Gas Is Cheap, But Will Taxes Go Up To Fund Highway Repairs?

Jan 21, 2015 10:00 AM EST | Jordan Ecarma

Gas prices are bottoming out nationwide, influencing consumers to purchase more trucks and other fuel-guzzling options. Some politicians and analysts see the drop in crude oil costs that is resulting in cheaper fuel as a golden opportunity to impose a higher tax on gas without hurting the average American consumer too much.

Congress hasn't raised the gas tax in 22 years; back when the per-gallon levy increased to 18.4 cents, the typical price at the pump was $1 a gallon, according to Politico. The tax was put in place so the Federal Highway Trust Fund could maintain America's roads and bridges, but that money has nearly run out since the gas tax hasn't moved in more than two decades.

While the recent Republican takeover makes a tax hike far less likely, lawmakers on both sides of the aisle have pointed to a gas tax increase as a way to repair a crumbling road and bridge infrastructure.

Republican John Thune of South Dakota, chairman of the Senate Commerce, Science, and Transportation Committee, has said that increasing the federal gas tax is an option to refill the Federal Highway Trust Fund.

If the tax is raised by 15 cents, the levy will bring in around $170 billion in the next decade, Rep. Earl Blumenauer, D-Ore., proposed last month.

Columnist Charles Krauthammer has endorsed the possible tax increase as well, saying the tax on gas should rise by $1; however, the cost increase as outlined in his proposal would be mitigated by a reduction in the Social Security tax. The average American that buys 12 gallons of gas per week should see a $12-a-week reduction in FICA taxes, Krauthammer wrote earlier this month.

Either way, lawmakers are working against a May deadline. As it brings in less revenue due to cheaper gas, the Federal Highway Trust Fund is expected to run out of money and come up $100 billion short for highway and transit funding in the next five years.

If you ask the average voter whether taxes should be raised, you'll probably get a negative response. A recent poll of New Jersey residents found that 68 percent opposed a gas tax hike to fund highway projects, with only 28 percent supporting the increase.

The national average price of gas was $2.05 as of this writing, according to the AAA's Daily Fuel Gauge Report

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