New Gas Tax Hike in Shuster's HTF Plan

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Posted by Mike Palicz on Tuesday, July 24th, 2018, 3:59 PM PERMALINK

Americans should not have to pay more at the pump because Washington can’t curb its spending addiction. At a time when Americans are just beginning to see the benefits of tax cuts, some members in Congress are eager to pry open taxpayer wallets to pay for their misuse of the Highway Trust Fund (HTF).

The U.S. could see its first federal gas tax hike since 1993 under Representative Bill Shuster’s (R-PA) new plan to fund the HTF. Shuster’s plan would raise the cost of gas for Americans by introducing a 15-cent gasoline tax increase, raising the current gas tax from 18.4 cents per gallon to 33.4 cents per gallon, indexed to inflation.

As ATR President Grover Norquist pointed out in a letter to Congress this year, rather than increasing gas taxes on consumers, Congress should focus its attention on using existing revenue more appropriately.

“A recent report by the Government Accountability Office (GAO) found that more than 50 percent of the HTF spending went to non-road-related projects, while 15 percent of federal gas tax revenue is diverted to the Mass Transit Account…”

Shuster’s plan would also raise the tax on diesel fuel by 20 cents and introduce a volunteer pilot program that would tax drivers on a per-mile traveled basis as a replacement to taxes on gasoline or diesel. This pilot program would serve as a test trial for replacing the gas tax in 2028 with a Vehicle Miles Traveled program.

The draft proposal also introduces a host of new taxes, including;

  • Electric Vehicle Battery Excise Tax - 10% tax on the wholesale price of electric batteries used to propel motor vehicles.
  • Diesel Tax on Passenger Trains - 4.3 cents per gallon tax on diesel used by passenger trains eligible for funding under certain federal public transportation programs.
  • Bicycle Tire Tax - 10% tax on the wholesale price of bike tires.
  • Floor Stocks Taxes - Imposes a floor stocks tax on certain fuels under limited circumstances.
     

You can view the full discussion draft of the plan here.

 

Photo Credit: Adobe Stock Photo

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