Raising the Federal Gas Tax
As strange as it seems, Congress may be on the verge of a major bipartisan compromise, and one to raise taxes, no less. Given that by all accounts the 113th Congress of 2014 was the least productive session in modern history, combined with the election year fervor and grandstanding that surrounded it, it would seem that they can only do better. And what better way to start off the new session than with a senior Republican senator proposing an increase to the Federal Gas Tax, a previously unthinkable notion.
For those of you who are unfamiliar, the Federal Gas Tax currently stands at 18 cents a gallon and is used to fund public infrastructure through the Highway Trust Fund. Now most states add on to this, making the actual tax rate much higher depending on where you are in the country, but at the federal level this tax hasn’t been increased since the early 1990s, and it isn’t even pegged for inflation. The result is that most of our roads and bridges are badly in need of upgrades and repairs, while the fund is currently facing a shortfall of close to a 160 billion dollars. To put this problem in perspective, the American Society of Civil Engineers recently stated that the average grade for roads and bridges within the United States is a D+, meaning that some pieces of infrastructure are performing so poorly and have such a high rate of failure that they literally pose a risk to public health. The only thing lower might be Congress’s approval rating. **ba dum tiss**
So why all the sudden urge to get along and pass new taxes? Three words: low gas prices. As of this morning, oil was trading below $50 a barrel, or roughly half of what it was during the summer, meaning that American consumers are facing a windfall of cheaper gas. And while this flurry of economic stimulus is good for the American consumer, it’s not without its drawbacks, as those suffering most are American producers who now have to consolidate in order to remain competitive. Raising the gas tax at this time would go largely unnoticed by a majority of the voting public, and would help to stabilize a volatile domestic market. The additional funds would also be used to invest in the future, by putting more Americans to work through building the much needed infrastructure of tomorrow.
It’s not a done deal yet, however, as some members of Congress are unlikely to vote for anything that can be considered raising taxes, and the exact rate and details of any proposal remain to be decided. Two senators on the Finance Committee, Bob Corker (R-Tennessee) and Chris Murphy (D-Connecticut), have casually proposed a 12 cent per gallon increase, to be instituted over the next two years, and have begun drafting legislation. Others, such as conservative columnist Charles Krauthammer, advocate for increasing the gas tax while lowering other taxes to offset the costs, though it remains to be seen how well the numbers might pencil out.
What do you think? Should Congress raise the gas tax, and by how much? Let us know your thoughts on the Corker/Murphy proposal by voting on the initiative below and by adding your comments.