Critics of higher gas taxes will note that some gas tax revenue is diverted to non-highway purposes. That's true, but the amount was only $24 billion in 2008, less than half the amount of general revenue diverted to highways. $15 billion of the gas tax diversion was to mass transit, whose use produces positive externalities for drivers by reducing traffic. And that $24 billion only approximately offsets the value of a major tax preference for drivers: the fact that in almost all states, gasoline sales are not subject to general sales tax. Overall, drivers are net recipients of a significant and growing government subsidy, which a change to the gas tax could help offset.
I don't agree with his last line, necessarily, that this should be used as an excuse to then extend the Bush tax cuts. But overall, very good piece.