Tuesday, January 25, 2011

Less Fuel Also Means Less Revenue


For environmentalists and others eager to reduce reliance on foreign oil, the advent of electric cars and other fuel-efficient vehicles is cause for celebration.

Yet for governments, the trend has a distinct downside: their fuel-tax receipts will dwindle, because drivers will buy less gasoline.

In the United States, national and state taxes on fuel are the most important sources of funding for the maintenance of roads and bridges. In recent years, particularly with the economy in a slump, fuel tax receipts have fallen, and the strain on highway funding has grown more acute.

See full Article.