Bipartisan Group of Lawmakers Floats Gas Tax Hike to Pay for Infrastructure
A bipartisan group of centrist House lawmakers on Friday proposed raising the gas tax as one possible way to pay for a large-scale infrastructure spending package.
In a new report, the 58-member House Problem Solvers Caucus proposes indexing fuel taxes to inflation, highway construction costs, fuel economy standards or some combination of the three. The report also lays out a number of other revenue-raising options, including a tax on vehicle miles traveled (VMT), which would raise revenue from drivers of electric vehicles as well.
Other funding ideas in the report include stepped-up Internal Revenue Service enforcement to cut down on tax avoidance, a national infrastructure bank, annual registration fees for electric vehicles and user fees for freight trucks.
A gas tax hike still looks unlikely: Congress hasn’t raised the gas tax of 18.4 cents a gallon since 1993 — and it doesn’t appear likely to do so now. A number of key parties in the infrastructure debate, including President Joe Biden, have already come out against the idea, arguing that it would disproportionately hit lower-income Americans.
White House Press Secretary Jen Psaki earlier this month said that even a large increase in the gas tax would only cover a fraction of the infrastructure spending needed and that Biden “does not believe that paying for this historic investment in rebuilding our nation’s infrastructure and creating millions of jobs should be on the backs of Americans.” Biden has pledged not to raise taxes on people making under $400,000 a year and has proposed raising corporate taxes to help pay for his infrastructure proposals.
Sen. Joe Manchin (D-WV) this week told reporters he was opposed to a gas tax hike. "Hell no, don't raise them," he said on Wednesday. "I got people that have to drive a long way to make a living. That just makes it harder on the working person. That's not the way to do it."
Senate Republicans who outlined their own $568 infrastructure plan Thursday also don’t support raising the gas tax.
In an indication of just how sensitive the topic is, the Problem Solvers Caucus itself emphasized Friday that it hadn’t endorsed a gas tax increase, or any particular revenue-raising ideas, and had only laid out some options. Rep. Josh Gottheimer (D-NJ), a leader of the group, added that he personally is against raising the gas tax. “Instead, I support pay-for measures like closing the $1-trillion-a-year tax gap, which goes after tax cheats, and boosting public-private partnerships,” he tweeted.
#text_div5948, #text_div5948 div { line-height: 140% !important; };
Democrats Push for Permanent Changes to Unemployment System
The Covid-19 pandemic has exposed serious flaws in the U.S. unemployment insurance system, as states struggled to quickly deliver enhanced benefits to millions of workers who lost their jobs. Now, a group of Democratic lawmakers are asking the White House to push for permanent changes to the system as part of a spending package expected to be announced next week.
The Wall Street Journal’s Andrew Duehren and Andrew Restuccia report:
“In a letter sent to the White House Friday, nearly 40 Democrats said President Biden should propose implementing a series of new federal standards of unemployment insurance programs, which are largely run by states. They proposed increasing the amount of jobless payments, extending the duration of the weekly benefit, expanding the pool of eligible workers, and implementing a system that would more closely tie the payments to economic conditions.”
Democratic Sens. Ron Wyden (OR) and Michael Bennet (CO) last week introduced legislation to raise base jobless benefits, create a permanent aid program for self-employed and gig workers, minimize differences between state programs and tie extended benefits to the unemployment rate.
#text_div5951, #text_div5951 div { line-height: 140% !important; };
Number of the Day: 29 Million
The Internal Revenue Service has a backlog of more than 29 million tax returns being held for manual processing, according to a blog post by National Taxpayer Advocate Erin Collins, who explains that the particular challenges of this tax season — including the added complexity caused by the Covid “stimulus checks” and rebate credits — made manual reconciliation of returns necessary and slowed down processing times. The backlog also includes 5.3 million paper returns for 2019 and 2020, 4.7 million individual returns with issues requiring responses from the filers and 11 million business and other returns.
The delayed returns have contributed to a more than 300% increase in the number of calls to IRS helplines, but as of April 10, only 2% of the roughly 70 million calls to the line for assistance with form 1040 have gotten through to a live person.
Collins says that the delays this year “have been largely unavoidable,” but calls for the IRS to be more transparent about the status of refunds.
She adds that providing more money for the agency could also make a difference: “If the IRS had adequate funding for its computer systems, it could provide a robust online account with an ability to update the status of IRS reviews in real time and the anticipated payment date of the refund. Additionally, adequate resources would allow the IRS to upgrade its telephone systems to provide a customer callback feature, so taxpayers don’t have to endure long hold times and low levels of service.”
#text_div5950, #text_div5950 div { line-height: 140% !important; };
Send your feedback to yrosenberg@thefiscaltimes.com. Follow us on Twitter: @yuvalrosenberg, @mdrainey and @TheFiscalTimes. And please tell your friends they can sign up here for their own copy of this newsletter.
#text_div5939, #text_div5939 div { line-height: 150% !important; };
News
#text_div5938, #text_div5938 div { line-height: 150% !important; };
- Democrats Unimpressed by GOP’s $568 Billion Infrastructure Plan – Roll Call
- Democrats Divided Over GOP Infrastructure Offer – The Hill
- Biden Aims at Top 0.3% With Bid to Tax Capital Like Wages – Bloomberg
- Rich Americans Face Biden Tax Hike With Anger, Denial and Grief – Bloomberg
- Urgent Capitol Security Needs Put Spotlight on ‘Sleepy’ Spending Bill – Roll Call
- As Economy Spikes, Republicans Are Still Waiting for the ‘Biden Depression’ That Trump Predicted – Washington Post
- CDC Panel Endorses Use of Johnson & Johnson Covid-19 Vaccine – Politico
- ‘Excess Deaths’ in 2020 Surpassed Those of 1918 Flu Pandemic – New York Times
- COVID-19 Hospitalizations Among Older Americans Plunge More Than 70 Percent – The Hill
- Ron Johnson Questions 'Big Push' to Vaccinate 'Everybody' – The Hill
- A $16 Billion Grant Fund for Live-Event Businesses Will Open on Saturday – New York Times
- Wall Street’s Trillion-Dollar ESG Club Comes With Huge Tax Perks – Bloomberg
- Biden Remains Committed to Finding Neera Tanden an Administration Job, Psaki Says – Washington Post
#text_div5937, #text_div5937 div { line-height: 150% !important; };
Views and Analysis
#text_div5940, #text_div5940 div { line-height: 150% !important; };
- Biden’s Plan for Tax Hikes on the Rich Is Good. But It Doesn’t Go Far Enough. – Paul Waldman, Washington Post
- Biden Wants to Hike the Capital Gains Tax. The Wealthy Will Fight Him to the Death – Michael Hiltzik, Los Angeles Times
- Shock at Biden Capital-Gains Tax Plan Looks Staged – Richard Beales, Reuters Breakingviews
- A 43.4% Capital Gains Tax? – Wall Street Journal Editorial Board
- Capital Gains Tax Hike Would Imperil Active Mutual Funds – Nir Kaissar, Bloomberg
- The Problem(s) With the Republicans' Offer on Infrastructure – Steve Benen, MSNBC
- End Welfare as We Know It — for the Upper Middle Class – Richard V. Reeves and Christopher Pulliam, Washington Post
- The Myth of the Middle-Class SALT Cap Victim – Justin Fox, Bloomberg
- Biden Has an Opportunity to Ensure an FDR-Like Legacy, and He Might Blow It – Catherine Rampell, Washington Post
- Biden Isn’t FDR. He’s the Anti-Reagan. – Nick Bryant, Washington Post
- Long-Term Care Needs a Long-Term Solution – Washington Post Editorial Board
- Getting Real About Coal and Climate – Paul Krugman, New York Times
- Why I Support Reparations — and All Conservatives Should – Gary Abernathy, Washington Post
- Biden Scores Record High Approval Rating Among Young Voters, According to New Poll – Jacqueline Alemany, Washington Post
- Can We Learn to Live With Germs Again? – Markham Heid, New York Times
#text_div5941, #text_div5941 div { line-height: 150% !important; };