Economy & Business

Slam the Brakes on the Proposed Gas-Tax Hike

(Kevin Lamarque/Reuters)
It would guzzle the widespread benefits of the Trump/GOP tax cuts.

Thanks to the Tax Cuts and Jobs Act, Republicans are on a roll. So why is President Donald J. Trump praising a gas-tax hike to finance his infrastructure plan?

Despite House Democratic leader Nancy Pelosi’s complaints that the GOP tax-rate reductions are “Armageddon, “crumbs,” and — as of last week — “unpatriotic,” Americans are growing fond of tax reform. Tax-relief promises helped boost GDP growth from 2016’s 1.5 percent (under Obama) to 2017’s 2.3 percent (under Trump). Unemployment is just 4.1 percent. And some 3.8 million Americans at 377 companies are enjoying bonuses, higher wages, lower power bills, and other post-tax-cut benefits.

Survey Monkey has watched the tax cut’s popularity climb from 37 percent of adults in December to 46 percent in January to 51 percent on February 11. Eight percent of Democrats backed this measure in December. Today, 19 percent do.

These and other GOP victories have blunted Democrats’ edge in RealClearPolitics’ generic-poll average, from 13 percent in December to 7 percent now. Politico last week found generic Republican congressional candidates leading Democrats, 39 percent to 38.

So, with tax cuts buoying Republican prospects, February 14’s Washington Post bore jarring news. Senator Thomas Carper (D., Del.) said: “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.”

Lifting this levy from 18.4 cents per gallon (where it has stood since 1993) to 43.4 cents boosts it 136 percent. Even if phased in over five years, as some suggest, this bad idea is even worse amid rising oil prices. A gallon of regular that sold for $2.28 a year ago costs $2.52 today.

Even if phased in over five years, as some suggest, this bad idea is even worse amid rising oil prices.

“A higher gas tax means higher prices not just on gas, but on goods and services throughout the economy,” Americans for Prosperity’s Brent Gardner warns in an open letter signed by 28 limited-government organizations. “These costs would inevitably be passed along to consumers in the form of higher prices, resulting in a regressive tax hike on those who can least afford it.”

If Trump thus dilutes the GOP’s tax cuts, which have helped bolster his approval numbers (49 percent in Wednesday’s Rasmussen poll, versus Obama’s 45 percent for the analogous date in his reign), Democrats will hammer Trump for betraying the forgotten men and women he has served so well, so far. Imagine this Democratic ad, just before November’s midterm election:

“Trump slashed corporate taxes for CEOs on Wall Street and hiked fuel taxes for workers on Main Street. Call Trump at 202-456-1414 and tell him: ‘Get your multi-billionaire fingers out of our gas tanks.’”

Not helpful.

Ominously, Strategas Research estimates that “60 percent of the individual tax-cut savings in 2018 would be wiped out by rising gasoline prices and a 25¢-per-gallon gasoline tax increase.”

“There is no need for a gas tax hike,” which would cost a typical family $300 annually, argues Americans for Tax Reform’s Adam Radman. “The problem is, gas tax revenue is siphoned off to pay for projects unrelated to roads and bridges,” including bike paths, a $6 million Delaware boardwalk, and $120,000 for a “white-squirrel sanctuary” in Tennessee.

This counterproductive gas-tax chatter contradicts earlier, encouraging news about Washington’s share of Trump’s $1.5 trillion infrastructure plan. “Under Trump’s budget, the $200 billion in federal funding will be taken from other programs that are cut or eliminated,” USA Today reported on February 11.

This pleased Robert Poole, the libertarian Reason Foundation’s transportation guru:

$200 billion over a decade averages $20 billion per year. That is 1.67% of the annual budget that includes national defense and all domestic programs other than entitlements. It’s absurd to imagine that somewhere in that $1.2 trillion there are not some items that are outdated, or have been shown to be ineffective, or are inherently state or local in nature, not federal.

Rather than hike gas taxes on commuters and professional drivers, President Trump should squeeze Washington for the $20 billion he needs annually to stimulate vital maintenance on America’s shabby roads and shaky bridges.

Deroy Murdock is a Manhattan-based Fox News contributor and a contributing editor of National Review Online.

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