpayer Relief Act of 1997
The Taxpayer Relief Act of 1997 reduced several federal taxes in the United States.Subject to certain phase-in rules, the top capital gains rate fell from 28% to 20%. The 15% bracket was lowered to 10%....
redirected the 1993 increase to the Fund.
The Senate Committee on Commerce, Science and Transportation, formed in 2005, discussed raising the federal gas tax to 40 cents per gallon over five years, rising 5-8 cents annually for five years and then also indexed to inflation.
During 2008 the fund required support of $8 billion from general revenue funds to cover a shortage in the fund. This shortage was due to lower gas consumption as a result of the recession and higher gas prices. Further transfers of $7 billion and $19.5 billion were made in 2009 and 2010 respectively.
During the 2008 presidential campaign, Senator John McCain
John McCain
John Sidney McCain III is the senior United States Senator from Arizona. He was the Republican nominee for president in the 2008 United States election....
proposed a 'gas holiday', a suspension in the tax during the peak summer driving season. Senator Hillary Clinton endorsed this idea soon afterwards while Senator Barack Obama
Barack Obama
Barack Hussein Obama II is the 44th and current President of the United States. He is the first African American to hold the office. Obama previously served as a United States Senator from Illinois, from January 2005 until he resigned following his victory in the 2008 presidential election.Born in...
opposed the suspension. Clinton proposed a 'windfall tax' on oil companies, which would make up for the lost revenue from the federal tax on gasoline and diesel fuel without affecting any projects.
Since 2000, there have been at least half a dozen attempts by individual members of Congress to suspend the federal gas tax, which raises money to repair and expand the highway system. All have failed.
Description
The Fund receives hypothocatedHypothecation (taxation)
The hypothecation of a tax is the dedication of the revenue from a specific tax for a particular expenditure purpose. Hypothecation is the pledging of assets....
tax revenues derived from excise taxes on highway motor fuel and truck related taxes on truck tires, sales of trucks and trailers, and heavy vehicle use. Money goes to the general treasury but is then credited to the fund.