Dive Brief:
- The U.S. Chamber of Commerce has joined the national infrastructure funding conversation by calling for an increase of 25 cents per gallon to the federal gas tax, according to The Washington Post.
- Chamber officials said raising taxes on both gasoline and diesel by 25 cents could raise $375 billion for infrastructure work during the next 10 years. The organization's proposal also includes a push for private investment in public infrastructure projects, a streamlined permitting process and increased capacity of federal loan programs.
- The Chamber's proposal exceeds most recently suggested increases to the gas tax, though The Post reported that President Donald Trump has toyed with the idea of a 50-cent increase in private meetings. That suggestion reportedly was not received well by Republicans, indicating a tough road the Chamber has in front of it in getting lawmakers to back the proposed 25-cent hike.
Dive Insight:
The federal gas tax is the primary funding source for the Highway Trust Fund (HTF), which provides money to the states for various transportation projects. The Congressional Budget Office has reported that if the government doesn't find a new revenue stream for the HTF or raise the gas tax, the account will run dry in the next 10 years.
Even so, lawmakers have hesitated to push for an increase despite two fairly recent polls, one from Bloomberg and the other from HNTB, suggesting that Americans are OK with paying more at the pump as long as the money is earmarked for infrastructure improvements in their areas. In fact, California, Indiana and Oregon increased their states' gas taxes in order to pay for sweeping infrastructure initiatives while minimizing backlash. Connecticut, on the other hand, lowered its gas tax in 1997, a move which cost the state $4 billion.
The only publicly discussed gas-tax increase from the Trump administration is one that would see an additional seven cents a gallon, a proposal which received immediate pushback from Senate Minority Leader Chuck Schumer (D-NY), who said he would not go along with any attempt to increase taxes for working-class Americans.
Earlier this month, Rep. John Delaney (D-MD) suggested raising the corporate tax rate to 23% in order to come up with the $200 billion public investment called for in the president's $1 trillion infrastructure initiative. The tax reform bill passed at the end of last year lowered the rate to 21%. Delaney has said he believes businesses would accept such an increase since the reduction to a 21% rate was more than they had asked for.
