Think the gas tax in Washington State is too high? According to this report (careful, it’s a .pdf) from the Seattle-based Economic Opportunity Institute, total gas tax receipts, as a share of total personal income in the state, are about as low as they’ve been for more than a generation. Take a look at this chart, from the EOI report:
Now, the fact that gas tax receipts are low in historic terms doesn’t, by itself, argue for or against any particular level of gas taxes. In fact, even though gas today’s taxes seem relatively low—and the state’s business community, among others, has been clamoring for new transportation investments—there are significant downsides to Washington’s recent gas tax increases. Like most consumption taxes, gas taxes fall disproportionately on those at the bottom rungs of the income ladder, so hiking the gas tax without lowering, say, sales taxes might add an unfair burden to the poor. Plus, under the state constitution, gas taxes must be spent on highways—so any potential fuel efficiency gains that might result from higher gas taxes might be offset by new road construction that encourages driving and facilitates suburban sprawl. These factors make me skeptical about Washington’s recent hikes in the gas tax. In general I’m in favor of higher gas taxes because of their potential to spur conservation; but as always, the devil is in the details.
Still, given these numbers, it’s hard to argue that Washington’s current gas tax is particularly burdensome. Overall, we’re so much richer than we used to be that today’s gas taxes—even with the recent increases—are relatively small potatoes.