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Issue Date: Vol. 54, No. 7, July 2014, Posted On: 6/20/2014

Proposed 12¢ Gas Tax Hike May Garner Bipartisan Support

Hank Schlesinger
TAGS: vending machine route, bulk vending operator, commercial fleet news, Bob Corker (R-TN), Chris Murphy (D-CT), Highway Trust Fund, federal gas tax hike proposal, fuel taxes, gas tax increase, small business news

WASHINGTON -- In a bipartisan effort to raise revenue, U.S. Sens. Bob Corker (R-TN) and Chris Murphy (D-CT) have unveiled a proposal to shore up the Highway Trust Fund by making changes to the federal motor fuels tax, which funds roadway improvements. The proposal would increase the tax on fuel by 6¢ a year for two years, then indexing increases to the Consumer Price Index.

The proposal comes as the federal Highway Trust Fund, which provides more than half of the country's spending on transportation projects, will begin to run dry in July. This will likely halt the construction of any new transportation projects and create a $160 billion hole in state budgets over the next decade.

The Senators point out that federal gas and diesel taxes used to fund the highway trust have not been updated in more than 20 years. Indexed for inflation, the purchasing power of the current tax is approximately 63% of what it was in 1993.

The current federal excise tax on gasoline is 18.4¢ a gallon and for diesel fuel it's 24.4¢ per gallon. On average, as of April 2014, state and local taxes add 31.5¢ to gasoline and 31¢ to diesel for a total U.S. average fuel tax of 49.9¢ a gallon for gas and 55.4¢ per gallon for diesel.

"Growing up in Tennessee as a conservative, I learned that if something was important enough to have, it was important enough to pay for. That's how we've governed in the Volunteer State, which has resulted in the second-best transportation system in the country without having one penny of road debt," said Corker.

"In Washington, far too often, we huff and puff about paying for proposals that are unpopular, yet throw future generations under the bus when public pressure mounts on popular proposals that have broad support," the Republican continued. "Congress should be embarrassed that it has played chicken with the Highway Trust Fund and allowed it to become one of the largest budgeting failures in the federal government. If Americans feel that having modern roads and bridges is important then Congress should have the courage to pay for it."

To offset the cost of the tax increase, Corker and Murphy's proposal provides net tax relief for American families and businesses. Similar proposals have received bipartisan support. Presidents Ronald Reagan, Bill Clinton, and George H.W. Bush all raised the gas tax in order to fund the trust and make infrastructure improvements.

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