Submitted by Joseph Jankowski of PlanetFreeWill
President Donald Trump’s chief economic adviser, Gary Cohn, has floated the idea of raising the current federal gasoline tax next year to fund the administrations $1 trillion dollar infrastructure plan aimed at improving U.S. roads, bridges, and other public work. The idea was proposed during a meeting with a bipartisan group of lawmakers dubbed the Problem Solvers Caucus on Wednesday, reports Bloomberg.
While proposals to raise the gasoline tax have surfaced over the years, the tax has not been raised since 1993. Revenue from the federal per-gallon taxes of 18.4 cents on gasoline and 24.4 cents on diesel has declined due to inflationary mugging of purchasing power and a market-driven desire for better fuel mileage of passenger vehicles, which has increased 12 percent, Bloomberg points out.
President Trump had also floated the idea of raising the federal gas tax earlier this year but it received a rather cold reaction from House Ways and Means Chairman Kevin Brady who said that he would rule out raising the tax.
When confronted with the idea on Wednesday, Brady said his focus was elsewhere. “Hm. I’m going to stay focused on tax reform right now,” he said.
The tax hike has sparked the interest of Mike Simpson, a Republican from Idaho, who said that he would support the effort to tweak up the price of gasoline.
“It’s a user fee,” Simpson said. “We’ve got to convince people that the money goes to roads and bridges and not all the other bull.”
In August, President Trump rolled out an executive order aimed at speeding up approvals for infrastructure projects that decreased the environmental permitting process for “complex” highway projects and ensured that a single agency would serve as the point of contact for each project’s paperwork. The order also axed Obama-era flood standard that would have required federally funded projects to be built to withstand the stronger storms that the former administration said would come with a warming planet.
“My administration is working every day to deliver the world-class infrastructure that our people deserve and, frankly, that our country deserves,” the president said in August.
The Trump administration has said that it’s pursuit of an infrastructure overhaul would come after ongoing efforts to overhaul the U.S. tax code are resolved.
The House is set to cast a critical budget vote on Thursday that will set the parameters of any tax bill and pave the way for Republicans to pass it without Democratic support.
One of the largest hurdles the tax effort currently faces is the proposal to eliminate state-and-local-tax deductions, also known as “SALT,” that some Republicans say is important to middle-class households living in high-taxed states.
Senator Rand Paul from Kentucky has spoken out against the current path of tax cuts, accusing the current plan of running the risk of raising middle-class taxes if the SALT deductions are eliminated.
“The only sticking point I’ve had is a detail, but it’s an important detail: if you keep the middle rate at 25% and you get rid of two big deductions, how do we prevent the middle class from having a tax increase on this?,” Paul asked on Fox News last week.
Another daunting aspect to the current tax cut effort is that it is set to tack on $1.5 trillion to the already out of control debt problem Washington has cooked up.
While this has raised concern with some Republicans who express the slightest bit of actual conservative values, such as Senator Rand Paul, it seems the passage of the tax bill for political granstandiong will go ahead despite the increase in debt.
“We’ve got to get something major done,” said Rep. Mark Meadows told the WaPo. “Had we repealed and replaced Obamacare, there may not have been as much flexibility or pressure,” he added about passing the tax cuts.
“Am I feeling the pressure to get this done? Yes. Have I been willing to negotiate a little bit more generously because of that pressure? Yeah. That’s just shooting straight with you,” Meadows said.
In typical Washington fashion, more debt will be placed on top of the taxpayers head for sake of saying that the party ‘got something done’. And as the cuts in taxes are a major focus, the idea of raising taxes on a commodity (gasoline) everyone needs is being floated. To summarize, it is looking like any tax plan to pass will be a political front which will create more debt and let big-government continue to run wild.