Gas tax should rise 25 cents to fund road repair: US Chamber of Commerce

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It's an unusual thing, to say the least, when the U.S. Chamber of Commerce publicly suggests a major tax increase.

In general, the pro-business lobbying group advocates for tax cuts, reducing or eliminating regulations, and free-market policies that allow companies to operate however they choose.

But there it was on Tuesday: The Chamber will propose a 25-cent-per-gallon increase in the federal tax on gasoline paid by everyone who fills up at the pump.

DON'T MISS: Fuel Efficiency Hurts: Gas Tax Revenue Plummets, Roads Crumble (Nov 2011)

The group intends to introduce a set of principles it believes should guide a long-overdue and comprehensive effort to upgrade the nation's roads, highways, bridges, tunnels, and other transportation infrastructure.

Raising the gas tax, however, is described as an "uphill battle" in coverage of the proposal by The Washington Post.

Congress last raised the U.S. federal gas tax 25 years ago in 1993, to the 18.5-cents-per-gallon level it remains at today. Diesel fuel is taxed at 24.4 cents per gallon.

Chevrolet Silverado Heavy Duty drive with John Deere, Jessica Walker, courtesy of Chevrolet

Chevrolet Silverado Heavy Duty drive with John Deere, Jessica Walker, courtesy of Chevrolet

In private meetings, President Donald Trump is reported to have proposed raising the tax as much as 50 cents a gallon—an idea that received, the Post said, a "chilly reception" among Republican leaders who control the House and the Senate.

Still, a major infrastructure improvement program will require hundreds of billions of dollars of funding, and it's not otherwise clear where that money will come from.

Such a proposal has been a long time coming.

READ THIS: Low Gas Price An Opportunity For Higher Gas Tax? Not A Chance (Jan 2015)

Over the years, numerous CEOs and corporate leaders—from Ford chairman Bill Ford to AutoNation CEO Mike Jackson—have said publicly the gas tax should rise.

"The U.S. allows the price of gasoline to go back and forth across this line where the consumers don't care about fuel efficiency and where consumers do care about fuel efficiency," said Jackson in 2009.

Then-General Motors board member Jerry York echoed the sentiment, suggesting to Reuters the same year the challenge of selling more fuel-efficient vehicles: "Unless gas is $3.50 or $4 a gallon, consumers are not going to want to buy those cars."

Chevrolet Silverado Heavy Duty drive with John Deere, “Jessica Walker, courtesy of Chevrolet

Chevrolet Silverado Heavy Duty drive with John Deere, “Jessica Walker, courtesy of Chevrolet

Over 10 years, a 25-cent increase in the gasoline tax would raise more than $375 billion, according to the Chamber's calculations—far more than the $200 billion the Trump Administration plans to propose when or if its long-delayed infrastructure plan is released.

That plan, however, is reported to use that money to incentivize private companies to invest in infrastructure repairs and expansion, presumably leading to more and higher tolls on highways, roads, bridges, and tunnels to pay them back.

The corporate average fuel-economy rules passed in 2010 and 2012, covering model years 2012 through 2025—which the administration seems likely to freeze or roll back—have cut federal gas-tax revenue to the point that every single state gets more in transportation funding from the Feds than it sends in gas-tax revenue.

CHECK OUT: NJ dedicates all gas tax revenue to transportation infrastructure (Nov 2016)

The NHTSA and EPA, under the direction of the Trump administration, seem likely to freeze or even roll back the aligned fuel-economy rules and carbon-emission limits passed by the Obama administration.

Meanwhile, the George W. Bush administration signed a bill that incentivized the purchase of plug-in electric vehicles, both battery-electric and plug-in hybrid models, by giving a federal income-tax credit to buyers, based on the car's battery size.

Any proposal for fuel-tax increases will likely include provisions for fees on plug-in electric and hydrogen fuel-cell vehicles, which use very little or no gasoline.

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Gas pump

Many states have imposed such fees to make up for the state-tax revenue lost when those cars are operated.

Some kept the fees at or below the revenue an average gasoline car provides; others, including Georgia, imposed electric-car fees that are punitive: the fee to the state is higher than the tax revenue it would receive from a similar gasoline-powered vehicle.

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