The Note

Washington's Original and Most Influential Tipsheet

Rick Klein is ABC News' Senior Political Reporter and author of The Note's morning look at the upcoming day in politics. Throughout the day, ABC News' political team contributes to The Note with the very latest news and analysis from the nation's capital.

To email Rick Klein, click here.

MONTHLY ARCHIVES

July 2009
Sun Mon Tue Wed Thu Fri Sat
1 2 3 4
5 6 7 8 9 10 11
12 13 14 15 16 17 18
19 20 21 22 23 24 25
26 27 28 29 30 31

« Previous | Main | Next »

Momentum for Gas-Tax Hike?

January 02, 2009 10:58 AM

ABC News’ Rick Klein Reports: Raising taxes ranks among the last things smart Democrats want to do with their newfound control of Washington. Raising taxes on gasoline -- where low prices constitute one of the few perceived bright spots for a struggling nation -- is a surefire political loser.

Right?

Don’t look now -- but momentum is starting to build from influential corners for an increase to the federal tax on gasoline.

The rationale: With a crumbling road-and-bridge infrastructure, and widespread interest in investing in renewable energy initiatives, widening a reliable revenue stream is tempting.

The thinking is that drivers can afford to pay more than the current 18.4 cents a gallon federal tax on gasoline (the tax is 24.4 cents a gallon on diesel), now that gas prices are well beneath $2 a gallon again.

According to the Associated Press, the National Commission on Surface Transportation Infrastructure Financing -- created by Congress to analyze ways to pay for federal transportation initiatives -- will recommend this month an increase in the federal gas tax of about 10 cents a gallon, and slightly more for diesel.

Environmental groups have long called for a higher gas tax as well, though they would direct the money toward renewable energy initiatives.

Last week, New York Times columnist Tom Friedman called on President-elect Barack Obama to endorse a higher gas tax -- something he has shown no indication of doing so far.

“I believe the second biggest decision Barack Obama has to make -- the first is deciding the size of the stimulus -- is whether to increase the federal gasoline tax or impose an economy-wide carbon tax,” Friedman wrote.

“Best I can tell, the Obama team has no intention of doing either at this time. I understand why. Raising taxes in a recession is a no-no. But I've racked my brain trying to think of ways to retool America around clean-power technologies without a price signal -- i.e., a tax -- and there are no effective ones. Without a higher gas tax or carbon tax, Obama will lack the leverage to drive critical pieces of his foreign and domestic agendas.”

The question for Obama: Will he want to risk political capital on an initiative that figures to be widely unpopular -- and one that feeds Republican perceptions of tax-and-spend Democrats?

Obama has expressed concern about raising taxes during a time of economic duress, though the issue of a higher gas tax wasn’t front-and-center in the campaign.

Obama did, however, split with Sen. Hillary Rodham Clinton, D-N.Y., (and Sen. John McCain, R-Ariz.) during the Democratic primaries, on the issue of a gas-tax holiday. Clinton wanted to suspend the federal tax when gas prices were soaring last spring, but Obama derided the idea as a “gimmick.”

“People are more concerned about looking good for the cameras and for politics than they are at actually solving problems,” Obama said in May.

UPDATE: I spoke Friday afternoon with Adrian Moore, one of the commissioners whose report recommends an increase in the gas tax.

He provided some interesting perspective: First, the commission sees the gas tax as the best way to fund infrastructure projects only in the short term, until technological innovations can allow a more fair way to charge drivers based on the mileage they drive (and wear down roads) and when and where they’re driving.

Second, the commission is also recommending a major revamping in how projects get funded, based on actual need instead of political horse-trading. And third, the recommendation for a higher gas tax was developed over the summer -- back when drivers were routinely paying $4 a gallon for gasoline.

“I have a lot of trouble with raising the gas tax, because the way we spend the money is so messed up,” said Moore, who is vice president of research at the Reason Foundation, a libertarian think-tank.

“The political reality is that it’s going to be difficult, because people don’t trust the system [of funding infrastructure projects],” Moore said. “Raising the gas tax would be a big mistake if we don’t change the system, to get rid of the waste, the silliness, and the politicization of the funding process.”

January 2, 2009 | Permalink | Share | User Comments (185)

User Comments

Feed You can follow this conversation by subscribing to the comment feed for this post.

Sure, it's a smart thing to do.
Didn't Tom Friedman write about this very issue just a few weeks ago?

Posted by: Bill in NC | Jan 2, 2009 11:10:40 AM

I hope the Democrats do raise taxes on fuel. The American people will be outraged and kick them out in 2010. I see this as just the beginning of many taxes to come from Obama and his Dem buddies in congress.

We may not have the transparency Obama promised in government but taxes are always transparent when people have to pay them.

Posted by: James | Jan 2, 2009 11:29:38 AM

I sincerely doubt that the Obama and/or the Democrats will raise gasoline taxes... after all, these are the same people that recognized middle class America is disappearing and only the RICH Republicans are left. Perhaps, the rich Republicans are pushing for this because they don't know what to do with their money! There is a Republicans State Rep here in Illinois suggesting the state should raise the gas tax... You would think Republicans would be smarter now. They have lost big time - yet continue to be for the RICH!

Posted by: Sandi | Jan 2, 2009 11:38:55 AM

Politicians see gas prices lowering, thus helping the average American, and now want to raise the taxes on them. How about not giving hundreds of billions of dollars to their corporate buddies? That would help pay for infastructure projects. But no, the average American will get to foot yet another bill.

Posted by: i just love him soooo much | Jan 2, 2009 11:51:19 AM

Where are those true leaders who know that raising taxes does not solve problems!!?? For goodness sake! Can't we start electing creative thinkers who will make the tough choices and cut spending rather then have people cough up more money in taxes.

Just a reminder, if the gas taxes are raised, you can expect the price of gas to rise as well and this time, the federal government will have even more reason to not fight the higher cost. Their bottom line will depend on high gas prices (the tax is a percentage of the amount paid at the pump).

Posted by: Angry taxpayer | Jan 2, 2009 11:54:42 AM

This is one of those academic elitest ideas that does not work with the voters.

You mess with the voters gas prices and you are a short lived politician.

Sounds like elections of '94 are getting ready to happen again.

Posted by: donbl1 | Jan 2, 2009 11:57:47 AM

It is quite proper to use taxes to control behavior. If the gasoline tax were higher then maybe people would drive more fuel efficient cars and our dependency on foreign oil would decrease. Seems simple to me. Much like raising the tax on tobacco to discourage smoking.

Posted by: Jim | Jan 2, 2009 12:00:01 PM

Sandi: could you not manage to make your argument with real points, or maybe some facts? Really, what happened to you? Did a republican divorce you or something?

Posted by: steven | Jan 2, 2009 12:00:10 PM

On a related note, I am hoping that the Democrats have a filibuster proof Senate so they have no one to keep them from theirselves......

It is time to have to come through with the silliness of higher gas prices, card check for the unions and free health care for the 42% of Americans who already pay NO federal income taxes.

Please, give the Democrats complete reign.

Posted by: donbl1 | Jan 2, 2009 12:01:04 PM

Sandi - Stop with the fantasy that the Republicans are for the rich - it was a Republican administration that cut taxes for 95 percent of taxpayers (lowered them to pre-Clinton levels) and started funneling more money to neighborhood charities throughout the country. Take a look at Bush's faith-based initiatives spending - that money went straight to helping the poor - not the rich.


By the way, supporting businesses and helping them thrive is not the same as "being for the rich." When businesses are strong, people work. When businesses falter, people are forced out of work. Unless you want to see the US become a welfare state with more then 20 percent of the population on some type of federal assistance (very expensive by the way, it takes a lot of your tax dollars to support those people) the businesses must thrive so that people can work. That's just reality.

Posted by: Get over it | Jan 2, 2009 12:02:31 PM

There is a time for everything. A time to raise a gas tax and a time to have your brain re-installed. Lower gas prices are THE ONLY bright spot tax payers see. Lower gas means lower business costs for those small operators who relay on transportation.
Try to see it this way, instead of an opportunity to raise taxes it is a stimulus that just fell from heaven. Don't worry OPEC is sworn to take that small blessing away. A swift tax raise will be the gravy stain on Obama's tie that remains for the next 4 years.

Posted by: Thomas Delaney | Jan 2, 2009 12:08:17 PM

i will bet anyone here big $$ that there wont be a significant federal gas tax increase,at least not anytime soon . it could happen ,in a year or three perhaps but not until some rich peoples tax rates get increased ,which IS going to happen pdq ,thank god.

the whole idea of an increase in fuel taxes is just some republicans looking for some way/any way to deflect attention away from where the needed tax revenues REALLY need to come from,i.e. rich peoples overstuffed swiss bank accounts. the democrats arent stupid or greedy enough to play ball though so the whole republican bred idea is a perfect lead balloon from the start.

a gas tax affects the lower /middle class directly ,who were the big slice demographic that got obama (and the democrats) elected in the first place; any significant federal fuel tax increase would be seen by those voters as a stab in the back ,sure political suicide.

you really think obama and his staff are that naive? cmon...

Posted by: hah | Jan 2, 2009 12:10:23 PM

Jim - taxes are a way of controlling behavior? Since when is the government meant to control behavior? My politicians represent me - they are elected to work on behalf of their constituents and achieve the goals of their districts - they are not elected to find ways to control the behavior of the voters!.

by the way, if politicians really wanted to encourage people to drive less or use less gasoline, they would find ways to make it easier to avoid driving, not finding ways to make it harder for them to drive. Invest in trails, sidewalks, buses and trains, not roads. Educate people how they can convert their vehicles to alternative fuels or provide tax breaks or grants to fuel station owners to allow them to convert some of their tanks to alternative fuels (very expensive). Raising taxes is the easy way out and will not solve any problem or control behavior.

Posted by: Me | Jan 2, 2009 12:12:07 PM

Americans oppose tax increases at any time and for any reason. It doesn't matter if it's gas taxes, school millages or federal income taxes. This is because elected officials spend 100+% of their revenue, no matter how low or high it is. So raising taxes at any time for anything is a pointless exercise. If Congress would adopt real fiscal discipline, you'd get more willingness on the part of the American People for a tax increase, because they'd know it'd be used for something meaningful, not just endless pork.

Posted by: Will | Jan 2, 2009 12:13:58 PM

"It is quite proper to use taxes to control behavior."

Exactly, and this is why the founders made war with the British aristocracy; it seems that King George III was doing a lackluster job of "controlling our behavior".

The problem was contained while we still had cotton plantation slave masters to "control behavior". Then somehow, some right ring idiot started prating on about "human freedom" and from that point onward it's been all downhill.

We need goverment to control us lest government of the government; by the government; for the government shall perish from the earth.

Now how can we get the government to control our voting behavior lest we err in that regard too?

Posted by: Bruce Frykman, Elk River MN | Jan 2, 2009 12:16:20 PM

What a bunch of idiots...Raise gasoline tax and and watch the SEVERE ressesion prolong its self. Besides, theoryetically less auto's on the roads means less maintenance.

Posted by: cjcanu01 | Jan 2, 2009 12:20:27 PM

And so it begins....No one has ever taxed themselves to prosperity. If we want change, let's change back to Reagan's ideals of low taxes and less governmental interference. That worked before and will work again for us now. If we follow the high tax crowd, a whole lot of people will not be working very soon.

Posted by: Bubbler Dad | Jan 2, 2009 12:30:09 PM

Try taxing the heck out of big giant gas guzzlers instead of cutting middle class americans in two by charging us more money to drive our 10+-year-old fuel efficient Camrys et. al.

Posted by: Nianya | Jan 2, 2009 12:35:30 PM

Bubbler Dad: "No one has ever taxed themselves to prosperity. "

The gas tax - which is the same as a decade and a half ago while cement and steel costs have risen even faster than vehicle miles driven - does not bring in enough money to pay for maintenance of the roads. Do Republicans propose:

1. Tax income to pay for roads.
2. Tax some other non-related field to divert money to roads.
3. Allow the current road infrastructure to continue to decay.
4. Increase the gas tax to allow for continued maintenance of the US's road infrastructure.

Those are the choices. You can whine and pontificate about taxes, but I hope the adults in government deal with reality.

Posted by: jhw539 | Jan 2, 2009 12:37:31 PM

I am so glad Tom Friedman - and his ilk - are now here to save us all. You people who voted for "The One" are about to get what you asked for.

Posted by: TaxU | Jan 2, 2009 12:38:12 PM

Post a comment