Gas tax debate heats up

by Wes Vernon
Washington Correspondent
National Corridors Initiative

House Transportation and Infrastructure Committee Chairman Don Young’s proposal to hike gas taxes is running up against determined resistance in his own Republican ranks.

Reports persist that the House leadership plans to introduce a much less expensive alternative to the Alaska Republican’s $375 billion highway and transit proposal, which itself has not yet been formally introduced.

Some of the younger lawmakers are not waiting for the leadership to weigh in with a scaled down package.

Rep. Jeff Flake, an Arizona Republican, says forget about raising the gas tax. He thinks it’s time to cut it.

“The gas tax was imposed over 50 years ago to build the interstate highway system,” the Congressman said. He added, “Last time I checked, we finished building the interstate highway system years ago, but the tax continues to increase. This makes no sense at all.

“Why send this extra money to Washington in the first place?” he asks.

Since the Highway Trust Fund was established, it has been opened up to mass transit – but with Amtrak excluded – and the Young plan, according to the American Public Transportation Assn. (APTA), would net mass transit systems about 20 percent of the take, the rest going to highways.

(This writer’s perspective on the gas tax proposal, the ratio of highways and transit, and the exclusion of Amtrak was laid out in the Opinion section of last week’s (March 24) Destination Freedom.

So severe has been the criticism that Young and the ranking Democrat on his committee, Minnesota’s James Oberstar, wrote a letter to the editors of The Wall Street Journal, which earlier had referred to the six-year, $375 billion proposal as a “Porky Pig” plan.

“Highway funding comes from the Highway Trust Fund,” Young and Oberstar argue, “The revenues are dedicated solely for highway and transit programs. Not a single penny of this increased highway and transit funding would come from the general treasury...”

Ross Capon of the National Association of Railroad Passengers (NARP) said that’s not the whole story.

In an e-mail to Destination Freedom, Capon wrote, “In terms of the federal program, Chairman Young is generally correct if we do not consider externality costs (e.g. such as impact of pollution and social costs of creating a system that does not serve a growing number of people who do not drive). Most use of non-user funds comes at the lower levels of government.”

The NARP executive director then cited the 2000 Table of Highway Statistics, which reads as follows:

“Partially offsetting the above,” added Capon, “it appears that $8.2 billion in highway user payments went to non-transportation purposes; $8.3 billion to mass transit.”

The passenger train advocate’s bottom line: “However, NARP has always argued that the biggest subsidy of all is having the government recognize all air ticket tax payments as votes for more aviation investment (big fight required just to get occasional use for landside transportation improvements at airports) and most gasoline tax payments as votes for more highway spending. Irrespective of what the user might want and of what investments would best help create a sustainable transportation system.”

In addition to the letter to the Journal, Young defended against criticism of his plan by putting out a press release claiming the measure would create 1.3 million new jobs all across America. Further, he said, one should factor in the “congestion crisis” which the lawmaker claims is costing the U.S. $67 billion each year, with an average cost per commuter of $1,160 a year, and that “drivers now waste an average of 62 hours per year stuck in traffic jams.”

This gets back to the old question: Who or what creates the longest lasting wealth – government or the private sector? Two schools of thought are playing out here on a smaller scale than in the overall tax debate.

The Young-Oberstar idea of creating new jobs by pouring taxpayer revenues into more public works projects has been called “priming the pump.”

The House leadership is more inclined to keep taxes as low possible as a better road to creating new jobs through stepped up investment and a resultant improved economy.

Here is how the politics of the gas tax works in the current Congress:

Supporters of President Bush’s overall tax cut package would consider themselves vulnerable to charges of hypocrisy if they end up cheerleading the way for a gas tax hike, i.e. cutting taxes through the front door and raising them through the back door. Rightly or wrongly, many of them see this as a political liability. The fact that a gas tax is a more targeted means of raising revenue, they fear, would get lost in the heated rhetoric of a future campaign.

Even with so powerful an “old bull” as Young pushing for it, getting it through is going to be a daunting task for those who believe the tax hike is sorely needed.

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Used by Permission
Copyright 2003, NCI, Inc.
Reprint from Destination Freedom, Vol. 4, No. 11.