Trump Could Make Everyone Happy by Raising this Tax

Business News/Analysis, Opinions, Policy

May 31, 2017

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by Hugh Hewitt (The Washington Post) … One obvious answer is to raise the existing federal levy that makes the most sense to the most voters: the federal gas tax. Currently less than 19 cents a gallon (higher on diesel) and stuck there since 1993, the federal gas tax generates approximately $35 billion in revenue a year. This month, Trump told Bloomberg News that he is open to a tax reform package that hikes the federal gas tax. Good. In contrast to a “border adjustment tax” that few support and fewer understand, a hike in the federal gas tax could be easily explained to voters as the price of three distinct goals: infrastructure investments, the building of the Trump-promised 350-ship Navy and tax reform that ignites broad and sustained economic growth.

If a half-a-buck-a-gallon hike brought in $100 billion in revenue annually, it could be coupled with a cut in the corporate rate; repeal of the military-crippling sequester and a real increase in defense spending (especially on the Navy fleet); a dip in marginal income-tax rates; and, crucially, a boost in local infrastructure spending. READ MORE and MORE / MORE (Advanced Biofuels USA)

Advanced BioFuels USA