Photo: Columbia River Gorge & Sagebrush Steppe, I-90, Washington. © 2016 Delena Norris-Tull
Federal excise taxes
Summary prepared by Dr. Delena Norris-Tull, Professor Emerita of Science Education, University of Montana Western, December, 2020.
Some State and Federal taxes can be used directly or indirectly to support conservation management or invasive species management.
Federal excise taxes are consumer taxes the Federal Government collects on a wide variety of items, including (but not limited to) motor fuels, tobacco products, alcohol, firearms, airline tickets, water transportation services, local telephone services, wagering, coal, trucks, and some health-related services. States can also levy excise taxes. For example, most states have an excise tax on tobacco products.
Excise taxes are transferred to a a wide variety of Federal funds. Roughly 40% of Federal excise taxes (e.g., tobacco, alcohol, firearms, ammunition, telephone, and wagering taxes) go directly to the General Fund. But many are designated for specific Trust Funds.
Various fuel taxes and trucking fees go to the Highway Trust Fund (to pay for highways and mass transit, including grants for State transportation projects).
Aviation fuel taxes and air transportation taxes go to the Airport and Airway Trust Fund.
Boating fuel taxes and sport fishing gear taxes go to the Sport Fish Restoration and Boating Trust Fund.
Coal taxes go to the Black Lung Disability Trust Fund.
Shipping cargo taxes go to the Harbor Maintenance Trust Fund.
Taxes on oil go to the Oil Spill Fund.
Shipping fuel taxes go to the Land and Water Conservation Trust Fund.
And there are several smaller environmental- and health-related trust funds.
When originally conceived, the distribution of excise taxes made a lot of sense. Consumers were taxed based on what they personally used, which seemed to be a fair means of taxing the public. And specific State and Federal projects had dedicated funding streams. Originally, some (but not all) Federally funded services were funded adequately via excise taxes. For example, Highway projects used to be funded entirely from excise taxes. But in recent years, many Federal funds, including the Highway Fund, have had to be supplemented by transfers from the General Fund. Changes in demographics and consumption changes how much tax specific items produce. For example, as Americans started purchasing vehicles with improved fuel economy, they paid lower excise taxes on the purchase of that fuel. And too often, the General Fund has borrowed money from the Trust Funds, thus maintaining an actual “IOU” to those funds. As a result, some legislators question the validity of maintaining these diverse funds.
Which of these Federal Trust Funds could be used for conservation and invasive species management projects? Technically, several of them could be used for that purpose, as long as there is an indirect relationship between the intended purpose for that Trust Fund and the conservation project, and if there are not legal restrictions on the fund that would prohibit that use.
Many of these funds provide grants to the States. But in reality, many of these Trust Funds no longer collect enough money to fund the projects for which they were originally intended. So the problem remains, that the Federal Government does not provide adequate funds to enable States to protect critical habitat and fish and wildlife populations.
Previous Sections on Federal Legislation:
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Federal excise taxes
Summary prepared by Dr. Delena Norris-Tull, Professor Emerita of Science Education, University of Montana Western, December, 2020.
Some State and Federal taxes can be used directly or indirectly to support conservation management or invasive species management.
Federal excise taxes are consumer taxes the Federal Government collects on a wide variety of items, including (but not limited to) motor fuels, tobacco products, alcohol, firearms, airline tickets, water transportation services, local telephone services, wagering, coal, trucks, and some health-related services. States can also levy excise taxes. For example, most states have an excise tax on tobacco products.
Excise taxes are transferred to a a wide variety of Federal funds. Roughly 40% of Federal excise taxes (e.g., tobacco, alcohol, firearms, ammunition, telephone, and wagering taxes) go directly to the General Fund. But many are designated for specific Trust Funds.
Various fuel taxes and trucking fees go to the Highway Trust Fund (to pay for highways and mass transit, including grants for State transportation projects).
Aviation fuel taxes and air transportation taxes go to the Airport and Airway Trust Fund.
Boating fuel taxes and sport fishing gear taxes go to the Sport Fish Restoration and Boating Trust Fund.
Coal taxes go to the Black Lung Disability Trust Fund.
Shipping cargo taxes go to the Harbor Maintenance Trust Fund.
Taxes on oil go to the Oil Spill Fund.
Shipping fuel taxes go to the Land and Water Conservation Trust Fund.
And there are several smaller environmental- and health-related trust funds.
When originally conceived, the distribution of excise taxes made a lot of sense. Consumers were taxed based on what they personally used, which seemed to be a fair means of taxing the public. And specific State and Federal projects had dedicated funding streams. Originally, some (but not all) Federally funded services were funded adequately via excise taxes. For example, Highway projects used to be funded entirely from excise taxes. But in recent years, many Federal funds, including the Highway Fund, have had to be supplemented by transfers from the General Fund. Changes in demographics and consumption changes how much tax specific items produce. For example, as Americans started purchasing vehicles with improved fuel economy, they paid lower excise taxes on the purchase of that fuel. And too often, the General Fund has borrowed money from the Trust Funds, thus maintaining an actual “IOU” to those funds. As a result, some legislators question the validity of maintaining these diverse funds.
Which of these Federal Trust Funds could be used for conservation and invasive species management projects? Technically, several of them could be used for that purpose, as long as there is an indirect relationship between the intended purpose for that Trust Fund and the conservation project, and if there are not legal restrictions on the fund that would prohibit that use.
Many of these funds provide grants to the States. But in reality, many of these Trust Funds no longer collect enough money to fund the projects for which they were originally intended. So the problem remains, that the Federal Government does not provide adequate funds to enable States to protect critical habitat and fish and wildlife populations.
Previous Sections on Federal Legislation:
- 1930s Federal Laws on Invasive Species
- Federal Seed Act 1939
- 1940s-1960s Federal Laws on Invasive Species
- 1970s Federal Laws on Invasive Species
- 1980s Federal Laws on Invasive Species
- 1990s Federal Laws on Invasive Species
- 2000-2010 Federal Laws on Invasive Species
- 2011-2022 Federal Laws on Invasive Species
- Federal Bills on Invasive Species not passed
- Executive Orders on Invasive Species
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