U.S. gas prices have plummeted in recent weeks, dropping them to the lowest levels we have in seen in the last few years. According to the AAA Fuel Report, the national average for a gallon of gas is $2.19, which is significantly lower than the average of $3.32 one year ago. If you are interested to see where your state falls, CNN Money has a helpful interactive map that shows the average price for a gallon of gas in each state.
I think we can all agree that lower gas prices make everything a little easier and less worrisome. However, while we are benefiting from the lowered prices, proponents of raising the gas tax are congregating to rally support for the cause. Each gallon of gas in the U.S. is assessed federal tax of 18.4 cents (plus additional state and local taxes). This rate has remained unchanged since 1993. Out of the large oil-consuming countries, only Mexico accesses a smaller federal tax on gas. Those in favor of the increased tax argue that the tax agreed-upon in 1993 is no longer sufficient to cover the increasing costs of maintaining U.S. infrastructure (the proposed increase is 6.0 cents per year over the next two years). As of now, Congress is funding road and transit construction through May, but after that, it is an issue that needs to be addressed.
Although it is hard to tell if the Senate will pass a bill that will increase the gas tax, it will be something to keep an eye over the year. Cheaper gas prices have changed the way some taxpayers view automobiles. SUV and truck sales increased from 2013 to 2014, in part, because of the fall in gas prices. It is important to plan and realize that prices will most likely not remain at these levels. And, even if they do, there will always be a chance we can see an increase in prices due to taxes.