With President Trump and Congress now possibly about to pivot to long-postponed infrastructure modernization legislation, which will have to be paid for, change might just be imaginable. Or so the U.S. Chamber of Commerce seems to believe. The Chamber, a powerful business lobby with close Republican ties, has announced a push for a 25-cents-per-gallon increase, phased in over five years and indexed to inflation. This is not a brand-new cause for the Chamber, which has backed such proposals in the past. Yet the case the organization articulates is particularly strong; if reasoning were the only consideration, as opposed to Congress's reflexive terror at raising taxes, the plan would be adopted by a voice vote in both the House and Senate and speedily signed by the president.
The federal trust fund that pays for highways and transit projects is funded for the next two years — on paper; Congress employed a lot of budgetary gimmicks. By 2027, however, the fund will have accumulated a $138 billion deficit, unless it slashes planned spending by that much. The Chamber's proposed tax would raise $394 billion over the next decade, enough to restore the trust fund to solvency — with money left over for additional projects and a smidgen of deficit reduction. The typical driver would pay about $108 more per year, but that could be offset by the benefits of better roads, in the form of reduced traffic and less vehicle damage. It's also a rough — too rough, admittedly — proxy for a carbon tax, which would help the environment.
Mr. Trump's off-the-cuff remarks rarely, if ever, constitute reliable guides to his actual policy thinking, as recent events remind us. However, in May 2017, he said he would "consider" raising the federal gas tax to pay for his promised increase in infrastructure spending. And six months later, National Economic Council Director Gary Cohn reportedly backed that up by floating a 7-cent-per-gallon hike. Nothing came of these comments, but they were rare flashes of fiscal responsibility from the same bunch that brought us a $1.5 trillion tax cut paid for by new projected borrowing. We are mindful of the fact that a gas-tax increase would nullify some of the small tax cut that lower- and middle-income Americans got from that bad bill. That is an argument for trying, over time, to undo the tax cut's most wasteful giveaways to the wealthy, not for abandoning fiscal responsibility yet again when it comes to funding infrastructure.
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