Replacing The Current Gas Tax With A Different Gas Tax

AASHTO is pitching a replacement of the current fed excise fuel taxes with sales taxes - initially revenue neutral, but would increase with inflation, unlike stagnant excise taxes last increased in 1993. In 6 years, might raise an extra $43 billion.
October 17, 2010, 11am PDT | Irvin Dawid
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In a refreshing change from advocating for the popular "vehicle-miles-fee" replacement of the current federal gas tax funding mechanism for transportation, the American Association of State Highway and Transportation would simple adjust the current method to index it for inflation by converting it to a sales tax.

Initially, drivers would "pay an 8.4% tax on a gallon of gas instead of the current 18.4-cent tax. The tax on a gallon of diesel would be 10.6% instead of the current 24.4 cents."

"We think this has bipartisan potential," said John Horsley, AASHTO's executive director, who called the policy "revenue-neutral."

"Florida Rep. John Mica, the ranking Republican on the House Transportation and Infrastructure Committee, said that any proposal that would have Americans paying more at the pump would be a "non-starter." Mica would chair this committee if the Republicans take control of Congress after mid-term elections, as many polls suggest.

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Published on Thursday, October 14, 2010 in The Wall Street Journal - Business
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