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Gas tax hike on the horizon?

By Kay Bell · Bankrate.com
Thursday, February 14, 2013
Posted: 2 pm ET

I've gotten whiplash over the last few weeks doing double takes at the price boards at local gas stations. A month ago, I could get a gallon of regular for $3.09 here in Austin, Texas. Now it's $3.55 at my local pit stop place.

And if I happen across a place where gas is cheaper, I hit the brakes and turn into the station to top off my tank. That's probably a good idea for a couple of reasons.

First, the U.S. Department of Energy projected a month ago that a gallon of regular would average $3.44 per gallon. Now, the Department's latest Short-Term Energy Outlook expects a gallon of gas to be 11 cents higher.

Fuel tax stuck in the '90s

The second reason to pay attention to gas prices is that we might finally get a hike in federal fuel taxes. The federal excise tax on gasoline is 18.4 cents per gallon. It's been stuck at that level since 1993. Meanwhile, the cost to build and repair U.S. highways, for which the gas tax money is dedicated, has gone up over the last 20 years.

So there's been some rumbling on Capitol Hill about increasing the federal fuel tax rates (diesel is taxed by Uncle Sam at 24.4 cents per gallon).

The possibility of a higher federal gasoline tax comes up periodically.

In 2010, President Barack Obama's special bipartisan deficit reduction panel, the National Commission on Fiscal Responsibility and Reform, recommended a 15 cent-a-gallon gas tax hike in its draft report. The commission's full tax reform proposal never made it past the preliminary stage.

A gas tax increase was most recently was addressed, albeit in behind the scenes talks, during "fiscal cliff" discussion late last year. At that time, the transportation sector brought up the idea of raising fuel taxes.

Folks who make their livings on the road want the country's infrastructure to be better. And they acknowledge that we have to pay a price to do that. This week, another major business group also expressed support for increased transportation taxes.

Chamber of Commerce surprises panel

On Feb. 13, U.S. Chamber of Commerce President Thomas Donohue told the House Committee on Transportation and Infrastructure that his group supports reasonable increases in gas taxes that are phased in and indexed to inflation.

Donohue's remarks were an elaboration on his written testimony, in which he said:

First, we're willing to pay to support public infrastructure. This includes paying more in user fees to shore up the Highway Trust Fund and ensure adequate investment. This is not a new position. The Chamber has been saying this to Congress every chance we can for years. We all know the dire condition of our highway and transit systems. It's going to take money to fix it -- it's that plain and simple. The money is running out, so we need to phase in a moderate increase in the gas tax over a number of years and index it to inflation. Shippers and truckers are all on board to pay a little more as long as the money goes to where it's needed.

Wow. The country's preeminent lobbying business group, one that traditionally supports Republican anti-tax lawmakers, is calling for a tax increase.

Could we soon see cats and dogs and Republicans and Democrats living together in harmony? I wouldn't go that far. But we all know that Donohue is right.

The next big question is: Are we all -- representatives, senators and American drivers of all political persuasions -- ready to accept that we have to pay at least a little more to get the roads and bridges and tunnels we want and need?

Maybe.

Infrastructure programs are an easy way to put people to work. Such projects got a boost from 2009 stimulus money. Since then, though, they lagged.

Obama cited our "aging infrastructure badly in need of repair" in his State of the Union address this week. To deal with it, he called for a "Fix It First" program that would focus on urgent repairs to roads, bridges and railways. The Congressional Budget Office has put a $50 billion price tag on this proposal.

With a Congress that goes through contortions on how to pay for federal projects, increased federal fuel taxes could be an easy way to help foot some of these necessary infrastructure bills.

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8 Comments
saleanna
February 21, 2013 at 5:31 am

What happened to the first gas tax to fix the roads? And what about the lottery to pay for the Schools? Maybe there should be some cuts in the politicians paychecks. Since General Motors is not what it once was this has cut down the tax money for Michigan tremendously.. So why not cut the politicians expenses and expenditures? If you get a job that brings in less revenue then you dont expect someone to pay for the same lifestyle that you once had.. And what about doing the job that your paid to do.. Create new jobs. Thats the answer.. not taxing more..

Dave
February 16, 2013 at 11:54 am

Let's all put partisan politics aside and concentrate on who is to blame for the mess we're in. The economic debacle we're facing is the result of gross irresponsibility on the part of both parties, past and present. In other words, the whole of Congress is a joke which is ruining this country. They act as though tax revenue is their own personal spending money, and the only thing they've really been successful at is wasting what has been brought in. If they now want to increase the federal gas tax, ostensibly for road repair and maintenance, we'd better demand that any monies procured through said tax is mandated by law, or amendment, to go for what it is intended for, or else we will just see a continuation of pork barrel politics ad infinitum. I just know when we, the people, are going to wake the heck up and make these clowns accountable for their actions. At the rate they're going, there won't be much of a country left for our grandchildren. Do we even care about that, and are we willing to do something about it? Just asking.

Shell
February 15, 2013 at 7:22 pm

The article is accurate. It was 2010 when the last tax hikes on gas were suggested. Not, solely by Republicans. I guess we could keep trying to blame past administrations for everything until those people are either dead or 100 years old. That would be real bright, wouldn't it. It is also untruthful. Maybe we could blame Bush for the asteroid that just hit Russia. He has been blamed for everything else this administration is doing.

troy lamken
February 15, 2013 at 1:28 pm

flyboy7588 your an idiot. i do agree with you about raising the gas tax, but it was the previous administrations out of control spending that we are trying to fix.

EDUARDO
February 15, 2013 at 9:31 am

DOES THE SUN RISE IN THE EAST ?

george
February 15, 2013 at 8:55 am

The current push by Obama and the EPA is to force car makers to increase gas mileage and move hybrids onto the byways. That coupled with the already high gas prices has diminished the sale of gasoline across the country.

People find themselves either cutting back driving or being responsible stewards by driving more fuel efficient cars.

Less demand for the commodity and less tax for the government.

Dammed if you do and dammed if you don't.

So all of who thought that buying a fuel saving car will actually be saving your wallets..............think again.

ruthy
February 15, 2013 at 8:54 am

All I want to know is that the current gas taxes are accounted for and placed in a dedicated fund that allows only infrastructure use of the money. And I would like to reiterate that that doesn't mean another czar to run the $$$billion dollar fund. I would also like to know just how much gas tax money comes into the federal government annually.

Flyboy7588
February 15, 2013 at 8:53 am

This is what you get when you re-elect a former community agitator with absolutely NO business experience to the White House. All this incompetent fool knows how to do is raise taxes in order to continue his out of control spending. Any person in congress who votes to increase fossil fuel taxes must be tossed out of congress.