Trump adviser supports raising gas tax to pay for infrastructure

Trump adviser supports raising gas tax to pay for infrastructure
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One of President Trump’s advisers says he supports hiking the federal gasoline tax to help pay for new roads and bridges — a politically fraught issue that Congress has avoided for years.

Richard LeFrak, a real estate developer leading a new White House council to vet infrastructure projects, told CNBC on Wednesday that he is “in favor” of increasing the gas tax, which hasn’t been raised in over 20 years.

The federal fuel tax is currently 18.4 cents per gallon of gasoline and 24.4 cents per gallon of diesel fuel.  

"You'd be leveling it to where it would have been had they adjusted it for inflation in 1993," he said. "If they did adjust it for inflation ... it actually would produce tens of billions of dollars to annual revenue that would be reinvested.”

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But LeFrak also acknowledged that cars are becoming increasingly more fuel-efficient and that a hike in the gas tax would hurt lower-income Americans more than the wealthy.

“That’s just one source of revenue,” LeFrak said. “It’s not the only source of revenue.”

Trump made waves earlier this month when he said he was open to raising the gas tax to help pay for his $1 trillion infrastructure package.

GOP lawmakers balked at the idea, while the White House quickly walked back Trump’s comment to clarify that the president had merely agreed to consider the request of a transportation group that met with him.

A number of states have begun to raise gasoline taxes on their own, as long-term funding solutions for transportation upgrades have eluded Washington.

The White House appears to be running into familiar hurdles. The administration has yet to reveal how it plans to pay for Trump’s massive rebuilding plan, which was outlined for the first time in the president’s budget proposal last week.

But a detailed legislative package is not expected to be unveiled until later this summer.

LeFrak said Trump is eager to make progress on the infrastructure initiative, adding that historically low interest rates make it "the best time in the world" to borrow money for the rebuilding effort.

“The president … is very anxious to get this subject on the table and get rolling, because it’s jobs for Americans,” LeFrak said.