Effects Of A $0.25 Federal Gas Tax Increase On U.S. Economy, Fuel Use, Fleet Composition

The U.S. Chamber of Commerce’s proposal to raise the federal fuel user fee (gas tax) $0.25 per gallon has driven debate over U.S. transportation funding. This research note finds the proposal would generate $1.1 trillion in federal government revenue by 2050 and cost U.S. drivers $40 billion per year by 2025. It would also increase annual EV sales by 210,000 per year and add 2.5 million total additional EVs to U.S. roads while reducing annual fuel consumption 30-38 million barrels and cutting total fuel use more than 1.3 billion barrels, both by 2050, and would equal a national carbon tax of $29 per ton.

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