U.S. Lawmakers Eye Gas Tax Hike

Posted by Joseph Keefe January 8, 2015

As U.S. gasoline prices plunge to the lowest level in more than five years, some U.S. lawmakers see a golden opportunity to bump up taxes at the pump to help pay for the repair of crumbling roads and bridges.

Fuel taxes have been flat for more than 20 years, starving the Highway Trust Fund of revenue used for rising infrastructure repair costs. Lawmakers have fueled the fund with last-minute short-term injections of cash, but want to find a more permanent fix.

Last July, before a similar deadline, Republican Senator Bob Corker of Tennessee and Democrat Chris Murphy of Connecticut proposed raising federal gasoline and diesel taxes by 12 cents a gallon over two years from the current 18.4 cents.

The idea failed to take hold, for the same reason similar proposals failed in the past: the idea of raising taxes on consumers has been anathema to lawmakers on both sides of the aisle, particularly for conservatives who have signed pledges not to hike taxes.

Republican Senator Jim Inhofe, the new chairman of the Senate Environment Committee, said on Wednesday a gasoline tax, or "user fee," as he prefers to call it, was one of the measures "on the table" as his panel works on a new transportation bill this year.

But Inhofe stopped short of supporting such a fee. He said it was unlikely the measure could gain enough support for the Senate to pass it soon. Even if it did, fuel prices could be on their way up by the time legislation passes, he said.

Dick Durbin, the No. 2 Democrat in the Senate, said he favored increasing the gas tax but that it should be coupled with relief for consumers through tax credits or other means.

"I think now's the time to do it, but we ought to do it in a thoughtful way," Durbin told reporters.

President Barack Obama has said he wants to work with Republicans to fund infrastructure through a corporate tax reform package. The White House has made clear Obama is not advocating an increase in the gasoline tax but is willing to look at it if there is a groundswell of support for the move.

Obama told business leaders last month he would talk to Republican leaders to see whether proposals for a gas tax hike "have any legs," but he acknowledged that "votes on a gas tax are really tough" for lawmakers.