Gas tax evasion:

Gas tax evasion

Gas tax is such a simple clean way of collecting money for US roads. Like heck! State estimates of evasion on the gas tax alone range between 1.2% and 7%. If the average evasion is 4% for gasoline it is probably 10% for diesel, because (1) the greater ease of evasion with so many untaxed uses (heating oil, generators, boilers, boats, farm equipment, construction equipment) and (2) the greater incentive to evade in the large number of trucking businesses that make their living out of diesel engines. That’s an evasion rate higher than in tolling. In addition a toll evader is a toll evader, usually one guy, but gas tax evasion is organized crime – big time corruption, fraud, intimidation and racketeering.

If evasion of motor fuel tax in the US overall is 4% then with $54b collected in 1998, the loss would be $2.2b. Or if it were 5% to allow for a higher rate of diesel racketeering, the loss would be $2.7b. (“Road Fund Tax Evasion: a State Perspective” The Council of State Governments and Council of Governors Policy Advisors, Lexington KY, 1996 p30)

Washington Post’s Dr G on