President Trump might be open to raising the gas tax by 25 cents a gallon to raise money for infrastructure projects, but the idea faces a long, tough road at best. While the influential Chamber of Commerce has gotten behind the proposal, few lawmakers are showing much interest.
Fuel taxes – currently 18.4 cents a gallon on gasoline and 24.4 cents a gallon for diesel – haven’t been raised since 1993, leaving the Highway Trust Fund, which supports road construction and mass transit, in a chronic state of underfunding. According to the CBO, each 1 cent increase in the gas tax produces $1.5 billion to $1.7 billion in revenue.
One problem is that numerous special interest groups, and that includes the powerful Koch brothers political network, oppose any increase in the tax. And few politicians want to do anything that would hit their constituents’ pocketbooks so directly, whatever the long-term benefits for the economy. According to Strategas Research, a 25-cent increase in the gas tax could eat up more than half of the tax cut received by U.S. households.
Tom Kloza, chief strategist at Oil Price Information Service, told CNBC: "It's responsible to fund spending. I don't think anyone argues about that, but gasoline and gasoline taxes are kind of a third rail in American politics. I don't think that President Trump or members of Congress want to be voting on or authorizing or emphasizing a gasoline tax increase this year."
