The option of an oil tax to fund transportation and infrastructure / Keith Crane, Nicholas Burger, Martin Wachs.

By:

Crane, Keith, 1953- [author.]

Contributor(s):

Series: Occasional paper ; 320Publisher: Santa Monica, CA : RAND, 2011Description: iv, 31 pages : illustrations ; 28 cmContent type:

text

Media type:

computer
unmediated

Carrier type:

online resource
volume

ISBN:

0833051784 (pbk. : alk. paper)
9780833051783 (pbk. : alk. paper)

Subject(s):

Petroleum -- Taxation -- Economic aspects -- United States

Genre/Form:

Electronic books.

LOC classification:

HD9560.8.U52 C73 2011

Online resources:

Click here to access online

Available additional physical forms:

Also available on the internet via WWW in PDF format.

Contents:

Introduction -- Why tax oil? -- How much might oil be taxed? -- Who would pay the tax? -- Conclusions -- Appendix: Gasoline prices and Federal Tax History, 1949-2008.

Summary: This paper raises key issues associated with using an oil tax to fund U.S. transportation infrastructure, identifies the decisions Congress would need to make in designing such a tax, and outlines some of the likely implications of adopting an oil tax. In 2009, federal spending on surface-transportation infrastructure outpaced federal tax revenues on gasoline and diesel fuel. Increasing fuel efficiency results in less money spent buying fuel, so real revenue generated from these taxes has declined. This paper investigates using a percentage tax on crude oil and imported refined petroleum products consumed in the United States to fund U.S. transportation infrastructure. Such a tax could simplify the tax system by replacing several existing taxes used to finance transportation with a single, upstream tax that could be adjusted automatically to fully fund appropriated expenditures on transportation and transfer external costs associated with producing and consuming oil from the general public to oil producers and consumers. It would spread the burden of these external costs across all users of petroleum products, help fund national security expenditures employed to safeguard sources and sea-lanes used to import oil, and might be more politically palatable than raising existing motor-fuel taxes. The paper provides revenue estimates based on different potential oil tax rates at various oil prices, then matches potential revenues to estimates of transportation expenditure needs. It also estimates the aggregate external costs associated with producing and consuming oil.

Item type:

eBooks

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"RAND Investment in People and Ideas."

"This research was conducted in the Environment, Energy, and Economic Development Program (EEED) within RAND Infrastructure, Safety, and Environment (ISE)"--Preface.

Includes bibliographical references (p. 29-31).

Introduction -- Why tax oil? -- How much might oil be taxed? -- Who would pay the tax? -- Conclusions -- Appendix: Gasoline prices and Federal Tax History, 1949-2008.

This paper raises key issues associated with using an oil tax to fund U.S. transportation infrastructure, identifies the decisions Congress would need to make in designing such a tax, and outlines some of the likely implications of adopting an oil tax. In 2009, federal spending on surface-transportation infrastructure outpaced federal tax revenues on gasoline and diesel fuel. Increasing fuel efficiency results in less money spent buying fuel, so real revenue generated from these taxes has declined. This paper investigates using a percentage tax on crude oil and imported refined petroleum products consumed in the United States to fund U.S. transportation infrastructure. Such a tax could simplify the tax system by replacing several existing taxes used to finance transportation with a single, upstream tax that could be adjusted automatically to fully fund appropriated expenditures on transportation and transfer external costs associated with producing and consuming oil from the general public to oil producers and consumers. It would spread the burden of these external costs across all users of petroleum products, help fund national security expenditures employed to safeguard sources and sea-lanes used to import oil, and might be more politically palatable than raising existing motor-fuel taxes. The paper provides revenue estimates based on different potential oil tax rates at various oil prices, then matches potential revenues to estimates of transportation expenditure needs. It also estimates the aggregate external costs associated with producing and consuming oil.

Also available on the internet via WWW in PDF format.

Description based on print version record.