The Stupid Party Strikes Again: GOP Flirts with Gas Tax Hike

Daniel J. Mitchell

One of the very first “accomplishments” of the new GOP majority in Congress was to approve a piece of corporate welfare to subsidize terrorism insurance for big companies.

But I tried to overlook that development since there were a few modest reforms included with the legislation. After all, you shouldn’t make the perfect the enemy of the good (even if the good, in this case, was rather anemic).
There won’t be any excuse, however, if Republicans move forward with a plan to hike the gas tax and further centralize transportation decisions in Washington.
And that’s exactly what seems to be brewing. Senator Corker of Tennessee (an otherwise generally sensible lawmaker) has put forward a specific plan.

Corker, R-Tenn., is drafting something most conservatives avoid at all costs — a tax bill. The Tennessee senator, along with Sen. Chris Murphy, D-Conn., wants the 18.4-cents per-gallon federal gasoline tax and the 24.4-cents per-gallon federal diesel tax to each increase by 12 cents over the next two years — and then be indexed to inflation.

And there are several other senior GOPers who have expressed sympathy.

“I just think that option is there, it’s clearly one of the options,” said Sen. Inhofe (R-Okla.), new chairman of the Senate Committee on Environment and Public Works. Senate Finance Chairman Orrin Hatch (R-Utah) and Sen. John Thune (R-S.D.), the third-ranking Senate Republican, also said they were open to the possibility of raising the tax.

Wow. This is so bad and so discouraging that I’m not even sure where to start.
So let’s make three observations.
1. Bad character. Every single Republican Senator cited in the two stories has pledged to the people of their states that they will oppose all net tax hikes.
For those of us with old-fashioned views on personal integrity, this is rather troubling.
Other than reminding me why I often have disdain for Republicans, this brings back bad memories of the “Read my lips, no new taxes” fiasco.
2. Bad politics. It is remarkably foolish for Republicans to tarnish and undermine the GOP brand as an anti-tax party.
When the issue is “should there be a tax hike?”, Republicans are more trusted by voters. But if the debate shifts to “Who should pay more tax?”, then the Democrats have an advantage.
So by putting a gas tax increase on the table, these Republicans are saying they want their opponents to have a home-field advantage.
3. Bad policy. Higher gas taxes at the national level are the wrong approach for several reasons.
But rather than reinvent the wheel, let me cite the wise words of my friends Larry Kudlow and Chris Edwards.
Here’s some of what Larry wrote for Townhall.

What can Sen. Bob Corker be thinking? On his first Sunday-news-show appearance of the year, right at the beginning of a new Republican Senate era, does Corker communicate a new GOP message of growth and reform? …Does he talk about rolling back Obamacare or regulations in general?…No. His first Republican message is: Raise the federal gasoline tax.

He explains why this is a foolish idea.

American consumers and businesses finally get a break with plunging oil and gasoline prices. Main Street finally has something to cheer about. And then Mr. Corker weighs in with a wet-blanket proposal to raise federal gasoline and diesel taxes by 12 cents a gallon over two years from the current 18.4 cents. …Why not lead the way for a complete reform of the Highway Trust Fund, transportation spending and the Federal Highway Administration? …If states like California want to build $100 billion speed trains to nowhere, let them. But people in the rest of the country shouldn’t have to pay for it with gas and diesel taxes. …A quarter of HTF spending today is for non-highway purposes. …Federal rules like Davis-Bacon raise building costs for state and local infrastructure by at least 20 percent. Federal aid breeds cronyism, political connections and bureaucratic power in Washington D.C.

The point about gas taxes being diverted is important. Even if we keep the status quo, we don’t need Washington squandering road money of things such as mass transit or high-speed rail boondoggles.
Larry closes his column with a special plea.

Please, Sen. Corker, with the new Republican Congress in place, don’t turn the GOP into the dumb party.

And here are some excerpts from what Chris wrote for Cato.
He starts by debunking the notion that there is an infrastructure crisis.

…our highways and bridges appear to be improving, not getting more “troubled.”Federal Highway Administration (FHWA) data show that of the nation’s 600,000 bridges, the share that is “structurally deficient” has fallen from 22 percent in 1992 to 10 percent in 2013. The share that is “functionally obsolete” has also fallen. Meanwhile, the surface quality of the interstate highways has steadily improved.A study by Federal Reserve economistsexamining FHWA data found that “since the mid-1990s, our nation’s interstate highways have become indisputably smoother and less deteriorated.”

But even if we had a growing number of “troubled” and “deficient” bridges and highways, that shouldn’t matter.
As Chris explained in testimony to the Senate Finance Committee, these issues shouldn’t be handled by Washington.

One option would be to reduce spending and downsize the federal role in transportation. That approach would encourage state governments to pursue their own innovative solutions for highways and transit, such as new types of user charges, public-private partnerships, and privatization. Federal aid programs for highways and transit have many shortcomings. Aid redistributes transportation funds between the states in ways that are unfair and inefficient. Aid can get misallocated to low-value projects, and it distorts efficient decisionmaking by state and local governments. Also, federally funded projects are known for mismanagement and cost overruns.

Bingo. Chris is exactly right.
Which is why the right approach to transportation is to repeal the gas tax, not raise it.
As I argued in this debate with former Pennsylvania Governor Ed Rendell, we need to get Washington out of the business of determining state and local transportation issues.
P.S. Here’s an interesting example of “public choice” economics. Ask yourself why the CEO of a car company would endorse a big tax hike on gasoline. I give my answer in this discussion with Judge Napolitano.
P.P.S. Don’t forget that the politicians in Washington also are considering a tax on miles driven, so they’d be able to squeeze more money out of motorists even if they have fuel-efficient vehicles.
P.P.P.S. Just in case you’re tempted to acquiesce to more power and money for Washington, never forget the lesson of this poster.