Fuels

Is Trump Eyeing a Federal Gas-Tax Increase?

Congress could vote early next year on first increase in nearly 25 years

WASHINGTON -- The Trump administration might support an increase in the federal gasoline tax to help pay for its $1 trillion infrastructure plan, according to reports.

Politico and The Hill both reported that White House economic adviser Gary Cohn told House legislators this past week that an upcoming infrastructure bill could include an increase in the federal gas tax, which has sat at 18.4 cents per gallon (CPG) since 1993. "Cohn seemed receptive to it," a participant at the meeting told The Hill.

An industry source told The Hill that the Trump administration plans to support a 7-CPG increase, although it was not certain whether the proposal would be part of the initial infrastructure bill or if the White House would try to have it included during committee deliberations.

President Trump had suggested earlier this year that he was open to increasing the federal gas tax, but later dropped the topic after Republican legislators and conservative leaders pushed back forcefully on the idea. But since then, the White House has been eager to pass a major legislative effort, The Hill said. An increase in the federal gas tax would help fund and ease the passage of Trump’s $1 trillion infrastructure proposal, the outlines of which were floated this past summer but then shelved as Congress focused on repealing the Affordable Care Act and tax reform.

Earlier proposals to raise the gas tax—which has been losing its fundraising power with improving vehicle fuel efficiency—have been fiercely opposed by Republican leadership. This includes Senate Majority Leader Mitch McConnell and House Speaker Paul Ryan and Majority Leader Kevin McCarthy.

“I don’t think anybody on my side of the aisle wants to add to the deficit or raise the gasoline tax right now,” Republican Sen. John Kennedy said this past week.

But many Democratic legislators and some Republicans, as well as the U.S. Chamber of Commerce, members of the business community and several states controlled by Republican governors and legislatures, support raising the fuel tax to fund transportation improvements.

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