U.S. Chamber of Commerce to Push Trump, Congress to Raise the Gas Tax to Fund Infrastructure

by John Wagner (Washington Post) With President Trump and Congress turning their attention to infrastructure in the coming weeks, the U.S. Chamber of Commerce is preparing for an uphill battle: a push to raise the federal gas tax by 25 cents per gallon to help pay for the initiative.

The proposal, which will be formally introduced later this week, is part of a series of principles the nation’s largest business lobby will offer in a bid to help shape the debate about upgrading U.S. roads, bridges, airports and other critical infrastructure.

In private meetings, Trump has floated the idea of raising the federal gas tax by as much as 50 cents per gallon but received a chilly reception to that idea, particularly from Republican lawmakers.

As envisioned by the chamber, the 25-cent increase would be applied to the current taxes of 18.4 cents per gallon for gasoline and 24.4 cents per gallon for diesel fuel. It is estimated that the increased levy would raise more than $375 billion over the coming decade, chamber staff members said.

Part of the federal funding would be used to reward states and localities that raise taxes or other revenue to fund infrastructure in their jurisdictions. The White House also is looking at grants for new projects in rural areas and money for “transformational” work such as plans to build tunnels for high-speed trains. READ MORE

Excerpt from Politico's Morning Energy: House Transportation Chairman Bill Shuster brought up the possibility of raising the gas tax at an infrastructure-focused session of the Republican retreat Thursday. "It was fitting I think for me to talk about the elephant in the room at a GOP conference and that's dealing with the Highway Trust Fund," Shuster told reporters, after a session that included Sens. John Barrasso and John Thune . "That is a user fee, it's a fee you pay at the pump and it's something that's efficient, it's understandable and it's a fee, it's a tax you collect that goes 100 percent to its intended purpose - and that's the highway system, the transit system in this country," Shuster said later. READ MORE

Excerpts from Politico Morning Energy 2/15/18: President Donald Trump signaled he'd be in favor of a 25-cent gas tax hike in order to pay for infrastructure during a meeting with lawmakers Wednesday, according to a source in the room. Pro's Lauren Gardner, Tanya Snyder and Brianna Gurciullo report Trump said he would promote the move - a stark departure from previous administrations - but a gas tax hike still faces long odds on Capitol Hill. "Congressional Republicans haven't voted to raise gas taxes since Reagan was President, and they aren't likely to now," said Paul Bledsoe of the Progressive Policy Institute.

The Chamber of Commerce has previously floated a gas tax increase as a way to pay for infrastructure upgrades, but more ideologically minded conservative groups remain dug in against the idea. FreedomWorks President Adam Brandon said: "I'd hate to see a new tax siphon off 20 percent of the $1,000 tax reform bonuses back to the swamp this year."

Democrats sounded optimistic. "He acknowledged that there needs to be more federal investment than is proposed in his plan - or not his plan; his staff's plan," Democratic Rep. Peter DeFazio said after leaving the meeting. READ MORE

Excerpt from Politico's Morning Energy 2/16/18: Sen. Jim Inhofe dismissed reports that Trump said he'd promote a 25-cent gas tax increase in a White House meeting on infrastructure this week. Instead, Inhofe said those descriptions of Trump's comments were "wishful thinking," calling out Tom Carper. "I know the comments that were made after that meeting and I know who made them," Inhofe said Thursday morning at a Washington Examiner event. "And there was, I have to say, a lot of wishful thinking in his comments."

Trump "recognized that there's gonna have to be a source of funding," said Inhofe, who attended the meeting. "And when the president says, yes, everything's on the table, and that would include an increase in the gas tax, he didn't say it in those words, but everything is on the table, and then the interpretation that this person had was 'Ah, the president now wants to have a gas tax increase.'" Carper said in a statement Wednesday that Trump "came back to the idea of a 25 cent increase several times throughout the meeting." Pro's Brianna Gurciullo reports more here. READ MORE

Excerpt from Politico's Morning Energy (2/22/2018): The White House Council of Economic Advisers released a 568-page report Wednesday that details, in part, policy priorities for infrastructure investment, suggesting potential options for revenue. The annual economic report offers up a critical take on a potential gas tax increase, which Trump suggested last week. "In the case of roads and highways, for example, fuel taxes have historically acted as imperfect user fees, but conventional funding models are now under pressure from rising fuel efficiency and the use of electric vehicles, and congestion costs are high and rising in many urban areas," the report says. The CEA report instead points out Oregon and its piloted program for user fees based on vehicle miles traveled. Read the report here.

ICYMI: Americans split on the tax: A Quinnipiac University poll published this week found that Americans are almost evenly divided on a gas tax hike. The poll asked participants if they thought "that raising the federal gas tax to specifically pay for repairs to the U.S. infrastructure is a good idea or a bad idea." Forty-six percent answered affirmatively and 44 percent said "no" (10 percent didn't know). (h/t Morning Transportation) READ MORE

Excerpt from Politico's Morning Energy: Hamilton Place Strategies released a new report Monday on a proposal to cut the gas tax, while changing the way it is calculated to a percentage of the price of gas. "Our analysis shows that if Congress had voted in 1993 to decrease the then-14 cents federal gas tax to 11 cents but also indexed it as a percentage of price, the tax would still be generating more revenue for the Highway Trust Fund than the actual increase enacted at the time," the report says. READ MORE