McCarthy Rejects Gas Tax Hike

June 30, 2014

Newly elected House Majority Leader Rep. Kevin McCarthy opposes the effort, spearheaded by Sens. Bob Corker (R-Tenn.) and Chris Murphy (D-Conn.), to boost federal gas taxes by 12 cents over the next two years, reports the Fiscal Times.

According to the Department of Transportation, the highway trust fund will exhaust its funds by early August. Congress and the White House continue to disagree on the best way to fund the program.

The gas tax has not changed for 20 years and raises around $35 billion a year. However, the federal government spends over $53 billion on road-related projects. Furthermore, gas tax revenues continue to fall as cars become more fuel-efficient and are used less.

But the idea of raising taxes in an election year is causing lawmakers to reconsider the wisdom of a tax hike, especially as the Iraqi crisis will likely raise oil prices which will affect American consumers in the coming summer and fall.

Suggestions, other than raising the gas tax, to address highway funding have included:

  • Closing corporate tax loopholes for four years and using that revenue to expand highway trust funding.
  • Enticing US multi-national companies to repatriate offshore profit in return for a one-time huge tax break.
  • Ending most Saturday postal deliveries and moving those savings to the trust fund.

Currently, the federal gas tax sits at 18.5 cents per gallon.

Source: Eric Pianin, "Kevin McCarthy Slams the Brakes on a Gas Tax Hike," Fiscal Times, June 23, 2014

 

Browse more articles on Economic Issues