Is cheaper gas an opening for higher gas taxes?

Scott Tong Dec 22, 2014
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Is cheaper gas an opening for higher gas taxes?

Scott Tong Dec 22, 2014
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Michigan has just put a new issue on the ballot for next year: hiking gas taxes. Many states in the last two years have raised or reformed gas taxes, including red states Wyoming and New Hampshire. And now low gas prices may provide additional political space to raise money for crumbling roads and bridges.

“There’s a little more room to maybe propose increases in the gas tax, because the price has gone down so far,” Norton Francis of the Urban Institute says. “But it really takes political will and leadership to tie the gas tax to infrastructure spending.”

Federal money is drying up, as the national gas tax has remained at 18.4 cents per gallon. And more fuel-sipping cars on the road mean Americans are buying less gas to tax. Thus the urgency.

“When we see pretty fiscally conservative governors in states like New Jersey and Wisconsin either openly talking about gas tax reforms or at least not ruling it out right away, that says a lot about how serious this issue is,” says Carl Davis of the Institute on Taxation and Economic Policy.

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