The federal gas tax, which is not tied to inflation, was last increased in 1993. The current rates are 18.4 cents per gallon for gasoline and 24.4 cents per gallon for diesel. The federal gas tax is primarily used to fund the Highway Trust Fund and Leaking Underground Storage Tank Fund. However, that soon may change. As President Trump seeks to broker a deal on a new infrastructure bill, the issue of funding the measure has become a topic of discussion, and the federal gas tax is now on the table. Reports indicate Trump is willing to entertain an increase as large as 50 cents per gallon. President Obama suggested taxing crude oil at $10-barrel during his administration but was unsuccessful. This time the suggestion may become a reality.While President Trump is open to an increase, the GOP is split. Conservative groups, such as the Americans for Prosperity and Freedom Partners, oppose the measure claiming it disproportionately impacts lower income individuals. Other Republicans, such as Senator Mike Rounds of South Dakota, are “still open to it.” The U.S. Chamber of Commerce, America’s largest business lobby, is proposing its own 25 cent increase to the federal gas tax. As Republicans and Democrats continue to duke it out over funding the government the transportation industry must stay on high alert. Those in the industry would be best to start discussing and planning for the effects of an increase now to avoid being caught off guard in the coming months. For additional information, see GOP Leaders Reject Gas Tax Increase After Trump Thwarts the Idea; The Washington Post, January 10, 2018.
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