What is the best strategy to formulate to improve fuel taxes and optimality?

 

Optimizing Fuel Tax

Fuel tax is already threatened as the world edges closer to using more fuel-efficient vehicles and electric cars. As such, it means that the Highway Trust Fund income collected from the fuel tax is at stake (Kontou, n.d.). Again, there is a concern that poor households will keep on paying more fuel tax as they lack resources to buy fuel-efficient vehicles (Kontou, n.d.). Most of these people use vehicles that consume a lot, meaning they may pay more than the rich people, who can afford efficient cars, which is not fair.  

To eliminate the impending threat, I recommend a strategy of taxing more fuel tax to manufacturers of fuel-efficient cars. In the fuel tax system, the focus is on capturing tax at the manufacturer's point, but the cost is later passed to the consumers (Kontou, n.d.). To secure the future of fuel tax, there is a need to tax more fuel-efficient units as their demand is projected to increase (Kontou, n.d.). Doing so will help maintain the revenue collected from the fuel taxes. Again, this is a strategy to avoid overburdening only the customers using low efficient taxes. It will help address the issue of fairness in fuel taxes.