Falling gas prices could spur new federal taxes
America's roads and bridges are crumbling, thanks in no small part to the gas tax (or a lack thereof, say critics). Upkeep for American transportation infrastructure is provided in large part by the Highway Trust Fund, which relies on gas and diesel taxes for its funding. But the Fund is running dry. According to CNBC, the fund will be short $160 billion over the next ten years. This is partially down to Americans buying more and more fuel-efficient vehicles. Beyond that, though, the 18.4-cent-per-gallon tax hasn't kept pace with inflation, as it's been unchanged since 1993.
Senator Bob Corker, a Republican from Tennessee, and Sen. Chris Murphy, a Democrat from Connecticut (hooray for bipartisanship!) are pushing for the tax to increase 12 cents over the course of two years. This is not the first time this pair has been in the news for a gas tax hike, although their reasoning behind such a move has remained consistent.
According to the US Bureau of Labor Statistics' Consumer Price Index, 18.4 cents in 1993 has the buying power of 30 cents in 2014; so really, the new tax rate doesn't represent much of an increase at all. Beyond that, the tax would be indexed to inflation using the CPI to maintain the tax's buying power. Overall, this latest proposal remains lower than previous attempts at an increase.
"What we floated is obvious. There is not enough money coming in," Sen. Corker told CNBC.
"For too long, Congress has shied away from taking serious action to update our country's aging infrastructure," said Sen. Murphy said in a statement on Sen. Corker's website. "We're currently facing a transportation crisis that will only get worse if we don't take bold action to fund the Highway Trust Fund.
The proposal even has some proponents on the right side of the aisle, including Sen. John Thune, R-SD and Sen. Jim Inhofe, R-OK. Thune heads the Senate Commerce Science and Transportation Committee and Inhofe chairs the Environment and Public Works Committee. Not all Republicans are on board with Corker and Murphy's plan, however, including Speaker of the House John Boehner.
That's despite the fact that the Corker/Murphy plan makes significant concessions to fiscal conservatives. According to CNBC, if the gas tax increase goes through, there could be other tax decreases equivalent to the added income of the increased gas tax.
What are your thoughts? With fuel prices at extreme lows, is now the time to increase taxes to maintain road funding? Should Congress be looking at another method of funding infrastructure maintenance and improvement? Take a look below for a news report on the increase, and then head into Comments and let us know what you think.
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