THE BLOG
11/19/2015 08:41 am ET Updated Nov 19, 2016

Gas Tax or User Fee?

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Few private citizens have ever exercised as much influence with the Federal Government as Wayne B. Wheeler, the dynamo who led the Anti-Saloon League (ASL) in its relentless campaign for prohibition and then defended it against repeal efforts until his premature death in 1927. Wheeler knew how to manipulate the political process. When a Senator or Congressman dared vote against the ASL, Wheeler organized the anti-booze forces among that legislator's constituency and got him defeated in the next election. Politicians were terrified of him and most of them fell into line when Wheeler cracked his whip.

We have a modern day equivalent of Wayne B. Wheeler in the person of Grover Norquist, the founder and president of a group called Americans for Tax Reform. Right now Norquist's web site lists 41 Senators and 235 Representatives, more than half of the House, who have signed his pledge promising to never raise taxes. Some contend that pledge amounts to dereliction of duty -- raising taxes is part of the governing process -- but it is what it is.

Like his antecedent Wheeler, Norquist knows how to lower the boom on politicians who break their no tax pledge. He demurely insists that it isn't him but rather the voters who punish anyone who supports tax increases, and of course that is true. But Norquist makes certain the voters know when their Senators or Congressmen break their pledge.

The Norquist anti-tax pledge is the major reason why Congress is falling all over itself trying to find creative ways to pay for modernization of our nation's infrastructure which everyone, Republican and Democrat, agrees is desperately needed. The solution, of course, is obvious -- raise the gasoline tax. The current federal gasoline tax is 18.4 cents per gallon of gas (24.3 cents per gallon of diesel fuel) which was originally set in 1993. Since then the cost of road and highway maintenance has gone up while consumption of gasoline has actually declined because of increased fuel efficiency of vehicles. And of course the new generation of electric vehicles gets a free ride.

Right now, the federal gas tax is bringing in only about $34 billion a year while the government is spending $50 billion on various transportation needs, leaving a $16 billion shortfall that Congress has thus far managed to paper over with about $65 billion from other sources since 2008. It's not enough. The deterioration of our highways, bridges, railroads, waterways and airports continues, having a negative impact on our economy and our way of life.

Now is a good time to raise the gasoline tax. Declining oil prices mean lower costs at the pump, so a tax hike would not be highly visible. Various surveys show that most voters would support a higher gas tax if the money were spent on infrastructure. Some of the states, including red states, have already raised their piggyback taxes on the federal fuels taxes to raise more money for infrastructure upgrade. And the new Speaker of the House Paul Ryan has designated infrastructure investment as one of the few items the House can agree on.

The key is for leaders of the Senate and House to sit down with Norquist and explain to him that the gas tax is really a user fee, which it is, thus exempting it from the anti-tax pledge.

Jerry Jasinowski, an economist and author, served as President of the National Association of Manufacturers for 14 years and later The Manufacturing Institute. You may quote from this with attribution. Let me know if you would like to speak with Jerry. November 2015