Thomas Donlan‘s latest Barron’s editorial commentary includes a blurb that should cause concerns for anyone heading to a gas pump in the months ahead.
As the U.S. turns to greater oil production, turning the world toward lower oil prices, American politicians sense an opportunity to raise federal taxes on motor fuels.
Federal fuel taxes raise only about two-thirds of federal spending on highways and transit, and the rate hasn’t been increased since 1993.
It could be a political miracle: a painless tax increase. As the price at the pump declines back toward what we used to call normal, the feds can grab some of the money that we used to call ours.
If the market price drops 50 cents a gallon, who would begrudge the feds an extra 18 cents a gallon—especially since the doubled tax revenue would be “invested” in infrastructure? We would, of course.
Federal fuel taxes are part of what’s wrong with U.S. investment in infrastructure. When the feds give money to the states, it’s like a gift card for the legislators and their highway bureaucrats: more money without responsibility for raising taxes. The states should define their own needs and invest their own tax money.
