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Mackinac Center for Public Policy
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2013 Senate Bill 87: Replace current fuel taxes with higher wholesale tax
  1. Introduced by Sen. Roger Kahn (R) on January 30, 2013, to replace the current 19-cent per gallon gas tax and 15-cent diesel tax with a new tax based on the wholesale price of fuel, initially levied at a rate of 37 cents per gallon. This would also become the minimum gas tax rate even if wholesale prices fell. If wholesale prices rose the maximum tax would be 50 cents per gallon, but the rate could not rise more than a penny in any single year.
    When added to current federal fuel taxes and the 6 percent state sales tax also imposed on fuel (revenue from which does not go to roads), this would give Michigan the nation’s highest total gasoline tax levy at nearly 74 cents per gallon, assuming current wholesale and after-tax pump price levels of around $2.74 and $3.50, respectively. (New York is currently number 1 at 67.4 cents per gallon.) Reportedly this would represent a $1.6 billion net tax hike. See also Senate Joint Resolution J, a “Plan A” alternative that would instead hike the state sales tax to 8 percent and use the extra revenue to replace current fuel taxes.
    • Referred to the Senate Appropriations Committee on January 30, 2013.

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