Start hunting around your couch cushions for extra quarters, folks. You may need them soon. President Trump has reportedly endorsed the idea of raising the federal gas tax by 25 cents a gallon to help fund trillions of dollars’ worth of national infrastructure projects.
Trump’s supposed backing for this new fuel tax, currently at 18.4 cents a gallon, echoes an op-ed last month from Tom Donohue, president of the U.S. Chamber of Commerce (the country’s largest lobbying organization), which called for a five-cent-a-year increase over the next five years. Donohue pointed out that the fuel tax has not been raised in 25 years and said the funds could help revitalize the lagging construction industry — a major component of the Chamber’s membership.
Last week, when asked about Donohue’s op-ed, Transportation Secretary Elaine Chao said the fuel tax increase was “on the table,” but added that it would have a “very regressive effect” on low-income Americans. Indeed, one research firm estimates it would cost American consumers $71.6 billion a year. That hasn’t gone unnoticed: Dozens of conservative groups have come out against the tax, as have politicians on both sides of the aisle.
Now, cost aside, there is a potential environmental benefit to an increased gas tax: It could actually decrease gas use. An analysis by the policy group called Energy Innovation, which supports the growth of clean energy, estimates that higher gas prices would actually push 1.2 million people toward getting rid of their expensive gas-guzzlers and switching to electric vehicles. In the process, it would also cause consumers to use less fuel — 1.3 billion barrels of oil through the year 2050.
But that points to one of the major flaws in a gas tax: How much longer will we actually be using gas to fuel our vehicles? It certainly won’t be forever. The average American keeps her or his car on the road for a little longer than 11 years, and with the rapid improvements in electric-vehicle technologies we’re going to see a paradigm shift in what Americans drive over the next decade as those older cars age out of the system. Just about every major analysis — including one by OPEC itself — predicts a major increase in electric vehicle ownership worldwide by mid-century. You can’t keep funding infrastructure with a gas tax if fewer people are using gas. In fact, some experts propose replacing the fuel tax with a new kind of tax based on how many miles you drive each year.
Of course that brings us to the second flaw with gas taxes: asking consumers to foot the bill. The tax that really needs to be raised is the tax on fossil-fuel company profits. A report last year estimated that an astonishing 6.5 percent of the entire world’s Gross Domestic Project — $5.3 trillion in 2015 — goes toward subsidizing the fossil-fuel industry. Not only do these companies get drilling rights (usually on public land) at bargain-basement prices, their tax rates are way too low and they defer their environmental and health costs onto governments and people, who pay and pay and pay for the right of energy CEOs to make hundreds of millions of dollars a year.
And that’s the third flaw of gas taxes — they should go toward helping to build infrastructure, sure, but maybe not roads and bridges. Fuel taxes could do a heck of a lot more good if they were put toward getting us away from the fossil-fuel economy. We could use those funds to support clean-energy infrastructure, new renewable energy technologies and climate-change mitigation. Think of what we could do as a nation — and as a world — with a few billion extra dollars a year pointed in those directions.
Of course, the thought of President Trump proposing anything like that seems, at best, unlikely, especially since he already wants to slash federal funding for sustainable-energy research. Then again, maybe all he needs is the right person to whisper the idea in his ear. That seems to be where this gas-tax increase idea came from in the first place, after all.
Previously in The Revelator: