Trump must avoid gas tax trap Democrats are setting for him

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The 2016 presidential campaign of Donald Trump broke the mold for Republican candidates, especially when it came to infrastructure funding. He turned a common Democratic refrain about “crumbling infrastructure” into a powerful message that neutralized the left and excited the political center. Now the Democrats are poised to use Trump’s own message to trick him into raising taxes and spending at the same time during the next two years of legislative stalemates. Trump, ever the dealmaker, could be prey to an old idea from Nancy Pelosi and the Democratic leadership: Raise the gas tax to pay for a new series of building projects.

If it sounds deceptively simple, it is! Just days after the midterm elections, the left is already applying pressure on the president to raise the gas tax to fix our antiquated roads and bridges. Ray LaHood, a Republican who served as transportation secretary under President Obama, offered a fig leaf of bipartisanship for Democrats. He said that Trump must “persuade Republicans in the Senate that they’re going to have to pass some kind of revenue raiser.” It would be a “very good start,” he added. Note the word “start,” implying more taxes are on the way. Color me shocked.

{mosads}The “solution” is not conservative at all, and would increase your toll at the pump by 10 cents a gallon. The federal government already imposes a gas tax of 18.4 cents per gallon. Increasing this by over 50 percent will create more headaches for Trump and the Republicans than reconstructed bridges. Supporters of an increase argue that people who drive use the roads, so those same people should pay to fix them.

The problem is that the money from any gas tax hike will not go to infrastructure because history has shown that it rarely does. Gas taxes used to fall under the “benefit principle,” which meant revenue taken from drivers goes towards the public projects that benefits them. Today, however, the majority of gas tax revenue does not go toward anything remotely related to transportation. Instead, politicians in Washington see the gas tax fund as simply another piggy bank to raid for pet causes.

The proposed tax hike is offensive for two reasons. First, the money does not even go where it is intended. About $8 billion, which is 20 percent of the current federal gas tax revenue, is not even used for roads. The labs of democracy in each of the 50 states see a remarkable lack of correlation between higher gas taxes and better roads. California has the second highest state imposed gas tax in the union yet the worst roads, with only 15 percent of its roads in good condition, according to the Transportation Department. If California is not getting bang for its buck with 55 cents per gallon of local taxes, then what will a dime do for federal efforts?

Second, the whole effort reeks of abandoning federalism. States have taken their own paths because of unique circumstances within their own borders. In the last five years, states of every political shade have increased their gas taxes, and each uses this funding for their own projects. Even red states like Texas and Kansas have joined blue states like Connecticut and Maryland in spending more than half of their gas tax and registration hauls on use other than highways. Bad priority? Usually.

However, this also offers a flashing neon illustration for Trump and the Republicans, which is that the Democrats are not operating on good faith. Even if you want this funding for roads and bridges, it will go toward pet projects and toward the federal general fund. It happens in red states, so who says it will not happen with Democrats in control of the House?

Besides, the federal gas tax is already too high. People love to complain about the mean “big oil” companies, but Washington is profiting seven times more from our gasoline purchases than “big oil” is. American oil companies make about 7 cents profit on every gallon of gas they sell us, while the federal government takes in more than 48 cents per gallon.

Trump has flirted with gas tax hikes in the past but so far has avoided caving to the temptation of an increase. He reportedly considered them earlier this year as a means to funnel cash to the Highway Trust Fund. The Democrats now see an opening with the split decision in the midterm elections. This is nothing short of a trap for the president, intended to make the Democrats look bipartisan and Trump to look like a tax hiker.

This should sound familiar. Back in 1990, George H.W. Bush was snowed into a significant tax increase by the Democrats claiming a compromise to reduce the deficit. The increase in payroll, income, and alternative minimum taxes sharply decreased his popularity and likely cost him reelection in 1992. Bill Clinton, who was then the governor of Arkansas, called Bush untrustworthy for breaking his “read my lips” pledge.

This is a heads I win and tails you lose situation. Bush is now heralded by liberal types for his “courage,” which they must count as his bravery in partially causing the 1992 recession and destroying his political career. The Democrats are playing a crafty game here. It is low hanging fruit for Trump’s infrastructure agenda and a great opportunity to paint the president as a liar who is willing to break his promises of no taxes on middle income people for an illusory promise. George H.W. Bush made the same bargain and two years later lost the White House. Sound familiar?

Kristin Tate is a libertarian writer and author of “How Do I Tax Thee? A Field Guide to the Great American Rip-Off.” Follow her on Twitter @KristinBTate.

Tags Bill Clinton Congress Donald Trump Finance Kristin Tate Nancy Pelosi states

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