Thoughts on Transparency: Full Disclosure of Gasoline Taxes

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One of Pioneer Institute’s ongoing goals is to promote government transparency in the state. With the 2015 release of Agenda for Leadership, Pioneer’s James Stergios and Mary Connaughton put forth a comprehensive plan to increase the economic freedom and mobility of Massachusetts citizens.  To do so, transparency plays a crucial role.  After all, citizen engagement is the very heart of a healthy democracy.

One of the ideas in Agenda for Leadership concerns the disclosure of motor vehicle fuel taxes. Information on state fuel taxes is available online (the Mass. DOR website publishes the information, and the American Petroleum Institute website has state-by-state information as well), but the vast majority of residents may not be aware of the extent of these taxes when they go to the pump. Gas stations display the total price per gallon, but tax figures are completely left out.

That doesn’t happen with other retail purchases.

With gas prices falling in recent months, the hidden impact of fuel taxes goes up. Given that the Massachusetts total of state and federal fuel taxes stays constant at 44.94 cents per gallon, and with regular average fuel prices in the state down to $1.835 per gallon as of Feb. 9, taxes now make up close to a quarter of what customers pay at the pump. That’s a significant expense that consumers should be made aware of.

Like many transparency-related issues, this problem has a simple solution. The government should require gas stations to post stickers with tax information near where fuel prices are on display.

We see positive developments on this front, as State Senate Minority Leader Bruce Tarr (R-Gloucester) introduced amendments to Mass. Public records law (S.2120) which included a requirement that taxes on diesel fuel and gas be put on display at the pumps where they are dispensed. This is a welcome step to provide better information to consumers. The government has an obligation to effectively disclose information on the actions it takes and taxes it imposes on constituents, and Pioneer Institute remains committed to advocating for this basic right to transparency.

Michael Weiner is a student at Northeastern University studying International Affairs.  He is working as a Research and Programs Assistant at Pioneer Institute through the Northeastern Co-op program.  Find Michael on Twitter at: @michaelgweiner