White House signaling more support for federal gas tax increase

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The federal gasoline tax hasn’t seen an increase in decades, but that may change as the White House signals more support for a bill that would help fund President Trump’s $1 trillion infrastructure package.

Early next year, House legislators will have a chance to vote on a 7 cent gas tax hike which is expected to be part of an infrastructure bill, Trump’s economic advisor Gary Cohn told lawmakers last week, according to The Hill.

In May during an interview with Bloomberg News, Trump said that he’d consider a tax hike to help pay for roads, bridges and other related projects.

Lawmakers who oppose a federal gas tax hike, which hasn’t taken place since 1993, say it would further strain states that have already implemented fuel tax hikes.

“It’s like putting a band-aid on the problem,” Rep. Mario Diaz-Balart (R-Fla.), chairman of the Appropriations subcommittee on transportation, told The Hill last week.

Transportation and public works projects across the U.S. have been funded by the Highway Trust Fund at a rate of 18.4 cents per gallon of gasoline and 24.4 cents per gallon of diesel fuel. Those rates have remained unchanged since 1993.

However, steady improvements in vehicle fuel economy have resulted in less tax revenue for the fund which the Congressional Budget Office reports will be unable to bankroll further projects unless a solution is found to make up for its shrinking revenue stream.