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U.S. Representative Earl Blumenauer (D-Ore.) along with leaders in the fields of transportation, labor, commerce and construction have introduced H.R. 3636, The Update, Promote, and Develop America's Transportation Essentials UPDATE) Act.
This bill would phase in a 15ct/gal tax increase over the next three years on gasoline and diesel. The increase would bring the federal fuel tax on gasoline from 18.4 cents to 33.4 cts/gal. If passed, this would be the first federal fuel tax increase since 1993.
"The gas tax hasn't been increased since the beginning of the Clinton administration," said Blumenauer. "Today, with inflation and increased fuel efficiency for vehicles, the average
motorist is paying about half as much per mile as they did in 1993. It's time for Congress to act. There's a broad and persuasive coalition that stands ready to support Congress, including the U.S. Chamber of Commerce, National AFL-CIO,
the construction and trucking industry, cyclists, professional groups, numerous associations of small and medium businesses, local governments, and transit agencies. We just need to give them something to support."
According to Edgar Ang, Oil Price Information Service, in 2009, the Federal Highway Administration estimated that over $70.9 billion worth of repairs were needed just to maintain safe infrastructure; that number has since increased the American Society of Civil Engineers estimates that surface transportation in the U.S. needs over $2 trillion of investment in order
to remain economically competitive.
Ang noted that in recent years, Congress has added to the General Fund deficit by transferring over $50 billion of General Fund revenue to the Highway Trust Fund in order to keep it afloat. In order to maintain current funding in the following years, the
Highway Trust Fund will need almost $15 billion a year in addition to current gas tax receipts. Continuing down the current path will mean a 30% drop in federal transportation spending by 2024. The UPDATE Act would raise around $170 billion over 10 years.
"Instituting a reasonable gas tax increase now provides the revenues Democrats say they want with a form of a user fee which historically has been acceptable to Republicans including Ronald Reagan, who increased the gas tax by a nickel a gallon in 1982," said Blumenauer. "Addressing the infrastructure deficit,
stabilizing transportation funding, and helping America's all-too-slow economic recovery is critical if we want a livable and economically prosperous country in the years to come."
What do you think? Is this a tax increase that makes sense?