Time to Raise the Gas Tax..But By How Much?

Last week Toby Mack, president and CEO of AED, told a group of construction industry writers that it's time to raise the federal tax on a gallon of gasoline. And as much as no one seems to like a tax increase Mack is right and this tax increase is long overdue. As Mack pointed out the tax was originally set at 18.4 cents per gallon in 1983 -- and hasn't been raised since -- so the buying power it generates has declined when inflation is factored in (not to mention the improved gas mileage vehicles now get, which also reduces what the tax brings in). No wonder the feds don't have enough in the Highway Fund to repair the nation's infrastructure -- which by all accounts is in dismal shape. And while the new Congress might not have the stomach to raise the tax they need to look down the road and find the will to do it anyway. But how much should they raise it? The answer should be "as much as possible," but here are a couple of recommendations: Fred Barnes, executive editor of "The Weekly Standard" and a conservative journalist, advocates for a 10-15 cents per gallon increase. "What’s required to restore a great highway system is a hike of 10 to 15 cents in the gas tax," he wrote in an article titled Coercing People Out of Their Cars. "Sounds like a lot, doesn’t it? The gain—more and better highways, less congestion—makes the trade-off worthwhile." Read his full explanation here. A more drastic and better-sounding (to the construction industry anyway) increase was suggested by a blue ribbon panel, The Esquire Commission to Balance the Federal Budget in the November issue of Esquire magazine. Though probably a pie-in-the-sky suggestion, the commission recommends a gradual increase to $1.18 per gallon (a total increase of $1 per gallon) by 2020. Such an increase would generate $130 billion in revenue -- and guarantee steady road and highway construction work for the foreseeable future. To read about these and other results from Esquire's commission click here.

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