After Republicans passed the largest tax cuts and reform in decades, special spending interests are pressuring them to squander their historic victory by raising the federal gas tax. The surefire way to facilitate a Democrat wave this November is for Republicans to impose a regressive tax on American consumers.
Since passing the Tax Cuts and Jobs Act, however, Republicans have gained on the generic ballot and erased much of the Democrats’ polling advantage, and a Politico/Morning Consult survey showed voters trust Republicans over Democrats 43-32 percent on the economy and 42-33 percent on jobs.
{mosads}This improvement is directly tied to the Republican tax cuts. Ninety percent of wage earners are receiving higher take-home pay. At least four million Americans have received special tax reform bonuses. Utility companies across the country are passing on their tax cut savings by slashing bills for millions more.
Hiking gas taxes would demolish the ability of Republicans to tout their historic tax cuts, leaving them unable to convince voters they deserve to maintain control of Congress.
The economic damage of a gas tax hike is highlighted by a study conducted by Strategas Research Partners. The study found 60 percent of the individual tax cut law savings for taxpayers in 2018 would be wiped out by a 25 cents per gallon tax hike and rising gas prices. The hike would amount to $350 billion, costing the average driver about $1,600 over ten years.
This would hit lower income households hardest because energy costs can regularly consume 10 percent or more of a low income household’s budget, compared to only 1-5 percent of middle-upper income households’ budgets
Gas tax hikes are politically dangerous. Congress has twice raised the federal gas tax since President Reagan. In 1990, President George H.W. Bush hiked gas taxes and lost re-election in 1992. In 1993, President Clinton and the Democrat controlled Congress hiked gas taxes and later faced utter defeat in the form of the Republican Revolution of 1994. Both gas tax hikes were immediately followed by political punishment for the politicians and parties that made them happen.
Acknowledging the saliency of political punishment for gas tax hikes, Speaker Paul Ryan stated the House would not be raising the gas tax.
Gas tax hikes are bad policy too. Tax proponents often argue that without more revenue, our roads and bridges will crumble.
The secret these tax proponents are hiding is that existing federal gas tax revenues are more than sufficient to fund our federal infrastructure needs. Federal gas tax funds are deposited into the Highway Trust Fund (HTF), created to fund repairs to the nation’s roads and bridges. However, this Fund bears more resemblance to a private slush fund for politicians than a fund to maintain and improve infrastructure.
Taxpayer abuses include $112,000 spent to construct a white squirrel sanctuary, $6 million for a boardwalk in Rehoboth Beach, Delaware, $900,000 to resurface a Los Angeles bike trail, and $1 million for a bus stop in Virginia. Funds are also consistently diverted to subsidize subways, trolley rides, ferry boats, junkyard removals, and other “projects” that wouldn’t receive approval in the normal appropriations process.
Additional funds are wasted on compliance with legislation with racist roots called Davis-Bacon, which was purposely designed by its authors to prevent African Americans from receiving construction jobs. Davis-Bacon is estimated to inflate highway project costs by 22 percent through requiring the federal government to pay above-market wages.
These abuses of gas tax revenues add up. A Government Accountability Office report found only fifty percent of federal HTF dollars are spent directly on roads and bridges, and only six percent of HTF dollars go towards major projects to construct, reconstruct, or rehabilitate roads or bridges.
Going forward, if these dollars were actually spent to repair roads and bridges, the Highway Trust Fund would be 98 percent solvent over the next decade without a single cent of additional gas tax revenue needed.
Many voters will decide if higher take home pay, lower utility prices, and a booming economy are sufficient to elect Republicans in November. Raising the gas tax would cripple Republicans arguments that they are the party of tax relief. Rather than obliterate the positive impacts of the tax cuts, Republicans must press Democrats to explain their opposition to tax relief to voters.
Tyler Tate is an associate at the nonprofit Americans for Tax Reform, a nonprofit group advocating for limited government in Washington, D.C.