A Progressive Gas Tax?

One of the criticisms of gas taxes is that it is regressive, i.e., everyone pays the same per-gallon price. A Mississippi legislator has a solution: Eliminate the income tax on the lowest income bracket in exchange for hiking the gas tax 12-cents.

2 minute read

February 5, 2018, 11:00 AM PST

By Irvin Dawid


Gas

Paul Latham / Shutterstock

A year ago, the Institute on Taxation and Economic Policy (ITEP) pointed to Mississippi as one of a dozen states that would debate increasing its gas tax, fourth lowest in the nation after Alaska, Oklahoma, and Missouri. The 18.79-cents per gallon gas tax was last increased over 30 years ago.

"Mississippi is in dire need of revenue to repair and maintain its crumbling roads and bridges, but there are doubts that the legislature can come to agreement on a fix despite two obvious options: raising the state's outdated gas tax or repealing last year's misguided tax cuts," wrote Meg Wiehe (posted here). More on those '"misguided tax cuts" below.

While Mississippi was not among the eight states that successfully increased their state gas taxes last year, the effort continues, with the latest proposal coming from House Transportation Committee Chairman Charles Busby, a Pascagoula Republican, reports Jeff Amy for the Associated Press on Feb. 1

His proposal would phase out income tax on the lowest bracket, those earning between $5,001 and $10,000, over four years, costing the state $165 million in lost income.

In return, the gas tax would be raised by 12 cents, and the 18.40 cents-per-gallon diesel tax hiked by 15 cents, both phased over four years. New revenue would amount to $302 million. Fuel taxes would also be adjusted for inflation.

However, this isn't just a dollars to dollars comparison with the fuel tax looking like a winner, because revenues go to and come from different funding pots.

The state's general fund loses $165 million while the Department of Transportation gains $302 million, and that has Sen. Hob Bryan, D-Amory, a supporter of hiking the gas tax, opposed, reports Bobby Harrison for the (Tupelo, MS) Daily Journal on Feb. 4.

“The problem is there is not enough money in the general fund to get by,” he said. “...Long-term we are not going to be able to maintain the core functions of government.”

The loss of general fund revenue is exacerbated due to the aforementioned "misguided tax cuts."

The Legislature already has passed about 50 tax cuts that will take more than $700 million (in today’s dollars) annually out of the general fund when fully phased in. Those tax cuts already have had a negative impact on the general fund of more than $300 million per year.

Busby's plan would also follow the path seen recently in many other states to ensure that motorists who pay little or no fuel taxes would pay for roads by applying new hybrid and electric vehicle (EV) annual registration fees, though the fees he suggests would break a record for being among the highest proposed, $150 and $300 respectively.

Hat tip to AASHTO Daily Transportation Update 

Thursday, February 1, 2018 in Associated Press

portrait of professional woman

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching. Mary G., Urban Planner

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching.

Mary G., Urban Planner

Cover CM Credits, Earn Certificates, Push Your Career Forward

Logo for Planetizen Federal Action Tracker with black and white image of U.S. Capitol with water ripple overlay.

Planetizen Federal Action Tracker

A weekly monitor of how Trump’s orders and actions are impacting planners and planning in America.

July 16, 2025 - Diana Ionescu

Green vintage Chicago streetcar from the 1940s parked at the Illinois Railroad Museum in 1988.

Chicago’s Ghost Rails

Just beneath the surface of the modern city lie the remnants of its expansive early 20th-century streetcar system.

July 13, 2025 - WTTV

Blue and silver Amtrak train with vibrant green and yellow foliage in background.

Amtrak Cutting Jobs, Funding to High-Speed Rail

The agency plans to cut 10 percent of its workforce and has confirmed it will not fund new high-speed rail projects.

July 14, 2025 - Smart Cities Dive

Worker in yellow safety vest and hard hat looks up at servers in data center.

Ohio Forces Data Centers to Prepay for Power

Utilities are calling on states to hold data center operators responsible for new energy demands to prevent leaving consumers on the hook for their bills.

July 18 - Inside Climate News

Former MARTA CEO Collie Greenwood standing in front of MARTA HQ with blurred MARTA sign visible in background.

MARTA CEO Steps Down Amid Citizenship Concerns

MARTA’s board announced Thursday that its chief, who is from Canada, is resigning due to questions about his immigration status.

July 18 - WABE

Rendering of proposed protected bikeway in Santa Clara, California.

Silicon Valley ‘Bike Superhighway’ Awarded $14M State Grant

A Caltrans grant brings the 10-mile Central Bikeway project connecting Santa Clara and East San Jose closer to fruition.

July 17 - San José Spotlight