Trump proposes increasing gasoline tax by 25 cents/gallon

[Quintillus]

Source

President Trump endorsed a 25-cent gas tax hike to pay for infrastructure at a White House meeting this morning with senior administration officials and members of Congress from both parties, according to two sources with direct knowledge. Trump also said he was open to other ways to pay for infrastructure, according to a source with direct knowledge.

Further analysis from CNBC:

The president has communicated to staff that he is open to raising the gas tax for weeks, ever since the U.S. Chamber of Commerce proposed it, CNBC can confirm.

The federal government has not raised the gas tax since 1993. Funds raised through the charge pay for road construction and investments in mass transportation through the Highway Trust Fund.

In the roughly 25 years since the last hike, inflation has whittled down the buying power of dollars raised through the tax. Vehicles on the road have also become more fuel efficient, further diminishing the levy's ability to fund highway repairs.
...
On Monday, nearly 30 conservative groups opposed raising the gas tax in a letter to lawmakers.

"Raising the gas tax is a bad idea," the signatories wrote. "It will make the burden of government on families and businesses heavier. A higher gas tax means higher prices not just on gas, but on goods and services throughout the economy."

What is your position?

 

[Quintillus]

I support the gas tax increase, for both infrastructural and environmental reasons. Environmentally, because purchases of fuel-efficient vehicles has tended to correlate with higher gas prices over the past 10-15 years. And infrastructurally, since there is a lot of infrastructure that needs investment in the U.S., particularly bridges on highways, and public transportation.

 

[hobbsyoyo]

I have mixed feelings. In general I'm for taxes to support infrastructure but this is regressive. Also, this money will be funneled directly into corrupt public/private partnerships which in turn will own all the projects they work on and will use them to set up tolls on all the highways.

But our infrastructure does need massive overhaul so....

 

[FriendlyFire]

I support the gas tax increase, for both infrastructural and environmental reasons. paying tax cuts for the rich .

FIXED
Most of the budget from fuel tax gets raided for other projects I suspect it will be the same for the US.

 

[Birdjaguar]

Taxing fuel is becoming outdated because of efficiencies and electric cars. States are looking at ways to change the tax to mileage rather than fuel. That is better for matching the tax to usage. But, it is more invasive since it would involve collecting driving data.

 

[hobbsyoyo]

Trump is also pushing states to increase their own taxes to pay for their portion of his infrastructure plan which is ironic due to his cuts to SALT write-downs in the tax overhaul last year. They penalized high tax states for having responsible budgets but also want them to raise taxes more to pay to pay for an infrastructure plan we can afford due to tax cuts for the rich and ever-spiraling military budgets.

How about this - instead of raising taxes that will harm the poor disproportionately, why don't we cut some funding for wars overseas? Surely the money we've spent rebuilding highways we blew up in Iraq and Afghanistan could be spent at home instead. And maybe we don't need 700 new fighter jets when no one can match our current ones?

 

[Quintillus]

I have mixed feelings. In general I'm for taxes to support infrastructure but this is regressive. Also, this money will be funneled directly into corrupt public/private partnerships which in turn will own all the projects they work on and will use them to set up tolls on all the highways.

But our infrastructure does need massive overhaul so....

Yeah, I'm not keen on the public-private partnerships. I would be very much split on the question of, "do you support raising gasoline taxes to fund public-private partnership infrastructure projects?" And I generally favor progressive taxes, but the exceptions are where there are positive social impacts to regressive ones as well. In this case, the environmental aspects - higher progressive taxes is less likely to result in fuel-efficient vehicle choices than higher gas taxes - and as another example, I support higher cigarette taxes due to the lower smoking rates they tend to lead to (particularly when increased by a significant amount all at once).

FIXED

Well, yes, I would not support raising the fuel tax if the only purpose were funding the tax cut for the rich. I only support it as long as it actually goes towards infrastructure.

Taxing fuel is becoming outdated because of efficiencies and electric cars. States are looking at ways to change the tax to mileage rather than fuel. That is better for matching the tax to usage. But, it is more invasive since it would involve collecting driving data.

Yeah, and that's something I'm not comfortable with the government doing. They already have enough ways to track where people are - CCTV cams, the license plate readers more and more police departments are installing, cell phone signals (which do still have some warrant protections). Although I suppose it might cut down on speeding tickets if you instantly got a $100+ fee for speeding.

I also don't participate in those programs that some insurance companies have where they track your driving habits and may offer you a discount. Mainly because it's creepy, and very few of them disclose how they use, store, or secure that information (I'm aware of one that will let you see the data that is collected). But also because from an economic standpoint, the common promise that they can only ever offer discounts and never charge more doesn't add up: if the average discount starts adding up, that will decrease revenue and require some penalties. I believe at least one large company has already started adding penalties to some of their tracked drivers based on poor driving records. Sure, some driving habits may improve a bit, but not enough to match the discounts given.

 

[hobbsyoyo]

Yes, the potential positive impact for the environment is good but I tend to think that the demand for gasoline is inelastic enough that it won't make a huge difference. I would love to be wrong though.

Also from the very little reading I've done on insurance car tracking - they almost never give discounts and do give heavy penalties for trivial 'bad driving'. Could be wrong though, I've barely read on it.

 

[Quintillus]

Trump is also pushing states to increase their own taxes to pay for their portion of his infrastructure plan which is ironic due to his cuts to SALT write-downs in the tax overhaul last year. They penalized high tax states for having responsible budgets but also want them to raise taxes more to pay to pay for an infrastructure plan we can afford due to tax cuts for the rich and ever-spiraling military budgets.

How about this - instead of raising taxes that will harm the poor disproportionately, why don't we cut some funding for wars overseas? Surely the money we've spent rebuilding highways we blew up in Iraq and Afghanistan could be spent at home instead. And maybe we don't need 700 new fighter jets when no one can match our current ones?

I've never quite grasped the SALT deduction. Yes, it's good if you live in a high tax area, but why should the federal government reduce their tax revenue from you just because you live in a high-tax state or locality? Shouldn't the tradeoff of living in a high tax area be paying higher taxes, in return for better services? Granted, I always tax the standard deduction and am in a mid-tax area anyway; I do know some people who itemize and seem much more passionate about SALT.

I would definitely support decreasing military funding, particularly overseas. It's yet another tragedy of the Iraq war to me; our infrastructure would really be in much better shape if we'd plowed that in to infrastructure starting in 2003 instead.

Which reminds me of the one point Trump keeps making that I, and most of my politically-minded Democratic friends agree with: most NATO countries don't pay their share. But that's another topic.

 

[Hygro]

No to taxes, although a fuel tax corrects for some externalities of using that fuel so I'm not as bothered.

 

[hobbsyoyo]

I've never quite grasped the SALT deduction. Yes, it's good if you live in a high tax area, but why should the federal government reduce their tax revenue from you just because you live in a high-tax state or locality? Shouldn't the tradeoff of living in a high tax area be paying higher taxes, in return for better services? Granted, I always tax the standard deduction and am in a mid-tax area anyway; I do know some people who itemize and seem much more passionate about SALT.

I would definitely support decreasing military funding, particularly overseas. It's yet another tragedy of the Iraq war to me; our infrastructure would really be in much better shape if we'd plowed that in to infrastructure starting in 2003 instead.

Which reminds me of the one point Trump keeps making that I, and most of my politically-minded Democratic friends agree with: most NATO countries don't pay their share. But that's another topic.

I'm actually with you on SALT deductions. For me though it's a major point of contention because right-wingers always fight 'double taxation' when it applies to them and then with this tax bill in particular they quite literally went out of their way to target liberal states.

 

[Quintillus]

Yes, the potential positive impact for the environment is good but I tend to think that the demand for gasoline is inelastic enough that it won't make a huge difference. I would love to be wrong though.

Also from the very little reading I've done on insurance car tracking - they almost never give discounts and do give heavy penalties for trivial 'bad driving'. Could be wrong though, I've barely read on it.

I think it's a bit of a catch-22. In the short term, I agree, the demand is fairly inelastic. But over the longer term, I think it does add up. SUV sales were lower when gas was $4/gallon. They're lower in Europe where gasoline is often the equivalent of $7-8 a gallon. People can't switch to more efficient vehicles overnight, but will over time.

Public transit is the other part of the catch-22. In many areas it isn't feasible to switch to public transit now, in part because public transit spending has been low because of low funding due in part to the low gas tax. A higher gas tax would help fund public transit (in addition to roads), which would make it easier to reduce gasoline demand over time.

I happen to work for an insurance company that you've probably heard of, so have more knowledge than most of the insurance car tracking, although I should note that the details (formulas, details of data collection and storage, etc.) are a black box unless you work directly with that, which I don't. But at a higher level, at least where I work, they actually do give discounts, though the amounts vary, and do not currently give penalties, though as I mentioned I don't think that is sustainable long-term. But I'm pretty sure I've read about another company that does give penalties. And over the long term, the end game is clear: if 80% of people sign up for car tracking, those with what are considered "safer" habits will pay less, and those with "riskier" habits will pay more. Which in a way, already happens - your rate will almost surely go up if you are in an accident - but I'm not convinced that is really a good thing for society. If the goal is safer driving habits, I'd rather focus on things like cell phone use while driving.

 

[hobbsyoyo]

They could also be performing a long-term bait and switch. Give people incentives to sign up, reach critical mass, apply penalties for driving errors and bigger penalties for those who opt out.

 

[FriendlyFire]

I think this is a dead issue with Republicans in control, its seems more of a democrat thing to increases taxes (after the GOP has slash taxes) in an attempt to fix things
This gas tax seems more in line with most of the rest of the western world with our high fuel prices and high fuel tax. The US has built so many roads, bridges and tunnels it cannot maintain them with the current expenditure and usage. Not to mention much was built during a time when steel and concert construction techniques weren't advanced and designed for long term usage

On the other hand it seems to be more madness as GOP just pass another round of tax cuts and backloaded tax increases.

 

[Zelig]

Order of magnitude too low.

 

[hobbsyoyo]

And why do we accept that these taxes have to come from gasoline sales? What's the argument against increasing the income tax instead? That way the poor are not impacted.

 

[Zelig]

And why do we accept that these taxes have to come from gasoline sales? What's the argument against increasing the income tax instead? That way the poor are not impacted.

Rebate the poor.

 

[hobbsyoyo]

Rebate the poor.

Yes, that's how the income tax works.

 

[Zelig]

Income tax doesn't disincentivize gasoline and personal vehicle use.

 

[Arwon]

Petrol taxes in the US are way too low to even cover roads so yeah, they should be raised