October 1, 2018

Politico: Morning Tax

media mention

Today also marks 25 years since the last federal gas tax increase, which was raised to its current 18.3 cents per gallon in 1993. Plenty of people have talked about hiking the gas tax again over the last quarter-century — even potentially President Donald Trump — without much success, as Republicans have largely opposed the idea. The liberal Institute on Taxation and Economic Policy observed the anniversary by noting that the 25 years without an increase is the longest period since the federal gas tax went into effect in 1932, and argued that both more robust fuel efficiency and inflation within the construction sector have reduced the tax’s effectiveness.

“Taken together, these two factors have reduced the purchasing power of the 18.3 cent gasoline tax by 64 percent. To make up lost ground, the rate today would need to increase by nearly 33 cents, to 50.8 cents per gallon,” Carl Davis wrote. Read more