Report calls for higher gasoline tax

Janet Babin Jan 15, 2008
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Report calls for higher gasoline tax

Janet Babin Jan 15, 2008
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BOB MOON: Given that the high cost of gasoline figured very prominently into those inflation numbers today, and especially with pump prices already hovering around 3 bucks a gallon, this might not have been the most opportune moment to suggest the federal gas tax needs to go up. But somebody’s got to foot the bill to fix our aging bridges and roads. And the tab could be up to 40 cents a gallon. Marketplace’s Janet Babin reports from North Carolina Public Radio:


JANET BABIN: The gas tax hasn’t gone up since 1993. And with the economy on the skids, some argue that now’s not the time to raise it.

Matt Gardner is with the Institute on Taxation and Economic Policy.

Matt Gardner: Without a doubt we know that low- and middle-income people are going to get hit hardest by this.

That’s because a gas tax takes a larger percentage of a low-income family’s salary than it does from the rich. But a bipartisan commission set up by Congress says we need the money to fix aging infrastructure.

Tom Skancke is one of the 12 commission members.

Tom Skancke: A lot of us have known for a number of years that the system that we have is deteriorating. We have not made the investments that we need to maintain our system.

Skancke and the majority on the commission are calling for a gas-tax hike of about 5 to 8 cents per gallon over five years. They also want to boost surface transportation investment to $225 billion annually for 50 years. But three of the panel members dissented.

Cornell University Professor Rick Geddes was one of them. He says the gas-tax increase goes against Bush administration energy policy.

Rick Geddes: We’re trying to increase fuel efficiency, discourage gas consumption, and to try to increase the reliance on the gas tax as a revenue source, is in conflict with the energy policy of trying to reduce the consumption of that good which is taxed.

The House holds a hearing on the report later this week, and a Senate Committee will review it next week.

I’m Janet Babin for Marketplace.

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