The problem is twofold: First, the tax has failed to keep up with the rising cost of highway construction and repair. And second, improved fuel economy means that more driving won't be matched by higher gasoline sales, and that how much people pay for the roads won't necessarily reflect how much they use them.
Some of the options:
Tax the Miles
Tax motorists on the miles they drive. Many economists argue that such a tax—known as a vehicle-miles-traveled tax or mileage-based user fee—is the fairest, most sustainable replacement for the gasoline tax. The problem is how to track the miles. States could simply check a vehicle's odometer when drivers come in for annual registration renewals or pollution tests and give the driver a tax bill based on miles driven in the past year. But some skeptics say this is an invitation to odometer tampering. Drivers also would be hit with a large tax bill once a year instead of paying out the tax every time they fill their tanks.
So some states are looking to technology. With in-car Global Positioning Systems or GPS-enabled smartphones, the government could keep track of how many miles people travel in their cars, the roads they drive on and the time of day they make the trips.
Another problem is the cost of collection. The gas tax, whatever its drawbacks, is cheap to administer—taxes are collected at the refinery and passed on to consumers at the pump. Tracking miles and assessing taxes on individual drivers is more expensive. One solution would be to have third parties collect the tax. A wireless provider could add the tax as part of a data plan, for instance.
Tax the Roads
Many support a more limited form of mileage-based user fees: toll roads. Relying more on tolls is already helping states make up for lost gas tax revenues; over the past decade, about a third of all new limited-access road miles have been paid for with tolls.
Some favor changing the gas tax so that it at least keeps up with the rising cost of construction without requiring lawmakers to cast a series of politically unpopular votes to raise the tax rate.
A simple approach would be to replace the per-gallon tax with a percentage-based sales tax.
Tax Oil, Not Gasoline
Another way to fill the gap in transportation revenue and needs is to broaden the tax base, replacing the current federal tax on gasoline and diesel fuel with a levy on every barrel of oil consumed in the U.S.
Washington could also fill part of the gap in gas-tax revenue by taking a page from the states and assessing a charge on vehicle registrations. (WSJ, 9/17/2012)