The national gas tax is 18.4 cents per gallon for gasoline and 24.4 cents per gallon for diesel fuel. A recent U.S. Chamber of Commerce proposal seeks to more than double this tax. The Editorial Board believes this would greatly benefit the U.S. economy.
The proposal, which seeks to raise the gas tax by 5 cents per year in the next five years, could help President Trump accomplish his goal of passing an infrastructure bill, which he had hoped to accomplish within his first 100 days in office.
There is no question that the U.S. needs to fix its crumbling infrastructure. The American Society of Civil Engineers gave the U.S. an overall D+ infrastructure rating and estimates failing to close the infrastructure investment gap will result in $3.9 trillion in losses to the U.S. gross domestic product and 2.5 million lost jobs by 2025.
“Delays caused by traffic congestion alone cost the economy over $120 billion per year,” says Henry Petroski in an article for the Council of Foreign Relations, and everything from asphalt-hauling robots and anarchist groups to phallically-inclined graffiti artists are drawing attention to the government's inability to keep American roads safe and repaired.
Underinvestment in the transportation sector also disproportionately affects disadvantaged communities, costing the average U.S. household $3,400 annually. In Indiana, the ASCE estimates driving on damaged roads costs each Hoosier driver $272 per year and that 8 percent of Indiana bridges are structurally deficient.
In a Jan. 18 speech to the chamber, Thomas Donohue, president and CEO of the U.S. Chamber of Commerce, said the proposed gas tax increase would raise $394 billion over the next 10 years.
Donohue also emphasized the importance of broad immigration reform to supply the workforce necessary to make these infrastructure improvements.
"Nearly 80 percent of construction firms report that they are having a hard time finding qualified workers,” Dononhue said to the chamber. He then suggested the nearly 100,000 Deferred Action for Childhood Arrivals and Temporary Protected Status beneficiaries in the construction industry offer a clear solution.
And investments in infrastructure go beyond just roads, with better rural broadband internet, cleaner public parks and the replacement of decades-old lead-lined water pipes all being potential outcomes of increased infrastructure spending.
While the proposed gas tax will likely be beneficial to the average American, better solutions exist. The U.S. government could instead lower the defense budget, which is currently larger than the next eight nations combined — a staggeringly high $824.6 billion.
It could pass criminal justice reforms to dramatically lower the U.S. incarceration rate, also the highest in the world, which currently generates $10 of social costs for every one dollar spent on correction costs, aggregating to an estimated $1 trillion annually.
All-payer or single-payer health insurance systems could also dramatically reduce the $3.3 trillion the U.S. spent on healthcare in 2016, nearly twice as much as other advanced industrialized countries.
Even a mere 40 percent tax rate limited to just the 115,000 households in the top 0.1 percent of earners — who own 20 percent of the nation's household wealth — “would produce $55 billion in extra revenue in its first year,” writes Patricia Cohen for the New York Times.
Regardless of how it is funded, a large investment in U.S. infrastructure will put money back into the average American wallet. Donohue admits the gas tax isn't "a panacea," but it is a big step forward for a nation that, until now, has been falling behind. If a gas tax will make this investment possible, it shall have the Editorial Board’s support.
