On June 6, 1932, President Herbert Hoover imposed the first ever national gasoline tax in the United States, initially set at 1 cent per gallon.
It was a major success for the federal government; the tax on gasoline alone was responsible for over 15% of their 1933 tax revenue.
What’s curious is that the Senate Finance Committee issued a report the following year stating that the federal gasoline tax should be repealed. But that never happened.
Instead it went up.
Under President Eisenhower, the tax increased to 3 cents per gallon. Under Reagan, 9 cents.
It’s risen steadily through the years to a level of 18.4 cents for every gallon of unleaded fuel, and 24.4 cents per gallon of diesel.
All of this tax revenue is –supposed– to go to the Federal Highway Trust Fund, something established back in the 1950s to finance the care and maintenance of the nation’s highways.
And now it, too, is insolvent.
Earlier this week I told you about Social Security’s Disability Insurance Trust Fund (DI), which will become insolvent in a matter of months.
The DI problem (just like the rest of Social Security) has been a long time coming.
But rather than form some meaningful solution, Congress has instead opted to commit financial fraud by commingling DI monies together with the other Social Security funds.
Now comes the Highway Trust Fund.
The difference between DI and the Highway Trust fund is that this one won’t be insolvent in a matter of years or months. Their own data shows that it may very well be toast… today.
Once again- Congress to the rescue.
Having waited until almost quite literally the last minute, their solution is to… wait for it… kick the can down the road.
Congress has now passed a 90-day stay of execution for the Highway Trust Fund, which only delays the inevitable.
Over the next three months they’ll sit down to the task of figuring out who to steal from.
They’re either going to raise taxes on you.
Or they’ll raise taxes on someone else, the costs of which will ultimately be passed on to you.
Or they’ll simply default on their obligations to the residents of the United States to maintain the federal highway system.
None of this should come as a surprise. This is what happens when nations go bankrupt: one by one, its major institutions fall into insolvency.
Today it’s the Highway Fund. Tomorrow it’ll be the Pension Benefit Guarantee Corporation (we’ll talk about that one soon) and the United States Postal Service.
Then it’ll be Social Security and Medicare. Then the Federal Reserve. And eventually it’ll be the United States government itself.
The signs are everywhere– every single one of these hallowed institutions is flat broke.
It’s no longer some wild assertion to say that. Their own financial statements show that they’re insolvent. And it’s not hard to figure out what happens down the road.
Bankrupt governments invariably resort to plundering the wealth of their citizens. Inflation. Higher taxes. Confiscation of assets. Indebting unborn generations. And defaulting on the benefits promises they made to voters.
It’s time to face reality. And to start working on a Plan B.