A GAS TANK

The Idea:

Revenues from federal taxes on motor fuels are credited to the Highway Trust Fund, which finances highway construction and maintenance. Those federal taxes, set in 1993, are currently 18.4 cents on each gallon of gasoline purchased and 24.4 cents on each gallon of diesel fuel.With state and local excise taxes included, total average tax rates nationwide are 40 cents per gallon for gasoline and 46.5 cents per gallon for diesel fuel. If the fuel taxes had been indexed to inflation, they would be around 15 cents higher than they are now. In addition to not having kept pace with inflation, fuel taxes have been lower than Highway spending every year since 2000. This proposal suggests raising the fuel tax.

Instructions:

Please consider the following proposal for changing taxes. Please provide an analysis of this proposal. First explain what you consider to be the advantages and disadvantages of enacting this measure. What are some reasons why it would be a good idea to enact this? Are there any drawbacks or reasons why you would not want to enact this?