Senators Propose Federal Gas Tax Hike
On Wednesday, a bipartisan Senate proposal was introduced to rescue the beleaguered highway trust fund by raising the highway tax on gasoline by 12 cents a gallon. Sens. Bob Corker (R-TN) and Chris Murphy (D-CT) said that the way to fix the depleted Highway Trust Fund is staring Congress right in the face: a tax hike. The asphalt and concrete interests, NATSO, ATA, AAA and the U.S. Chamber of Commerce quickly endorsed the proposal. Politically, it’ll be an extraordinary tough sell: some question whether the federal government should pay for transportation projects at all; the Obama Administration, which cites the fragile recovery in the nation’s economy, has been reluctant to endorse a gas tax increase; and Members of Congress facing midterm elections have preferred to look elsewhere. The Murphy-Corker plan would hike gasoline and diesel taxes by six cents in each of the next two years, for a total increase of 12 cents. That would raise roughly $164 billion over the next decade, filling the highway fund’s revenue shortfall. The plan also would tie the gas tax to inflation, using the Consumer Price Index, to keep the fund in the black. The taxes now stand at 18.4 cents a gallon for gasoline and 24.4 cents per gallon for diesel. Congress hasn’t raised the gas tax since 1993. Over the past two decades, inflation has eroded the buying power of the 18.4 cents federal fuel tax to just 11 cents.