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Although the federal gasoline tax played multiple roles in financing surface transportation infrastructure in the United States, experts did not agree on the tax's purpose. Some argued that it was essentially a fee for users of the nation's federally supported highways. Others suggested that it should play a more prominent role in environmental, energy, and transportation policy by correcting for driving-related externalities. Still others suggested that it should be used to reduce the federal budget deficit. Finally, the tax itself had remained at the same level since 1993, and with the Highway Trust Fund virtually insolvent, many experts believed it was time for an increase. The case presents a background on the U.S. federal gasoline tax, an overview of the market for gasoline in the United States, and survey of gasoline taxes in U.S. states as well as several other countries around the world.

The case can be used to discuss the incidence of the gasoline tax, as well as its role as a Pigouvian tax to deal with negative externalities related to gasoline consumption and driving. There is sufficient data in the case to enable students to analyze the incidence of the federal gasoline tax and to determine the socially efficient level of the tax in light of externalities related to gasoline consumption and driving.

In May 2009 the Office of the Chief Actuary for the U.S. Social Security Administration projected that by 2016 the Social Security Trust Fund would begin to spend more money than it took in through tax revenue. Further, by 2037 the balance in the Trust Fund would be down to zero, necessitating cuts in benefits to retirees. The U.S. Social Security system thus faced a long-term financial problem that needed to be addressed sooner rather than later. The experience of other countries in reforming their own systems of old-age insurance might provide some guidance for U.S. policymakers as they attempt to deal with the long-run fiscal challenges facing the U.S. Social Security system. This case focuses on reforms of old-age insurance systems in three countries: Australia, Mexico, and Sweden.

This case gives students the opportunity to debate the variety of approaches that could be used to reform the U.S. Social Security system. It also gives insight into how countries around the world have structured their old-age insurance systems.