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Some Transportation Funding Gimmicks Are Worse than Others

Carl Davis of the Institute on Taxation and Economic Policy wants a gas tax increase, not gimmicks, to fund the 6-year transportation bill. Not likely. As bad as they are, they are better than resorting to a repatriation tax, notes the press release.
November 23, 2015, 7am PST | Irvin Dawid
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"(D)espite an abundance of voices urging action—including businesses, labor unions, civil engineers, [road builders], truckers, and even AAA—Congress is continuing its long-running opposition to a gas tax increase," writes Carl Davis, Research Director at Institute on Taxation and Economic Policy, "a non-profit, non-partisan research organization that works on federal, state, and local tax policy issues."

Rather than update our gas tax rate, Congress is hoping to cobble together a few years’ worth of funding by shuffling around money paid by airline passengers, selling off millions of barrels of oil from the Strategic Petroleum Reserve, and spending Customs “user fees” on things that are unrelated to Customs and Border Protection.

But as bad as this incoherent and gimmicky package truly is, the sad reality is that it is better than the next most likely option on the table: a corporate “repatriation” tax [...] (R)epatriation would reward and encourage offshore tax avoidance and reduce federal revenues in the long-term.

President ObamaHouse Speaker Paul Ryan and Sens. Rand Paul and Barbara Boxer all are in support of some version of the repatriation tax.

"Gimmicks" is actually a gentle term. A critic called them "a sick joke," writes Ashley Halsey III of The Washington Piece in an extensive piece on the funding in the House and Senate bills.

Davis ends by pointing to the states, which unlike the federal government, have shown a willingness to increase gas taxes to fund needed transportation improvements. "In just the last three months, eight states have approved increases in their gasoline taxes to fund additional spending on infrastructure maintenance and expansion," he wrote earlier.

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Published on Friday, November 20, 2015 in Institute on Taxation and Economic Policy
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