A Proposed Rule to Tighten Fuel Economy Standards Would Gradually Decrease Fuel Consumption, Eventually Reducing Revenues from the Gasoline Tax by 21 Percent in 2040

• The 21 percent reduction in revenues would lower receipts credited to the Highway Trust Fund—the mechanism used to finance the federal government’s surface transportation programs.
• The largest share of the trust fund’s receipts comes from the gasoline tax.

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Federal highway and mass transit programs are financed largely by a variety of transportation-related excise taxes. The largest share of the revenues comes from the federal tax on gasoline, including gasoline that is blended with ethanol. Revenues from those taxes are credited to the Highway Trust Fund, and most of the spending for those programs is attributable to that fund. Because the gasoline tax is set as a fixed amount per gallon (currently 18.4 cents), policies that are designed to reduce gasoline consumption would decrease the amounts credited to the fund.

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