Trump says he would consider raising gasoline tax

US President Donald Trump said he would consider increasing the federal gasoline tax as a way to help pay for infrastructure development during a May 1 interview. His press secretary quickly said this does not mean the president would support such a move.

US President Donald Trump said he would consider increasing the federal gasoline tax as a way to help pay for infrastructure development during a May 1 interview. His press secretary quickly said this does not mean the president would support such a move.

“He expressed that a group that had met with him expressed support with it, and that he, out of respect, would consider their request. That’s it. There was no endorsement of it or support for it,” Sean Spicer said during that day’s daily press briefing at the White House.

Spicer said Trump was expressing to Bloomberg News reporters what a trucking association’s officials had told him about their members’ growing difficulties in delivering goods and services as roads and bridges have deteriorated across the country.

The federal tax is 18.4¢/gal for gasoline, and 24.4¢/gal for diesel fuel. These use taxes were last increased in 1993, and are collected at the retail level. A portion of the proceeds go into the National Highway Trust Fund.

The American Petroleum Institute, which opposes other oil and gas tax increases, has been neutral in the past on increasing the two federal motor fuel taxes. Agriculture and other businesses that use high volumes of gasoline and diesel traditionally are against a federal tax increase, but a leading oil and gas observer has said that raising it has several advantages over a border adjustment tax and similar proposals for financing repairs of the nation’s highways and bridges.

“[It] has not been increased since 1993. If it were adjusted solely for changes in inflation since then, it would be higher by 75%. For example, an annual increase of 10¢/gal, or 40¢ over 4 years, would raise $300 billion over 10 years, even if you rebate the increase to the lowest 10% of wage earners,” Larry Goldstein, a former director and current board member of the Energy Policy Research Foundation Inc., noted in a March commentary.

“The rebate would address the central concerns that an increase in gasoline is regressive and harmful to the poor,” Goldstein said. “A higher gasoline tax would encourage conservation and reduce congestion. It would increase the relative competitiveness of alternative fuels. It would send a signal to consumers to factor in the higher future cost of gasoline when contemplating a purchase of a new vehicle, and would allow the market to drive fuel efficiency instead of regulations.”

He said, “Further, in the current economic climate, if the federal government doesn’t proceed with an increase in gasoline taxes, the states will fill the vacuum and raise their own gasoline taxes. In fact, several states have already announced substantial increases with little opposition.”

Contact Nick Snow at nicks@pennwell.com.

More in General Interest