Good for Sens. Corker (R-TN) and Murphy (D-CT) for proposing a long overdue 12 cent increase in the federal gas tax that finances the highway trust fund. The 18.4 cent tax has been unchanged since 1993, despite the increased price of building materials, improved mileage, and more recently, reduction in miles driven.
Under the broad assumption that households and businesses want a decent transportation infrastructure, we demonstrably cannot support that with the current revenue stream. In fact, we have not been able to do so for years now, and Congress has patched the fund with transfers from general revenues.
So good for the Senators for being grownups about this. On the other hand, they seem to have some language in there about cutting some other taxes to get around Norquist’s “no-new-taxes” pledge. That’s unnecessary and counterproductive.
The predictable attacks all reference $164 billion over ten years, which is apparently what the proposal would raise. Every article I saw had that number in it and none had this number: 0.07%. That’s $164 billion as a share of GDP over the next decade. It’s less than one-half of 1% of GDP and it’s a) the proper context for such a number–what share of the income generated over the next decade should we spend on roads and transit?–and b) it sounds less scary because it is less scary.
How could it possibly be that the richest nation on earth can’t afford to devote less than 1% of output over the next decade to maintaining its public transportation infrastructure?
I’m going on CNBC at 2 to argue about this. One tough question, for which I don’t have much of an answer: given that this tax increase will not be in place in time to replenish the trust fund, which will need a new infusion in weeks if we want to avoid project delays, where can Congress find the money for this? Thankfully, a tax repatriation holiday seems to be off the table (it’s a gimmick that can’t pay for anything because it loses revenues). But that table is looking awfully bare.