History of Fuel Taxes
Why Fuel Taxes Replaced Property Tax Assessments
Free transportation content:
Resource Guide for the History of Cars and Highways
Pont Neuf: The First Modern Street in Paris
More More Motorized Traffic is Bad; Traffic Congestion is Good
“Urban Freeway” is an Oxymoron
Todd Litman and the Access Revolution
Image: Detroit Publishing Company, “[truck in rutted road, possibly road construction in Michigan,” (c. 1920). Source: Library of Congress.
Motor fuels taxes as a means of financing improvements to rights-of way was a critical piece to financing roads. Linking a new treatment of ROW to consumption of a new product necessary to use that new treatment of ROW is very sensible.
Charles Marohn, founder of the non-profit Strong Towns, stresses the difference between streets and roads. According to this distinction, streets are economic engines and roads simply convey traffic. This rhetorical distinction applies to present-day English. Say, “city streets and country roads,” then say “country streets and city roads.” The first rings sensibly while the second does not. The ancient Romans certainly acted according to a functional distinction of streets and roads, but did not distinguish them rhetorically. Via Appia was the highway that ran between Appia and Rome, while a few of the named urban streets were also viae: Nova Via and Sacra Via, for example. By the time of the Republic, Roman Italy paved both urban streets and intercity highways, which accounts for its system of ground transportation that remained unmatched for nearly two millennia.1
Arguably, the cities of Roman civilization and its fine, paved streets and roads depended on plundering other peoples. The practice of paving streets was probably largely lost in the western world. In the US, during the Early Republic, the best paved and maintained streets were located in the four large seaport cities: New York, Boston, Philadelphia, and Baltimore. These cities were the wealthiest and could afford more street improvements than less wealthy cities. The most common method for financing street improvements in the US was similar in some ways to the practice in Republican Rome: abutting property owners pay to pave and maintain streets. In the US, property owners on a block face elected to improve their segment of street, selected materials and design, while a local government assessed each property owner proportionately to their interest, and used these assessment revenues to finance the construction. Therefore, the quality of a street reflected the wealth and the preferences of the abutting property owners. It was also a finance system which facilitated improvements of urban streets, but with no financing mechanism for intercity highways.
Christopher Wells writes:2
The invisibility of gas taxes is partly a historical accident—the tax has always been an excise tax collected from wholesalers rather than a sales tax collected at the pump—but it also symbolizes the significant, yet opaque role that gas-tax revenues have played in underwriting the expansion of the nation’s vast automotive infrastructure. When automobile ownership began to surge in the late 1910s and early 1920s, gas taxes provided a new, almost magically large source of revenue that allowed states to embark on aggressive road-construction campaigns. But when strapped state governments in the early 1930s attempted to allocate a portion of gas-tax income to non-highway purposes, opponents launched a successful campaign that prompted a growing majority of state legislatures to earmark gas taxes for highway expenditures. This system, coupled with new highway-planning methods that prioritized “self-funding” highways, resulted in a powerful, self-replicating system in which new highways generated new traffic, which in turn generated new revenues that were legally reserved for more new highways.
This intuition of Wells that the invisibility of the motor fuels’ taxes make highway expansion more politically tenable is a good hypothesis for social science research. Yet there are other sound historical intuitions about the structure of finance for public rights-of-way (hereafter, ROW). Clay McShane notes the older custom of making abutting property owners responsible for improvements to ROW, which was an ancient practice still used in the United States in the nineteenth century.3
First, he argued that various interests had different goals for street improvements. Teamsters were concerned about being easy on the hooves; that is, they depended on mules and horses to carry their burden, so minimizing wear and tear on those animals and slippery surfaces aligned with their economic interests. Abutting property owners were concerned about being easy on the ears. Any surface that teamsters preferred implies more traffic and some of the surfaces that teamsters preferred created more noise. Therefore, the interests of teamsters and abutting property owners were usually poorly aligned. They were much better aligned when the abutting property owners engaged in commercial activities at those locations.4
More generally, the pre-modern or pre-industrial paradigm of urban streets assumed they were multi-functional corridors, which facilitated transportation as well as social and commercial activities. The modern street paradigm favors movement almost exclusively. The modern street paradigm caused a shift in who controlled their use and required different funding mechanisms and different physical attributes. As urban streets were re-imagined strictly as transportation corridors, control over them by abutting property owners and the preferences of residents did not make sense anymore. Once movement was the only consideration, control over streets changed hands from hyper-local interests to large units of government. Initially, municipalities managed streets within their jurisdictions more actively. With premodern streets, abutters were the main beneficiaries, so it made sense that their bore all the costs.
With modern streets and their imperative for movement, the benefits were more widely shared, so it made sense that their costs would be shared, too. It was no longer fair to expect abutters to pay for street maintenance and improvements under the modern paradigm. Instead of special property tax assessments accruing to abutting owners for improving streets on a block-by-block basis, municipalities organized improvement districts to build new infrastructure on the basis of a local network streets. This also corresponded to another emerging use of the modern street: as transportation easements for public utilities. These new municipal utilities included potable water, sewers, and gas for illumination. All of these required networks of underground conduits to convey matter over long distances. Hyperlocal control and financing was inconsistent with the design requirements of utility infrastructure.
By contrast with pre-modern urban streets, roads were always understood as single-use transportation corridors. Another appropriate name for public corridors between settlements is highways.
Fuel taxes in the United States started with the states. The first states to pass fuel taxes were OR (1919), CO (1919), and NM (1920), all sparsely populated western states. By 1930, all 48 states passed a motor fuels tax.5 Therefore, highway funding mechanisms and highway administrative systems developed in the states before these developed at the federal level. There is evidence of this legacy in a few present-day organizational structures. The American Association of State Highway and Transportation Organizations (AASHTO, founded as AASHO) remains a powerful transportation interest and the current deference of the US Department of Transportation to state departments of transportation is consistent with the days when they were known as state highway departments.
Ray Laurence, The Roads of Roman Italy: Mobility and Cultural Change (London: Routledge, 1999), 13-21;
Christopher W. Wells, “Fueling the Boom: Gasoline Taxes, Invisibility, and the Growth of the American Highway Infrastructure, 1919–1956,” Journal of American History 99, no. 1 (June 2012): 72.
Clay McShane, Down the Asphalt Path: The Automobile and the American City (New York: Columbia University Press, 1994), 6-7,
McShane, Down the Asphalt Path, 57-67.
John Chynoweth Burnham, “The Gasoline Tax and the Automobile Revolution,” Mississippi Valley Historical Review 48, no. 3 (1961): 435; James Flink, The Automobile Age (Cambridge: MIT Press, 1988), 371.