his week we are going to examine substitute goods, highways and a bit about how we pay for highways.

Highway construction and maintenance are funded mainly by motor fuel taxes (the gasoline tax).There is a federal gasoline tax (an excise tax) which is 18.4 cents per gallon for gasoline and 24.4 cents per gallon for diesel fuel.Then there are state taxes per gallon and, in some states, a sales tax as well as a gallonage tax.For an overview of state motor fuel taxes go to the American Petroleum Institute'sMotor Fuel Taxespage.Since only those who have vehicles pay the motor fuel tax, it is also called a User Fee.

The federal motor fuels tax goes into the Federal Highway Trust Fund (it also funds public transit) which is a major source of highway funding nationally.However, as vehicles use less fuel because of higher mileage, theTrust Fund balancebecomes insufficient to meet the infrastructure needs. The state highway trust funds are experiencing the same problems.Thus, states are looking for other ways to fund new highways.

Which brings us to this week's discussion topic: Toll Roads.

https://youtu.be/QixlLU15CIc