Thursday, December 6, 2012

D.C. whispers about a possible gasoline tax increase seem unlikely to turn into an actual increase

Even though the nation's transportation infrastructure is in sore need of more funding just to make repairs, much less upgrades, raising the gasoline tax has been anathema to leaders and most members of both parties. But with the fake fiscal cliff the 24/7 topic of the month, talk of raising the gas tax is getting a little attention. Senior transportation officials aren't pushing for an increase, but they are also not taking it off the table in "negotiations" between Democrats and Republicans. Some stakeholders and other interested parties believe that now may be the time to make a gas-tax hike happen. Others respond pretty much with "in a pig's eye!"

The federal gas tax hasn't been raised since 1993, which means that inflation has eaten 60 percent of its value in the intervening two decades. It now brings in about $32 billion annually. But Washington delivers around $50 billion to states and cities to build and maintain roads and other transportation infrastructure. Many critics say that $50 billion isn't nearly enough. And, indeed, much of our transportation infrastructure is crumbling. Thousands of decaying highway bridges are categorized as substandard. Nonetheless, most congressional conservatives would like to see less money spent, and they sought to make that a reality in the transportation bill that finally passed earlier this year.

The difference between what the gas tax brings in and what gets spent is significant. Last year, the U.S. Public Interest Research Group concluded that more than $600 billion had come from the federal general fund to build and maintain highways.

Over the years, there has been talk about indexing the tax to inflation. Talk that has gone nowhere. Some people have also sought to raise the tax for environmental reasons, something they believe would spur the development of more efficient vehicles or reduce the amount of driving people do and bring the gas tax more in line with other countries, like those in Europe. I've been making the argument since 1981 that adding five cents a year to the gasoline tax would over the long run generate ever-increasing sums for infrastructure upgrades and, if directed effectively, would cover some of the social costs that burning large amounts of fossil fuels exacts on society.

One conundrum, more efficient cars means a reduction in revenue from the gas tax even though the number of miles driven'and the wear and tear on roads'does not diminish.

Foes of raising the tax, those that aren't simply against any tax increase for any reason, argue that the regressive nature of the levy on gasoline'with the poor paying the same amount as the rich'should make any hike off limits. How a higher gas tax would affect people already struggling to make ends meet must definitely be a key consideration. But there are ways to cushion low-income Americans from the impacts of higher gasoline prices. Directing some of the new revenue to the less affluent via a tax rebate or a program like food stamps would ease the burden on those who could least afford it. Of course, the Right would have a conniption over any gas-stamp program.

Among congresspersons not willing to write off an increase entirely are House Transportation and Infrastructure Committee Chairman Bill Shuster, Republican of Pennsylvania, and the committee's ranking member Nick Rahall, a Democrat from West Virginia. In interviews with Adam Snider and Burgess Everett, neither called for raising the tax, but neither said it shouldn't be raised. Rahall praised Shuster for being open-minded about it.

The former chairman, however, Republican John Mica, said it would be a 'a very cold day in Washington, D.C., and hell" before a gas tax increase would happen.

Opposition to an increase is clearly bipartisan. Back in 2009, when Democrats controlled the House, Jim Oberstar of Minnesota was the chairman of the committee. He had hoped a six-year, $450 billion transportation bill, would be passed. But he kept talking about a gas-tax increase. It was made clear to him by Transportation Secretary Ray LaHood that the White House would not support a gas tax increase and presidential support for the bill was withdrawn. Oberstar lost his reelection bid in the GOP sweep in 2010, but he still thinks President Obama made a mistake.

Pete DeFazio, the Oregon Democrat, who chaired the Highways and Transit subcommittee under Oberstar, thinks the former chairman made the mistake:

'I don't think that would happen,' DeFazio told POLITICO about a gas tax bump. 'Remember, Oberstar's no longer chairman, and that's because we didn't pass a bill. And we didn't pass a bill because it was pulled by the Obama administration. It was pulled by the Obama administration mostly because they were frightened to death of Oberstar continuing talking about a gas tax increase, which I kept telling him not to do.

'And it violates Obama's pledge not to raise taxes on people' who make under $250,000 a year, he said. 'I don't think a gas tax is in the cards. If there's people above me working on it, then more power to them.'

"Unlikely" thus seems the most generous description for the chances a gas-tax hike will be imposed.

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