Senators propose 12-cent gas tax increase

Plan also calls for offsetting the tax increases with other tax cuts, such as by permanently extending six of 50 federal tax breaks that expired this year
Associated Press
Jun 18, 2014

 

Two senators unveiled a bipartisan plan Wednesday to raise federal gasoline and diesel taxes for the first time in more than two decades, pitching the proposal as a solution to Congress' struggle to pay for highway and transit programs.

The plan offered by Sens. Chris Murphy, D-Conn., and Bob Corker, R-Tenn., would raise the 18.4 cents-a-gallon federal gas tax and 24.4 cents-a-gallon diesel tax each by 12 cents over the next two years, and then index the taxes to keep pace with inflation. The increase would be applied in two increments of 6 cents each.

The plan also calls for offsetting the tax increases with other tax cuts. Senators said that could be done by permanently extending six of 50 federal tax breaks that expired this year, but they indicated they would be open to other suggestions for offsets.

The plan was immediately embraced by industry and transportation advocacy groups seeking a long-term means to keep the federal Highway Trust Fund solvent. However, it would require a lot of heavy lifting from Congress in the politically charged atmosphere of an election year to pass such a plan before late August, when the trust fund is forecast to go broke.

Senate Finance Committee Chairman Ron Wyden, D-Ore., has indicated he's looking for means to shore up the fund for about the next six months while working on a long-term plan. That would move debate on a gas tax increase or some other revenue-raising scheme until after the midterm elections in November.

Revenue from gas taxes and other transportation user fees that for decades hasn't kept pace with promised federal transportation aid promised to states. People are driving less per capita and cars are more fuel efficient, keeping revenues fairly flat. At the same time, the cost of construction has increased, and the nation's infrastructure is aging, creating greater demand for new and rebuilt roads and bridges.

The last time federal gas and diesel taxes were increased was in 1993 as part of plan to reduce the federal budget deficit. Republicans castigated Democrats for the tax increase, and it was a factor in the GOP takeover of the House and Senate the following year.

Since then, lawmakers have been reluctant to raise fuel taxes despite calls from several blue-ribbon commissions to do so.

"For too long, Congress has shied away from taking serious action to update our country's aging infrastructure," Murphy said in a statement. "We're currently facing a transportation crisis that will only get worse if we don't take bold action to fund the Highway Trust Fund."

Sen. Tom Carper, D-Delaware, who attempted to increase the gas tax increase in 2010, said he was glad to see the idea "gaining more bipartisan support."

Since 2008, Congress has repeatedly dipped into the general treasury for money to keep the trust fund solvent, sometimes waiting until the government was the verge of slowing down payments to states. States have complained that the uncertainty over whether federal aid will be forthcoming has limited their ability to commit to larger projects that take years to plan and construct.

"Congress should be embarrassed that it has played chicken with the Highway Trust Fund and allowed it to become one of the largest budgeting failures in the federal government," Corker said.

The six expired tax breaks identified by the senators as possible offsets for fuel tax increases are a research and development tax credit, certain expensing by small businesses, the state and local sales tax deduction, increasing employer-provided transit benefits to the same level as parking benefits, a deduction for spending by teachers on classroom supplies, and an increased deduction for land conservation and easement donations.

The anti-tax Club for Growth, which is influential with GOP conservatives, issued a statement opposing the plan. Congress should "devolve highway funding to the states and let them fund their own infrastructure needs," said Chris Chocola, the group's president.

Comments

ladydye_5

Sounds like a brilliant plan....the price of gas isn't high enough. Now with the turmoil in the Iraq, AGAIN. It will go higher yet. When will it stop??? The "tax breaks" they are talking about possible offsets, will do nothing for most of us. Where is all the domestic oil? Thought the US was producing more oil than ever? Why must we still be a slave to every hiccup in the market?

gene44870

Anyone that would do things to bloster the gas price higher then it is or should be must not pay forcuel on a poor or middle class pay check .
Fks all ready have to decide if the buy food to feed thdir kids and family or put gas in the car to pay rent house payment etc.
If the goverment wants to do anythinv tbing . Brake into the ztock piles of oil and refine that oil and put ig into the market to force the price down to help ..Dont do things that is only going to hurt the middle class. After all we middle class is what makez this country what it is

Wjones44

Throw all these bums out! Do not re-elect any incumbents!

JD's picture
JD

+1

downthemiddle

50 year ago this country could afford the space program AND welfare (LBJ's Great Society) ... not to mention Vietnam.

Now.... just the welfare.... third generation laybacks who are LBJ's great grandchildren...

Pony up democrats... the chickens are home to roost.

NOTHING is "free".

downthemiddle

The space program produced American Exceptionalism...

LBJ's Great Society produced (fill in the blank).

mikeylikesit

the guy in the picture looks like he's enjoying his screwing more than the rest of us will..

KURTje

Meanwhile working Americans want to see term limits & pay cuts for all "elected" officials.

The Hero Zone's picture
The Hero Zone

A tax chained to inflation directly? Is there anything else like that? It seems fishy. Also why the "offsets" then and will those offsets be chained to inflation as well? I bet the chain on the front is affixed, but are there any protections on the offsets or will those go away when it's convenient a few years from now? This all is really odd.

fenderstrat52

Here we go! I'm from the government and I'm here to help you. Bend over!

YoMamma

Stupid progressives!

Truth2u

What have they done to bring back real industrial jobs? This would increase travel which would increase tax revenue.

They always think of the easy way that takes no work or thinking on their part.

Contango

Over the past few decades, vehicles have become more fuel efficient, hence less tax money.

Approx. 10,000 Boomers are reaching age 65 every day. Many are retiring and driving less. So a slight increase in the fed gas tax won't bother them much.

So the Political Ruling Class says: Let's stick it to the little guy or gal who still has to drive to work every day.

Meanwhile, the price of food continues to increase:

"Consumer prices rise sharply in May"

http://www.usatoday.com/story/mo...

Unassumer

better go dig that bike out of the shed.

SamAdams

If the government did only what it was actually SUPPOSED to do, we'd have more money than even Congress would know what to do with! Instead, we're giving free education and healthcare to illegals, we're handing housing and food to Americans who WON'T work (as opposed to can't), we're imprisoning thousands convicted under unnecessarily punitive laws (I'm talking mostly about marijuana "crimes" here), and so on.

If the federal government would simply secure our borders, defend our country, and deal with interstate infrastructure, we'd ALL be better off, and that includes even those people who WON'T be impacted by the tax increase du jour!

ladydye_5

Also saw on the news last night, my 17 year old daughter even questioned it, the road usage tax. They were talking about putting a "meter" in your car to track the mileage you drive in your car and taxing that! They were then also questioning the use of that info from the "meter" in your car, speeding tickets. toll roads, etc. Things are getting out of control.

downthemiddle

democrats / liberals LOVE big government... this is how it gets paid for.

Big government means more government employees.. they need something to do... so they create agencies to mess with us.

colverdi

How 'bout taking a page from the SMCC playbook and CUT Congressional salaries instead? We can start with these two "senators."

holysee

Germany produced a record 50 percent of its electricity needs through solar panel at the start of June, breaking a huge milestone on its march to renewable energy.

Contango

Re: "Germany produced a record 50 percent of its electricity needs through solar panel,"

Sources say otherwise:

https://www.destatis.de/EN/Facts...

Donegan

You know libtards aren't any good with numbers. You are just going to confuse them.

samiam

And now your 3 Democrat county commissioners passed as emergency legislation another $5 (or more) tax/fee on your license plates. Remember this at election time.

Dr. Information

2008 "5 dollar for a gallon of gas wouldn't be a bad thing as long as it was a gradual increase"......Obama.

Looks like he is getting his way. Closer and closer each and every single day.

44846GWP

Let me think, a new gas tax..........NO.

samiam

It's going to go into a fund strictly for highway and infrastructure. Yeah right...where have I heard that before! Social security maybe? It's time the congressmen and their staffs start buying their own gas and their own cars. Or let them be driven around in a Ford Fusion instead of a BMW or Mercedes.

grumpy

If you have Congressmen and Senators drive you are putting the general public at risk. Remember what Teddy Kennedy did last time he was allowed to drive?

Nemesis

This is actually a GOOD move. Now, Sam and Contango, before your heads explode, let's examine this from a methematical and truly libertarian perspective.

What do we know?
-As Contango pointed out, cars are getting better gas mileage, so people are buying less gas per mile driven.
-That means less gas tax revenue per mile driven.
-The gas tax goes to repair roads.

The problem is, while the fuel burned per mile has gone down, the wear and tear on the road per mile driven has not. In fact, it's probably increased - one of the mileage improving changes has been reducing rolling resistance through stiffer tires with harder tread compounds, suspension tuning has become firmer, braking and acceleration have improved, and safety enhancements have offset a lot of the weight reduction allowed by improvements in materials. All these changes tend to increase the wear a car places on the road surface.

So drivers are covering less of the cost of fixing the damage they're doing. Officials have looked at different approaches to resolving this problem. The alternative is taxing miles driven, which, as has been mentioned, involves the government spying on your comings and goings more than they already do. That's not an acceptable solution to anyone but statists like Big Dog, Coasterfan, and AJ. Raising the gas tax to reflect the actual road damage makes sense. It's also more fair - given the inverse correlation between vehicle weight and gas mileage, basing the tax on fuel consumption reflects the difference in road wear per mile of different vehicles.

The gas tax is among the most libertarian, free market, and constitutional taxes we have in this country. It's a direct use tax, exactly the way the Founders wanted government funded. It makes users of a government service bear the cost of that service. The roads have to be repaired one way or the other - why should pedestrians be taxed to subsidize drivers? For anyone with a car less than 15 years old that isn't a behemoth status symbol SUV, this increase will probably still represent a net decrease in the taxes paid per mile driven versus 20 years ago.

joemama1

that's fine as long as the money only gets used for road repair

The Hero Zone's picture
The Hero Zone

I appreciate the perspective and thought, it's always good to have stimulation like this. I agree with the sentiment but what still rubs me as odd is that it is guaranteed to rise as it is chained to inflation and is supposedly offset by taxes on the back end. That alone seems unlikely to last let alone a continual decrease of back taxes as the front tax increases.

I want to be optimistic about this, I really do, but it just seems so ripe to be a bait-and-switch let alone setting a precedent for other taxes set to rise with inflation so they don't have to be voted upon in sunset discussions. It's awkward.