US bill proposes new national EV tax, while some push to slash gas tax to zero

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US bill proposes new national EV tax, while some push to slash gas tax to zero

Jameson Dow | May 18 2026 - 10:17 am PT

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Lawmakers have proposed yet another punitive tax on EVs, attempting to balance road budgets solely on the back of the ~2% of vehicles that are responsible for a vanishingly small percentage of road damage.

Meanwhile, gas taxes haven’t gone up since 1993… and some are trying to eliminate them entirely, during a global fuel shortage that EVs are the solution to.

The US is back with another unfair EV tax proposal, and it’s not any smarter than the rest we’ve seen.

The new Surface Transport Reauthorization Bill was announced yesterday by the Transportation and Infrastructure Committee, with the shorthand name “BUILD America 250.” It’s being called a bipartisan compromise, between Sam Graves (R-MO) and Rick Larsen (D-WA), who introduced it.<br>Advertisement - scroll for more content

It’s an omnibus bill intended to deal with the next five years worth of transportation issues in the US, covering federal highway funding, transportation studies, public transportation, railroads and the like.

But, as we’ve become accustomed to here in the one country that seems dedicated to keeping its residents stuck in a dirty past where they are beholden to the most evil industry the planet has ever seen, it attacks clean transportation options while letting expensive, dirty ones get off without paying their fair share.

What the bill does

The bill includes a provision for an annual tax on electric vehicles, set at $130/year for fully electric vehicles and $35/year for plug-in hybrids. Those taxes also get an automatic annual increase of $5/year (thats 14% for the PHEVs and 4% for the BEVs), up to a cap of $150 and $50 each.

The taxes would be collected by states, and if states refuse to collect the tax, the federal government could punish them by withholding transportation funds. This is in contrast to a previous attempt which would have charged $200/year, but had no collection method attached and was dropped because it would have been too complicated to set up a national registration scheme.

The previous tax was also floated by Graves, who received $163,300 in bribes from the oil & gas industry in just the last campaign cycle. So we’re pretty sure this idea came from him, rather than from the other co-sponsor, Larsen – but the latter still put his name on it. The fossil fuel industry started pushing for unfair EV taxes across the US a decade ago.

In addition, the bill cuts funding for clean transportation in several ways – EV charging, freight electrification and electric buses, and cuts programs for disadvantaged communities. So despite raising taxes on EVs, it also reduces funding for them, ensuring America falls further behind on clean transportation, and harming US industry.

Bill overcharges EVs, letting polluters off scot-free

Similar road taxes are already in place in many states, usually far in excess of the amount that gas vehicles pay. Some states even have EVs pay multiple taxes, for both road use and charging, for example in Kentucky and Iowa.

These have been implemented under the guise of “making EVs pay their fair share” for the road damage they do, even though they are almost always not indexed by any measure of road damage like mileage or vehicle weight. Also, virtually all road damage is done by large trucks anyway (an 80,000lb, 50k mi/yr semi truck does over 500,000x more damage than my 2,800lb, In contrast to the punitive tax the new federal bill lays on EVs, it does not do anything to change the federal gas tax, which sits at just 18.4 cents per gallon. That number is easy to remember, because it hasn’t changed since 1993 .

This has led to decades of highway underfunding, meaning that gas tax revenue hasn’t been anywhere near the amount required to pay for roads.

(Rep. Rouzer, on the Transportation committee, even bragged about how long it has been since gas taxes were raised, calling the EV tax “the first new stream of revenue for infrastructure in over three decades.”)

On average, each gas car pays about ~$80/year in federal gas tax, which is about half what the final annual tax for EVs would be.

Meanwhile, the EV tax is set with an automatic annual riser – something that could have been added to the gas tax, but strangely wasn’t. I wonder if those oil bribes had anything to do with that.

In total, the new taxes would raise somewhere on the order of ~$700 million per year from the 5.3 million EVs currently on US roads. US public spending on transportation is somewhere around $400 billion per year, making the money raised by these taxes a drop in the bucket.

Oil caused this problem, EVs have to solve it?

What the tax could do, though, is make EVs less...