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What could be scarier for Californians than another gas tax hike? Let’s talk this through.
Halloween is a good time to talk about what scares us. For most drivers, that’s the number on the gas pump. But the real horror story about gasoline taxes isn’t how high they are. It’s who pays them, where the money goes, and how little it actually covers. Here are thirteen facts that should scare you, just not for the reasons you think.
Scary Fact No. 1: Drivers have never paid Gas Taxes
Drivers constantly complain that gas taxes are too high, yet legally, they don’t pay them.
The gasoline tax is an excise tax. Excise taxes are supposed to discourage the manufacturing, sale, and consumption of certain products deemed harmful to people.
These kinds of taxes are paid by the manufacturers, suppliers, importers, or sellers of these products.
Scary Fact No. 2: Paying Gas Taxes doesn’t turn you into an Onassis
Readers might say, ‘But wait, the manufacturers just pass these taxes on, so in the end drivers are still paying these taxes!’
For Big Oil, the gas tax is just another cost that gets built into the price at the pump, alongside extraction, transportation, salaries, and much more.
In other words, oil companies own tankers and drivers help pay for them as well, but that doesn’t turn the driver into Aristotle Onassis.
Scary Fact No. 3: The Gas Tax and Tariffs aren’t so different
I can tell you still aren’t convinced about the legality of this. So let’s check with US courts. Tariffs are a close cousin of excise taxes.
Excise taxes are fees on manufacturers and suppliers to discourage the sale of products deemed harmful to society. Import Tariffs are fees to discourage the import and sale of products deemed harmful to the economy.
Voters said: ‘Tariffs mean consumers are paying more taxes.‘
Washington, D.C. answered: ‘Don’t you worry, China is paying for these tariffs.‘
But in Feb. 2026, the US Supreme Court said something completely different. They called the tariffs “unauthorized” and “invalid as imposed”, and that refunds must go to the “importers of record“.
At the time, an estimated $175B had to be refunded. The refunds did not go to China or consumers; they went to Walmart, Target, Apple, Ford, GM, Nike, Gap, Home Depot, FedEx, UPS, and many other Importers of Record. With this ruling, the US Supreme Court established who legally and technically paid these tariffs.
Scary Fact No. 4: The Gas Tax is a Hidden Tax
Who is legally paying the gasoline tax? Who would be getting the money back if the US Supreme Court made a similar decision? The technical term for the gasoline tax says that they are paid by ‘the supplier of the rack’. It’s paid at the refinery or the ‘terminal rack’ before the fuel truck is even filled. Neither the gas station nor the driver sees it on a bill. That’s why you won’t find a line item for “gasoline taxes” on your receipt.
“Hidden Tax – paid by someone other than the person levied. The person bearing the cost might not be the one seeing it.“
Scary Fact No. 5: The Gas Tax is part of a Pyramiding Tax Scheme
Because the receipt doesn’t show how much tax and fees per gallon are paid, the sales tax doesn’t make a distinction either. If we assume consumers are ultimately paying the gasoline tax or the tariffs (which is a valid assumption), then we can also safely assume we pay sales tax on top of that tariff and excise tax as well. It’s a tax-on-a-tax scheme, which economists sometimes call ‘pyramiding‘.
“Pyramiding– tax-on-tax or the multi-stage cascading along the supply chain.“
Scary Fact No. 6: The Gas Tax does not increase in times of War
Whenever there is war, national conflict, or summer travel season, gasoline and diesel prices usually go up. During times of stability, the price of gasoline and diesel might come back down.
But gasoline prices don’t affect the amount of federal or state gasoline taxes paid at the pump.
“The federal gas tax is a fixed 18.4 cents per gallon that does not adjust to inflation or fuel prices – a rate that has survived three wars, several recessions, and a pandemic without a single change.“
PS. The sales tax will go up with the price of gasoline and diesel.
Scary Fact No. 7: For Gas Tax Size Does Matter
We buy gas tax by the gallon, but we spend it by the mile.
Size, weight, horsepower and acceleration all affect how much gasoline tax a driver spends.
Depending on the size of their car, a typical driver spends $0.02 to $0.04 per mile on all gas taxes and fees combined. This is also the amount that several states would want to tax EVs with a road usage charge.
“According to The Oregonian, the “road usage charge” of 2.3 cents per mile will go into effect for existing EV owners on July 1, 2027. Hybrid owners will be reimbursed for any gas tax they paid.“
Scary Fact No. 8: The Gas Tax is a Vice Tax
Excise taxes – like the gasoline or diesel taxes – are known under many different names. The most common is “vice tax.” These are products like tobacco, alcohol, sugar, cannabis, gambling, guns, tanning beds, coal, and fossil fuels. These are all things we know are bad for us, but we still buy them anyway, and lawmakers know we are willing to pay for them.
“Vice – a practice or habit considered to be evil, degrading, or immoral.“
Scary Fact No. 9: The Gas Tax is an Addiction Tax
We already know that products like tobacco, alcohol, sugar, cannabis, or fossil fuels can have all kinds of ‘side effects’. We also know that behaviors like smoking, boozing, betting, gambling, tanning, or driving a car can create a dopamine high – ‘making them happy’. Most of these products are known to lead to either substance abuse or behavioral addiction.
“Addiction – a chronic condition characterized by the compulsive pursuit of a substance or behavior despite significant harm, marked by an impaired ability to stop or control the behavior, escalating priority given to it over other activities, and (for substances) often tolerance and withdrawal.“
Scary Fact No. 10: The Gas Tax isn’t enough to counter Addiction
According to the data collected for the 38 OECD member states, the three North American countries Canada, the USA, and Mexico score the lowest on the ‘paying for their addiction’ scale.
Many cities in OECD countries have nicer streets, more street lighting, fewer potholes, better public transit, and safer infrastructure for children.
Americans prefer culture wars.
So the federal gas tax has been frozen at 18.4 cents since 1993. Indexed to inflation, it would be more than double that today. Congress just doesn’t have the guts to charge for America’s most prominent addiction.
In 1993, the Dow Jones industrial average was still well under 4,000, the average cost of a Major League Baseball ticket was under $10, and a MLB hotdog was $2.50.
Scary Fact No. 11: The Gas Tax is No Infrastructure Tax
For the gasoline tax to be called an infrastructure tax, it would actually have to pay for all infrastructure. Historically, tolls on ferries, tunnels, bridges, toll roads, and turnpikes paid for infrastructure, and the gasoline tax paid down the national debt.
The gas tax started as a temporary measure to pay down debt. Then ‘temporary’ became permanent when President Eisenhower promoted the Interstate Highway System, claimed the gas tax could pay for all these ‘freeways,’ and turned away from building toll roads.
According to the Tax Foundation, a large share of road spending comes from general revenues or is deficit financed. In other words, it adds to the national debt, which makes those new highway lanes even more expensive than we are told.
“With Americans driving approximately 3 trillion miles each year, total road spending by state and local governments equates to an average of 5.1 cents per mile driven. To cover these costs, Americans paid an average of 0.4 cents per mile in tolls and user fees, 1.4 cents in state fuel taxes, and 0.8 cents in vehicle license taxes. The remaining 2.5 cents was covered by general state and local revenues (1.0 cent) and federal aid (0.9 cents derived from the federal gasoline tax and 0.6 cents derived from general federal revenues).”
[Tax Foundation, 2014]
The Tax Foundation calculations look even worse a decade later.
Scary Fact No. 12: We pay for driving with the Sinner’s Tax
The Seven Deadly Sins are Sloth, Gluttony, Pride, Lust, Envy, Greed, and Wrath.
Products like alcohol, sugar, or guns and activities like gambling, smoking, or tanning might fit one or two of those sins. Only the topic of cars, gasoline, and driving covers all seven.
Driving a car even covers a few additional variations of those sins like Evil Thoughts, Temptation, Vanity, Entitlement, and Sadness (probably as a predecessor of depression).
“The Seven Deadly Sins are the capital vices that generate all other sins. They are a personal betrayal of your own better judgment.”
Scary Fact No. 13: The Gas Tax is a Socialist Welfare Program
For 2019, the NHTSA took a look at just the crashes. It established that when quality-of-life valuations are considered, the total value of societal harm from motor vehicle crashes in 2019 was nearly $1.4 trillion.
Since 2008, the Highway Trust Fund (HTF) has received close to $300B in bailouts from the general fund. Because these are one-way transfers that never get paid back, even people without cars are paying for freeways they’ll never use.
“The lion’s share of transportation funding should come from user fees (amounts a user pays directly for a service the user receives, such as tolls) and user taxes (amounts a user pays, based on usage, for transportation, such as fuel and motor vehicle license taxes). When road funding comes from a mix of tolls and gasoline taxes, the people that use the roads bear a sizeable portion of the cost. By contrast, funding transportation out of general revenue makes roads “free,” and consequently, overused or congested—often the precise problem transportation spending programs are meant to solve.”
[Tax Foundation 2014]
Conclusion
Don’t fear ‘Socialists’ will be running this country; the car-socialists already do.
More Information
- Blog: How high is the outrageously over-the-top yearly gas tax hike really?
- Blog: Three Ways to Outsmart the Next Gas Tax Hike
- Halloween: The Seven Deadly Sins of Driving
- All-Saints? Only Sinners In These Buildings
- The Biggest Winners from Tariff Refunds are Big Corporations
- The Seven Sins of Car Commercials
- Gasoline Taxes and User Fees Pay for Only Half of State & Local Road Spending
Editor’s Note: The views and opinions expressed in all blog posts are those of the authors and do not necessarily reflect those of the Redwood City Pulse or its staff.
Man, 51, arrested for indecent exposure involving children by Sequoia StationOctober 29, 2026 11:01 am
