In need of a revenue source for its ambitious infrastructure proposal, top officials in the Trump administration have floated the idea of a hike in the gas tax to help prop up a depleted highway trust fund.
The proposal was always a long shot, with Republicans running both chambers of Congress. This month, however, Senate Minority Leader Chuck Schumer (D-NY) provided the formal death blow when he told The Daily Beast that he too was opposed to the idea.
“The bottom line is that we don’t want to raise taxes on working people right now,” Schumer said. “As it stands now that is where we are at. Income distribution is so bad, I would rather pay for infrastructure by taking the money that comes from overseas [repatriation] and putting it into infrastructure.”
Schumer is, perhaps, the most important lawmaker in Congress when it comes to the crafting of an ambitious infrastructure package. Unlike his Republican counterpart, Majority Leader Mitch McConnell (R-KY), he has openly pursued a deal with President Donald Trump to build a trillion-dollar plan that would touch on everything from roads and bridges, to airports and rail. The question has always been twofold: Would Trump approve of that price tag (or try and finance it through tax breaks) and, if so, from where would the money come?
In late October, Trump’s chief economic adviser, Gary Cohn, raised the possibility of hiking the excise tax on gasoline, which is currently at 18.4 cents per gallon and hasn’t been raised since 1993. House Democrats, who have been far more favorably disposed to the idea, have said that the tax Cohn floated wasn’t sufficient enough. Others have pushed for the repatriation idea that Schumer supports. Schumer’s opposition to the gas tax hike means there is virtually no way of it making it through Congress at all.
Former Transportation Secretary Ray LaHood, who now serves as co-chair of Building America’s Future, a bipartisan coalition dedicated to infrastructure investment, called Schumer’s remarks shortsighted. Without a gas tax hike, LaHood argued, you wouldn’t get the necessary revenue to holistically fix America’s infrastructure needs. A 10-cent hike would raise roughly $15 billion, he projected, adding that the politicians who embraced the idea would be rewarded instead of punished.
“Twenty-five states in the last three years have raised their own gas tax and nobody has been thrown out of office,” said LaHood. “You know why? Because people in the states get it. They see roads and bridges being fixed and they see their tax dollars being spent in the right way.”