White House At Least Considering Increasing Gas Tax, Needs to Consult Congress

Matt Posky
by Matt Posky

The United States’ 18.4-cent-per-gallon tax on gasoline and 24.4-cent tax on diesel hasn’t changed since 1993. Despite this, the opinion that it should be hiked as a way of funding public works was nowhere near the White House’s official infrastructure strategy. But Donald Trump isn’t averse to the idea. In fact, he proposed a 25-cent increase to senators during a Wednesday meeting as a possible funding solution.

White House officials claim the president says “everything is on the table” in terms of finding a solution for America’s growing infrastructure problems. But how serious the rest of the Trump administration is about raising the fuel tax is debatable.

Delaware senator Tom Carper, who attended a meeting between the president and lawmakers, told Reuters he hadn’t expected a tax hike to even be an option during Wednesday’s discussion.

“To my surprise, President Trump, today in our meeting, offered his support for raising the gas and diesel tax by 25 cents a gallon and dedicating that money to improve our roads, highways, and bridges,” Carper explained. “The president even offered to help provide the leadership necessary so that we could do something that has proven difficult in the past.”

However, Carper also said Trump repeatedly expressed concerns that it was a difficult proposal for legislators to support unanimously, and he would need to find a way to convince congress it was the right strategy.

Transportation Secretary Elaine Chao voiced similar concerns on Tuesday when she spoke to reporters at the White House. “The President has not declared anything out of bounds, so everything is on the table. The gas tax, like many of the other pay-fors that are being discussed, is not ideal,” she said.

“There are pros and cons. The gas tax has adverse impact, a very regressive impact, on the most vulnerable within our society; those who depend on jobs, who are hourly workers. So these are tough decisions, which is why, once again, we need to start the dialogue with the Congress, and so that we can address these issues on this very important point.”

Meanwhile, Oklahoma senator Jim Inhofe publicly condemned Carper’s characterization of the meeting, saying he had confused Trump’s openness to multiple solutions with outright support of a gas tax increase. “He was not advocating that. He was looking at all the options,” Inhofe said. “All he said was we need to do something and that is still on the table.”

The White House presented an infrastructure plan on Monday that intends to convert $200 billion in federal funding into $1.5 trillion by tapping into local and state tax dollars and private investments. Its plan does not specify how it will source the federal revenue at all. Instead, it suggests local governments and private entities find their own through tolls and user fees, which could win them federal grants needed for use on projects.

Congress also doesn’t appear to be too optimistic about passing an increase in the gas tax. While Democrats insist any infrastructure plans have to include include new revenue sources, not all of them appear willing to support a tax hike on fuel. Republicans are, on average, substantially less excited to back the idea of additional taxation, and some have already come out saying they would oppose such a proposal.

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • 87 Morgan 87 Morgan on Feb 15, 2018

    I love this debate and enjoy reading the comments. I too would support an increase if the funds would be allocated to roads. I wonder if there was a way to raise the tax with language written into the bill that guarantees the increase can *only* be used for repair or replacement of existing infrastructure. Basically put a lid on the spending of the dollars on anything but roads and bridges that already exist and are in need of repair or replacement. I am certain that new highways and bridges to nowhere need to be built, but it would be nice if we could get the ones that we already built to somewhere up to a safe standard.

    • See 5 previous
    • Big Al from Oz Big Al from Oz on Feb 16, 2018

      @DenverMike Um, DiM, I do believe the EU has larger choice of vehicles. Plus, you can grey import. This notion you have regarding the US vehicle market is inaccurate. As always research prior to spruiking nonsense.

  • Big Al from Oz Big Al from Oz on Feb 16, 2018

    Its a good idea to use fuel tax to maintain the push toward more economical vehicles and hopefully the money does go towards improving and developing transport infrastructure. Trump and the GOP will need to get money from somewhere with their tax cuts the US to maintain it's current rate of expenditure will need to find money from somewhere. So, maybe the tax increase will offset the rich and famous 1% tax cut they will be getting.

  • JMII Wonder what the Hyundai version will look like because I am NOT a fan of this styling.Also someone needs to explain to H/K/G that you want the dark colored interior parts were you touch/sit and the lighter color parts elsewhere. For example the door panels here are dark with light armrests - this is backwards. Genesis made the same mistake in the GV60's white/ash (grey) interior. While I greatly appreciate something other then the dreaded black cave interior did they not consider how impossible this will be to keep clean in the real world?
  • JMII I see lots of ads for their CUVs but given the competition in this segment why would I buy an Outlander over a similar product from Toyota, Honda or Hyundai? Mitsubishi needs to offer something compelling, some hook or defining difference. I don't think I've encountered a single person who says "wow have you seen the new [blank] from Mitsubishi? I need to get me one of those".I owned a Mitsubishi Eclipse GS-T back in '96 and it was fun car. Mitsubishi once made interesting choices with a rally heritage - those cars were fast and pretty high tech at the time. Like Nissan they kind of fell into the we will finance anyone pool so other then an Evo as a track toy anyone I knew steered clear of them.
  • ToolGuy It will be interesting to see how this does.
  • TheMrFreeze Last I looked it wasn't the Gen Z'ers who had money to buy cars (or even have driver's licenses), it's us older folks who, by and large, aren't willing to risk spending that much money on a Chinese car
  • TheMrFreeze Possibly a smart move by their parent company. If they position Mitsubishi here in the US to be a bargain brand, maybe build more low cost cars in places like Thailand (where the Mirage is/was built), they could possibly usurp the low-end segment of the US market the Chinese would have tried to occupy had the 100% tariff not happened. Mitsubishi does have the advantage of at least some brand recognition and an existing dealership network here in the US to start with.