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Trump suggests raising tax on gasoline

May 5, 2017
President Donald Trump on May 1 suggested raising the federal gasoline tax to help pay for his infrastructure plan. 
The federal fuel tax — 18.4 cents per gallon for gasoline and 24.4 cents for diesel — is 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.
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.
Trump floated the idea of raising the gas tax in an interview with Bloomberg News. His press secretary, Sean Spicer, realizing that the president might have touched the third rail of national Republican politics, quickly tried to scale back his comment, saying the president was not endorsing a gas tax increase but merely considering it because the trucking industry had asked him to look into it. 
A higher gas tax would be one way to help pay for 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 U.S. Chamber of Commerce and AAA support an increase.
Adjusted for inflation, the value of the federal tax on gasoline has eroded by almost 40 percent since Congress last increased the tax in1993.
Many states, tired of waiting for Washington, have raised fuel taxes. Just last month, lawmakers in California, Indiana, Montana and Tennessee voted for increases. Altogether, 21 states have done so since 2013, according to the American Road & Transportation Builders Association. 
But states cannot do the job alone. Many large infrastructure projects cross state lines and involve multiple modes of transportation, like road, freight rail and mass transit, putting them beyond the capacity of individual states. 
Of course, there are substantial political obstacles to increasing the tax. Many conservatives, including House Speaker Paul Ryan, R-Wis., and the anti-tax ideologue Grover Norquist, oppose the idea.
Then-President Ronald Reagan persuaded Congress to pass the last gas tax legislation, a 5-cent-a-gallon increase. "The cost to the average motorist will be small," Reagan said, "but the benefit to our transportation system will be immense."