When it comes to raising the gas tax, Congress may have turned a corner. Or at least that appears to be the case in the Senate.
Sens. Christopher Murphy (D-Conn.) and Bob Corker (R-Tenn.) are proposing a 12-cent increase in the federal gas tax to help fund the next multiyear highway bill, and both believe they have enough support in the Senate to get a measure passed. The move would generate $164 billion over 10 years.
According to Murphy, reaction on the Democratic side has been positive, but Corker is still unsure on how his fellow Republicans will receive the proposal. The move would not violate the Americans for Tax Reform pledge if it is paired with a provision making some tax breaks that are typically part of the tax extenders package permanent. Those tax breaks are: research and development credit; Section 179 expensing; tax break encouraging small businesses to business equipment; deduction of state and local taxes; a deduction of up to $250 in classroom expenses that teachers paid for on their own; a subsidy for mass transit; and benefits given for land donated for conservation purposes.
The gas-tax increase plan likely would not be acted on until after the November elections, and it also indexes the gas tax to inflation. In the meantime, Murphy and Corker see some sort of an extension of MAP-21 funding.
“This new proposal is welcome news, considering that Washington’s prior inability to address the long-term funding needs of our aging highway and transit network has not only made it increasingly difficult for state officials to maintain and expand their existing transportation systems, it has also made it difficult for them to meet debt payments,” said Stephen Sandherr, CEO of the Associated General Contractors of America.