Talk of gas tax increase sparks fear of political backlash

Lawmakers are quick to talk up a bipartisan infrastructure deal. Yet neither party wants to take the political risk of paying for it when all options are toxic — including the obvious choice of raising the national gas tax.

Increasing the gas tax is so politically fraught that it hasn’t been touched in 26 years and it didn’t even come up at a meeting at the White House on Tuesday between President Donald Trump, House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer to discuss an infrastructure plan.

While they agreed broadly on the need to upgrade roads, bridges and airports, they put off for three weeks the tougher conversation about coming up with ways to fund an estimated $2 trillion in public works.

U.S. taxes on fuel are among the lowest in the developed world, at 18.4 cents per gallon for gasoline and 24.4 cents per gallon for diesel, and infrastructure advocates see raising the levies for the first time since 1993 as the best short-term option to generate needed revenue.

Waiting for Trump

Still, a measure that would disproportionately affect poor and rural drivers raises opposition at all levels of the political spectrum. It’s also created strange bedfellows — aligning members of the conservative House Freedom Caucus and progressives such as Senator Elizabeth Warren, a Democratic presidential candidate.

“Working people who have got to get to their job, get their kid to a medical appointment, shouldn’t get hit again when multinationals are enjoying their big tax breaks and causing much of the wear and tear to the road,’’ said Ron Wyden of Oregon, the top Democrat on the Senate Finance Committee, who was at the meeting.

Some Democrats, including Wyden and Schumer, have said they’d only consider increasing the gas tax if it’s paired with a rollback of tax cuts that benefited the rich in the 2017 tax overhaul. The 2018 Senate Democratic infrastructure plan called for raising taxes on top earners and corporations.

Even though Trump campaigned on a promise to invest at least $1 trillion in infrastructure, the plan he released last year included only $200 billion over a decade — mostly in incentives to spur investments by states, localities and the private sector.

Democrats said after their meeting with Trump on Tuesday that he offered no plan for financing infrastructure projects and that they would wait for the White House to make its proposal in three weeks. Democrats also said Trump indicated he’s soured on a public-private approach.

The White House statement after the meeting made no mention of an amount or where the money would come from.

While Trump has said he’s eager to work with Congress on infrastructure, Democrats say Republicans won’t go along unless the president publicly endorses a plan — especially if it includes a tax increase.

Lawmakers who attended a closed-door meeting with Trump a year ago said he told them then that he’d support a 25-cent-pergallon increase in the gas tax and take the political heat. But Republican congressional leaders were opposed, and Trump never backed the idea publicly.

‘D-plus level’

Now Trump’s signaling that he’s unlikely to support a gas-tax increase. In a tweet last Friday, he said the fuel tax in California “is causing big problems on pricing for that state” and “speak to your governor about reducing.” California approved a 12-cent-pergallon increase in 2017 to help pay for road and bridge projects, and voters defeated a Republican-led ballot measure to repeal it last November.

Advocacy groups as diverse as the U.S. Chamber of Commerce, the AFL-CIO, the American Trucking Associations and others are advocating raising federal fuel taxes as the only realistic way in the short term to generate the funding needed to address upgrades to public works from a “D-plus’’ level that the American Society of Engineers has estimated would cost $2 trillion.

Still, a gas tax increase wouldn’t solve the problem. The Tax Foundation estimates that even raising the gas tax to 50 cents per gallon and indexing it to inflation would only generate about $306 billion over a decade. That means lawmakers would have to agree on a whole package of tax measures — which is unlikely following the passage of Trump’s tax overhaul.

“Democrats are interested in raising income and corporate tax rates, but Republicans are not interested in unraveling their big signature achievement,” said Marc Gerson, a former House Ways and Means Committee aide. “There is no agreement.”