Policy Research

Does Perception of Gasoline Taxes Paid Influence Support for a State Gas Tax Increase for Highway Improvements? Evidence from California and Michigan

Ronald Fisher, Robert Wassmer

Summary

The article examines households in both Michigan and California and attempts to discover perceptions about gasoline excise taxes, and driving behavior. The study finds that consumers typically overestimate the total fuel taxes paid by a large margin, although they are typically quite accurate in predicting average driving distance per year. It also finds that consumers typically recognize the conditions of roads and the need for repair but are dis proportionately opposed to spending increases.

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Policy Implications

This article can be used in an attempt to find methods to increase funding for road repair and infrastructure. The findings suggest that if proposals to increase excise taxes are matched with public education campaigns designed to educate households on the true cost of fuel taxes then support for increasing taxes on fuel will be much greater. The study also finds that consumers inaccurately believe that they will face 100% of the burden of a fuel tax increase.