Proposed Tax Hike Increases Gas Prices 15 Cents a Gallon

The price of gas may be on the rise again, but this time everyone will know why: the federal gas tax will nearly double if one Congressman’s proposal passes.

Rep. Earl Blumenauer (D-Ore.) is pushing a bill in the House of Representatives to raise the tax 15 cents per gallon to 33.4 cents per gallon on gas and 42.8 cents per gallon of diesel.

The 15 cents would be phased in five-cent increments during the next three years and add $170 billion during the next 10 years, he said.

“Every credible independent report indicates that we are not meeting the demands of our stressed and decaying infrastructure system – roads, bridges and transit,” Blumenauer said in a recent press conference.

Sadly, that increase may not be enough.

The American Society of Civil Engineers concluded last month that a $2.7 trillion investment in transportation and other infrastructure is needed by 2020 if the United States is to remain competitive in the global marketplace.

Three years ago, the Federal Highway Administration estimated that more than $70.9 billion worth of repairs were needed to maintain safe infrastructure.

“The country desperately needs additional funding for infrastructure and, for the moment, there is no better means than the fuel tax,” said Kathleen Bower, AAA’s vice president of public affairs. “The proposed increase is well overdue and in line with what most experts suggest would be appropriate.”

If passed, it would be the first increase since 1993. Blumenauer notes that the state of bridges and highways around the country is deplorable and the lack of money in the Highway Trust Fund, into which the tax revenue flows, has suffered because the tax has not kept pace with inflation and improvements in vehicle fuel economy have reduced consumption, further lowering the amount collected.

(Images of the new Mustang convertible leaked. For more, Click Here.)

“With inflation and increased fuel efficiency, especially for some types of vehicles, there is no longer a good relationship between what road users pay and how much they benefit. The average motorist is paying about half as much per mile as they did in 1993,” Blumenauer said.

He also notes that Congress has transferred $55 billion from the General Fund into the transportation coffers, which only increases the federal deficit. To keep funding at its current level Congress will need to keep moving $15 billion annually into the transportation budget.

(Click Here to see why Chevy is not leaving Europe entirely.)

No one likes more taxes, but there are plenty of organizations supporting the idea, including the U.S. Chamber of Commerce, United Parcel Service, the Amalgamated Transit Union, Associated General Contractors of America and the American Society of Civil Engineers.

“Our transportation system is critical to our economy, and Americans value their mobility,” Bower said. “There are no easy answers, and no way to avoid the need for investment. Asking Americans to pay more is not easy, but it’s the right thing to do for the country.”