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Indexing the gas tax is still a tax hike on workers and families

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Every day, 77 percent of Americans travel to work by car. This includes moms and dads, students, and hardworking Americans who are just trying to get by and earn a living.

On top of car payments, insurance premiums, and routine maintenance, commuters pay every time they go to the pump – and a sizeable chunk of the cost is federal and state taxes.

In federal gas taxes alone, drivers pay 18.4 cents per gallon. But each state also imposes its own tax, which averages out to about 36.13 cents per gallon. In some states, it’s more than twice the average. Combined, individuals pay an average of 54.53 cents in taxes per gallon every time they fill up their tanks. That’s an additional $6 or more per tank for a typical driver.

What’s worse, much of that gas tax revenue is diverted to unjustifiable projects—like bike paths, local transit, historic preservation, and others—that are completely unrelated to highway performance, safety, or congestion mitigation. Rather than address such misdirected spending, Congress predictably would prefer to increase your taxes and call it a day.

Specifically, leading Senate Republicans have asked the Joint Committee on Taxation to estimate the costs of indexing the gas tax to inflation, which would lead to ever-higher taxes, without Congress ever having to vote on future increases. But have no illusions: indexing the gas tax would still be a tax increase.

Elected officials should be accountable to their constituents; indexing gas taxes to inflation lets them off the hook.

And of course, raising the already regressive gas tax would disproportionately hurt those who can least afford it.

Defenders of indexing the gas tax to inflation claim that the change is needed to address vital infrastructure needs. But higher tax rates do not equal better roads.

A handful of states have enacted indexing for their state gas taxes. Their results are anything but an endorsement of expanding the idea to the federal gas tax.

Already, there are seven states that use the Consumer Price Index to determine gas tax rates. As a group, they have higher-than-average gas taxes – and worse-than-average roads.

According to Reason Foundation’s latest Annual Highway Report, states with indexed gas taxes have ratings of “average” to “very bad.” On the other hand, the state with the highest quality roads, North Dakota, hasn’t raised its gas tax since 2005.

It’s true that our country has infrastructure needs. But increasing the gas tax is a politically convenient way to address those needs without having to answer to taxpayers. Instead of simply demanding that ordinary Americans pay more, Congress should pursue innovative solutions that would save money and improve the process of rebuilding our infrastructure.

The major reason we aren’t getting what we pay for is because the federal government wastes billions that should be spent on roads and bridges on unnecessary projects and costly regulations.

Some ways of achieving smarter infrastructure spending before resorting to a gas tax increase include:

  • Preserving federal infrastructure dollars for targeted construction projects of a national priority.
  • Unleashing private investments in infrastructure assets.
  • Returning power and responsibility to the states whenever possible.
  • Overhauling the regulatory and permitting system to improve outcomes and efficiency.
  • Eliminating costly and unfair labor restrictions.

Three years ago, Congress passed the Tax Cuts and Jobs Act, giving much-needed relief through comprehensive overhaul of the tax code. Raising the gas tax would scale back some of the gains the tax law provided, while providing few tangible benefits in return.

To keep our elected officials accountable for tax hikes and to ensure hardworking Americans aren’t penalized for driving to and from work, Congress should reject any gas tax increase such as indexing the gas tax to inflation.

If we really want to fix our nation’s roads and bridges, Congress doesn’t need to tax more, it needs to spend smarter.

Michael Lambert is a policy analyst at Americans for Prosperity.

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