Why Do You Need to Pay Federal Tax on Gasoline?

Why Do You Need to Pay Federal Tax on Gasoline?

Why Do You Need to Pay Federal Tax on Gasoline?

Federal taxes on gasoline are an important part of funding highway spending, according to The New Yorker. The money goes to building and repairing roads. The gas tax is a user tax, because people who spend a lot of time driving typically buy more gas and, therefore, pay more taxes.

The federal gas tax is on each gallon of gas bought at the pump, explains The New Yorker. States collect gas taxes for infrastructure expansion and maintenance as well, as the Tax Foundation reports. Some states follow the federal model, while other states use different methods, such as wholesale taxes. In another approach, the amount of tax varies by the average prices within a certain time period.