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Another Call for Raising Fuel Taxes

June 18, 2014

By Oliver Patton

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Amid warnings about a looming cutoff in highway funding, two Senators are proposing an old-fashioned fix: raise the federal fuel tax.

Sens. Chris Murphy, D-Conn., and Bob Corker, R-Tenn., proposed raising gasoline and diesel taxes six cents a year for two years, then indexing them to the Consumer Price Index.

They said this would produce enough money to cover current highway spending for 10 years and replace the buying power that has been lost since the levies were last raised in 1993.

Their plan includes offsets designed to relieve the higher tax burden on motorists and businesses.

They suggest permanently extending some tax breaks, creating an estimated $190 billion in tax relief over the next decade. An alternative might be to reduce other taxes by the amount the fuel tax hike raises, they said.

The proposal drew support from American Trucking Associations and others who see fuel taxes as the most effective and efficient solution to the funding problem.

Among the cheerleaders was Sen. Tom Carper, D-Del., who supports a fuel tax hike as the best way to save the Highway Trust Fund.

“Multiple bailouts of the Highway Trust Fund have added more than $54 billion to our nation’s debt since 2009,” Carper said. 

“I still believe that re-establishing the purchasing power of the fuel tax is the best policy for funding our federal transportation program. I am glad to see that this idea is gaining more bipartisan support as Congress continues to grapple with the need to shore up the Highway Trust Fund before it becomes insolvent this summer.”

The Fund is on track to run dry by August, if not before, according to the Department of Transportation.

Meanwhile, Sen. Ron Wyden, D-Ore., is pushing an alternative approach. He wants a six-month patch to create breathing room for negotiations on a long-term bill.

Wyden, who chairs the Finance Committee that has responsibility for the issue, said he supports the idea of finding $10 billion to get the Trust Fund into next year.

He has not said where the $10 billion would come from.

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