Polls on raising the gas tax are particularly negative, even among Democrats, but, when asked, Trump said “It’s something that I would certainly considerâ€. It didn’t mean he was serious: he and people in his administration typically say that or something similar when they are not prepared to really answer a question. But, this has made both the NY Times and Washington Post editorial boards giddy
Donald Trump’s Very Good Idea: Raise the Gas Tax
Every once in a while, President Trump says something that really makes sense, as when he suggested on Monday raising the federal gasoline tax to help pay for his infrastructure plan. Hold on to that thought, Mr. President. It’s a great idea.
The federal fuel tax — 18.4 cents per gallon for gasoline and 24.4 cents for diesel – was supposed to pay to fix and expand the country’s roads and transit systems, but Congress has refused to increase it since 1993. Between inflation and the higher fuel economy of cars, the tax is hardly up to the job. Highway-related tax revenue was only $37.4 billion in the 2015 fiscal year.
Three guesses to determine the main reason why gas tax revenue is down. That’s right, the government, at both the federal and state levels, has been pushing, and even mandating, that vehicles be more efficient. There’s a whole lot less V6 and V8 vehicles on the road, replaced with V4s that get excellent fuel economy and have decent acceleration (unlike a 4 cylinder in 1993, which drove like a turtle on Valium). Plus, the ever increasing number of hybrids and electric vehicles. V6s and V8s usually now have cylinders that shut down at highway speeds to get better fuel economy. And, let’s not forget how hard the previous administration pushed to make this happen, and mandated it happen.
Better fuel economy equals less gas purchased equals lower tax revenue.
Small wonder then that many of the country’s roads and transit systems are somewhere between shoddy and falling apart. The American Society of Civil Engineers recently gave the country’s roads a grade of D and transit systems a D-. It said the poor state of the roads cost the country $160 billion in time and fuel in 2014. And the country’s transit systems have a $90 billion repair backlog, according to a government report published in January.
Perhaps if we weren’t pissing away taxpayer money on overpayments on contracts, projects such as shrimp on treadmills, and ‘climate change’ money to nations which then build airports. Among the many, many ways government wastes money. Waste is estimated anywhere between $125 billion to $1 trillion a year.
A higher gas tax is one way to help pay for Mr. Trump’s $1 trillion infrastructure plan without increasing the federal deficit. It would benefit Americans by shortening their commutes, creating jobs and reducing costs for car repairs. Businesses would be able to ship raw materials and goods faster. All of that would bolster economic growth, which is probably why, in addition to truckers, the United States Chamber of Commerce and AAA support an increase.
In reality, raising the gas tax would hurt the middle and lower classes, raise the cost of goods, and have a negative impact on the economy. Don’t like that link? How about the LA Times saying the same thing? Or liberal leaning Brookings Institute?
Oh, and it’s cute how the NYTEB is suddenly concerned about the deficit. Heck, we could recover $1.3 billion a year to use on transit by refusing to pay employees who are placed on leave for misconduct. $440 million each year wasted on unnecessary printing. Seriously, you can read about all the crazy ways government spends your money at both liberal and conservative sites, money not being used for core services like maintaining transportation.
Trump has a good tax idea. Here’s how to make it work.
HERE IS an upside to President Trump’s unÂorÂthoÂdox style of communication: Sometimes he comes out with a good idea that a less mercurial national figure might avoid out of conventional political caution. So it was with his remark during an interview with Bloomberg News, to the effect that he “would certainly consider†increasing the federal excise tax on motor fuels to help pay for an increase in federal infrastructure spending. (snip)
Of course no one likes to pay more for fuel; policy should be adjusted to help mitigate the impact of this inevitably regressive levy on those who can least afford it. Still, at $ 2.38 per gallon, Tuesday’s nationwide average price of regular gasoline was less than what Americans paid 70 years ago, adjusted for inflation. The tax increase needed to cover currently planned Highway Trust Fund spending would be small — roughly a dime per gallon, according to a 2015 Congressional Budget Office report . Ideally, Congress and the Trump administration could agree to a significantly larger amount, then index it to inflation permanently to assure the trust fund’s long-term stability.
That would be just $1.70 more for a fillup for me. Every 2 weeks or so. But, the trucks which deliver goods would be paying that too. Charging the businesses more to deliver. Then the businesses raise their costs. And it all gets spread around. And we pay more all around.
We have to remember that states themselves have their own gas tax on top of the federal tax. North Carolina’s is one of the nations highest. We have relatively decent roads. Our economy is booming. But, that money is being spent here. Not spread around the country on wasteful projects (see: Obama’s “shovel ready jobs”). Los Federales should, really, lower the federal gas tax, or at least keep it the same, and let the states deal with maintaining their roads and bridges. People closer to the source who know better and can be held more accountable.
Crossed at Right Wing News.
Eliminate the gas tax completely and add an ‘infrastructure’ tax to the cost of registering a vehicle. That way everyone who uses the roads pay their fair share of the upkeep.
TEACH:
Seriously? You’re concerned, for budget reasons, that we’re not buying and burning enough gasoline??? Do you remember what OPEC did to our economy in the 70s? Do you remember smog alerts? Have you heard of global warming?
It’s like saying that Social Security costs are increasing because tobacco use has dropped! 65 year olds dying of lung cancer saves us billions!
The trucking industry supports the tax because although it increases their upfront costs, improvements in roads, bridges and traffic will benefit them more than the costs.
How would your state by state plan handle President Eisenhower’s Interstate Highway system? Long haul truckers do not just operate within one state.
Wow, you just attempt to manufacture things I didn’t write. Perhaps you should read the post again.
And if trump is serious about infrastructure (and he should be) and proposes spending $1 trillion (about 25% of federal spending in a year) how should it be funded? Cuts in Medicare, Medicaid, Social Security, Defense? Another tax besides gasoline? Remember he’s proposing billions in tax cuts for the wealthy too, plus increased spending on the border and the military. Where will the money come from? Or is it so important an issue that we borrow to support it?
A $trillion Manhattan-style infrastructure project WOULD boost the economy directly by employing millions and contribute to overall wage increases in the working classes (simple economics). In addition, we NEED infrastructure improvements to increase our economic productivity – imagine better roads, bridges, rail systems, airports – more reliable and “hardened” electrical grid, wider internet access – better sewers and gas. They pay for themselves eventually.
It will obviously require shitcanning the Freedom Caucus and garnering Dem votes.
It’s a very progressive set of proposals. The fear is that trump will engineer a crony system to reward the elites at the expense of the taxpayers – that it will be another tax giveaway with little value accruing to the working classes.
Lets clean this up Jeff. First, you don’t really care about debt, you allowed Obama to spend one trillion per year on nothing, for nothing. I do suspect that he was channeling it into the market to give the appearance of an improving economy, which we now know was crap. That is likely the reason he is giving $400,000 speeches, to get his kick-back. Now, infrastructure does give temp jobs, but not permanent ones and Trump is spending on infrastructure, but this is only to bring us up to a first world status once again. Any trip out of the US will show we are way, way behind the curve. So, your Keynesian model will be partly served as he moves to a better model (by the way, do you know that even Keynes was convinced that his model was crap but could not get FDR to change?). Now, what you will see, if the Dems allow it, will be tax cuts for those that pay taxes (yes, that is what you call the rich). That money will in turn go into business and markets and we will have a real improvement in the economy which will generate phenomenal tax returns, this happens every time it is allowed. And, yes, Reagan did wonderful with it despite what you are going to say in your ignorance. And, why would Trump have a “crony system”, you are too into Obama and Hillary who were soaking us for 8 years. Trump is a legitimate guy and not the scum we have had up there.
Actually, I have little problem with the fuel tax: it is directed toward highway construction and maintenance, so the fuel tax is pretty much a fee-for-service.
That said, federal law requires that at least 92% of the federal excise taxes be spent in the stets in which they were collected. The real answer is to reduce the federal excise taxes by 92%, leaving the states the room to raise their fuel taxes by that much, and let the states decide where they wish to spend their highway tax dollars. Why does a congressman from Montana need to approve a local road in Carolina?
With federal dollars comes federal reporting requirements, and that means more bureaucracy. States using federal highway tax dollars have to employ additional bureaucrats to fill out all of the compliance forms, and the federal government needs to employ more bureaucrats to review and approve — or reject — those reports. None of that paves a single mile of roadway!
dp,
I agree with you. The only thing is that my state now has Dem leadership and if they get extra money, they will steal it. Before we had Jindal, and he was even worse than the Dems.
The problem isn’t the gas tax alone. It is that the highway fund is not a highway and infrastructure fund. It’s a highway fund. Gas taxes routinely get stolen to pay for pet rail projects in major cities when multiple studies consistently show that adding more traffic lanes is a better use of that money.
It wouldn’t be bad if we knew that government wouldn’t waste a lot of money on stupid pet projects. If the money was used wisely, we’d all be like “sure, I’ll pay a bit more. Good roads, reduced traffic flow, lights on roads, etc.” But, we know so much will be pissed away.
Something to note on the “when adjusted for inflation, gas was cheaper…”
That statement doesn’t take into consideration the price for extraction and getting it to the pump was more expensive back then (also adjusted for inflation).
Gas is easier to extract and getting it to the pump is cheaper today.
Supply/demand, yada.
So screw the gas tax. END THE GAS TAX.
Read my lips.