As Gas Prices Drop, Gas Taxes Will Likely Rise
Policy + Politics

As Gas Prices Drop, Gas Taxes Will Likely Rise

Plummeting prices at the pump may leave lawmakers the room they need to hike taxes on gasoline for the first time in more than 20 years – and on Sunday a key Republican senator refused to rule it out as a method of assuring funding for federal highways. 

“I don’t favor increasing any tax…but I think we have to look at all the options,” Sen. John Thune (R-SD) told Fox News Sunday host Chris Wallace in response to a direct question about raising gas taxes while the price is below $2.50 per gallon.


The incoming GOP majority in the Senate has been busy setting expectations high with regard to its members’ willingness to put aside partisan politics in favor of governing. A move to consider funding highway infrastructure spending by raising the federal gas tax – a move that can be credibly called a “user fee” – would demonstrate a real willingness to take political risks in order to achieve a public good.

Related: McConnell Previews GOP Agenda of Compromise, Confrontation 

The federal gasoline tax is 18.4 cents per gallon, and has been since 1993 without being indexed for inflation. The main reason the tax has held steady is the political cost of an increase in the cost of a commodity that a vast number of Americans buy on a regular basis. 

However, the failure to index the tax to inflation means that the revenue it brings in covers less and less of the costs associated with maintaining and upgrading the U.S. highway system. Add to that the fact that the legislation providing money for the Highway Trust Fund expires in May, and it’s easy to see why some lawmakers believe it’s time to drag the federal gas tax into the modern day. 

“We obviously have a big delta that we have to meet,” said Thune, who is expected to chair the Senate Commerce Committee in the 114th Congress. “The highway bill expires at the end of May and there’s about a $100 million shortfall over what it would take to fund the highway trust fund at the current level of operations. So obviously we’ve got stuff to deal with here.” 

Wallace pointed out that Tennessee Republican Sen. Bob Corker, who was appearing with Thune on the same segment, had been a vocal proponent of phasing in a 12-cent per gallon tax increase. 

Related: Government Leadership Is Now Top Concern: Gallup 

Corker, who has taken criticism from the right for willingness to increase the tax, jumped into the conversation. 

“We have proposed raising the gasoline tax user fee by 12 cents, also by offsetting other taxes that Americans would pay,” Corker said. “So it’s revenue neutral, but at least it would put our infrastructure on strong footing.” He also said the revenue neutrality of his proposal “seems to get left out of the conversation.” 

Thune said no decisions have yet been made about how the highway trust fund will be financed, but made it clear that he considers getting it done an essential element of his 2015 agenda. 

“We appreciate the fact that we’ve got solutions that are being put forward,” he said, referring to Corker’s proposal. “I don’t think we take anything off the table at this point. I think it’s important to recognize we have a problem and issue that we need a solution for and we need to look at all the possible ways out there that we can address the problem.”

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