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Cost of Driving: How Much Taxpayers Are Actually Paying

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Not only are gas prices rising, but every year consumers pay big for medical and insurance costs, they lose hours -- and sometimes days -- stuck in traffic, and on average pay more than $100 in fuel taxes.

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The American Society of Civil Engineers (ASCE) recently concluded that congestion on America's roads is worse than ever. Of course, no one looks forward to a headache-filled commute. But what are the real costs associated with roadway congestion, automotive travel and your daily drive?

In light of the economic downturn and rising fuel costs, consumers reducing unnecessary travel to save money -- opting instead for money-saving methods like public transit, biking, and the "staycation" -- swept the headlines.

For the short-term, all the effort to reduce travel seemed to make a difference on America's roads. According to the Texas Transportation Institute (TTI) 2010 Urban Mobility Report, both 2007 and 2008 showed slight decreases in traffic congestion, with 2008 being a prime year for commuters. But that's all about to change; 2009 congestion numbers have worsened.

Consumer confidence is rearing its head again, as are slight indications of a pre-recessionary return to spending. If recent activity in the auto industry is any indication, Americans seem to have a renewed interest in hitting the road again. Top automakers like General Motors (GM), Ford (F), Chrysler, Toyota (TM), Honda (HMC), Nissan and Hyundai all posted year-over-year sales gains of no less than 13% as of January 2011.

Despite the fact that it costs more today to hit the road than it has in the past few years, consumers aren't slowing down. This week in 2009, the average price of regular gas nationwide was $1.89. Today, prices have crept back up to $3.09 a gallon for regular gas, on average, according to the US Energy Information Administration.

Additionally, there is the factor of lost time and safety. Back in 1982, a commuter spent 14 hours a year sitting in congestion. Today, that number has more than doubled, costing the average commuter 34 hours of lost time, just waiting in traffic. For residents of Chicago and Washington DC, that number more than doubles. The average commuter in those cities loses a whopping 70 hours a year sitting in traffic, according to TTI.

The cost of safety? ASCE's 2009 Report Card for America's Infrastructure reports that "motor vehicle crashes cost the US $230 billion per year -- $819 for each resident in medical costs, lost productivity, travel delays, workplace costs, insurance costs and legal costs."

With all these costs of commuting adding up, what can be done? ACSE (which rated America's current road infrastructure as a "D") suggests that federal funding is a large part of the issue, citing a shortfall of nearly $550 billion in five-year funding. (The current estimated five-year spend is $380.5 billion). But who really pays for this funding? As an American taxpayer, you do.

According to the American Road & Transportation Builders Association (ARTBA), the major source of funding for federal highway investment is the federal motor fuel excise tax (currently 18.4 cents per gallon of gasoline). Revenue is credited to the Federal Highway Trust Fund, which "finances virtually all federal investment in highways and mass transit. Highway user tax rates have not been increased since 1993 despite large increases in highway travel, investment needs and construction costs."

State governments also finance some highway construction and maintenance through a broad set of user-related fees and taxes. If you've ever wondered how fees like a driver's license and registration, traffic violations and automobile sales tax are used, they, in part, go to roadway funding. Fees range from "a low of eight cents per gallon in Alaska to over 30 cents per gallon in a handful of states," according to ARBTA.

And how much do you contribute to roadway improvements? Assuming a "tax rate of 18.4 cents per gallon, consumers pay an average of $102.49 per year in federal gasoline taxes, for each vehicle they own," according to ARBTA. If you have two cars, depending on the fuel efficiency and miles driven weekly on them, you probably pay about $4.14 per week in fuel tax.

To calculate exactly how much federal gasoline tax you pay per mile, determine how many miles your vehicle gets per gallon of gasoline. Divide that number into 18.4 cents per gallon to calculate your tax cost per mile. If your vehicle averages 15 miles per gallon, the federal gasoline tax costs you one-and-a-quarter penny for every mile you drive. If your vehicle gets 25 miles per gallon, the tax costs you only three-quarters of a penny per mile.

To read more about costs drivers face, see What Goes Into the Price of Gasoline?
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