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Chamber of Commerce Urges Lawmakers to Raise the Gas Tax

By Alec MacGillis
On the same day as the U.S. Chamber of Commerce was attacking President Obama and congressional Democrats over a tax-hiking plan to pay for health care reform, its leader urged the same people to have the courage to raise taxes on another front: the federal gasoline levy that pays for our highways

The White House has signaled that, busy as it is with health care, climate change and other issues, it wants to delay for 18 months the looming question of how the country should pay for its transportation infrastructure. The 18.4 cent-per-gallon federal gasoline tax has not been increased since 1993 and, as inflation progresses and people switch to more efficient cars, the tax is increasingly unable to cover the country's highway, bridge and public transit needs.

House Democrats have drafted a $500 billion six-year transportation bill to replace the six-year plan that expires this fall, but the White House would rather extend the current spending plan using general revenues, rather than have the hard discussion over whether to raise the gas tax.

Today, those urging immediate action on the country's transportation troubles got a somewhat unlikely boost from the Chamber, whose president, Tom Donohue, declared that Congress should pass a new six-year plan paid partly through a gas tax increase. Hours later, chamber members from around the country ascended the Hill to deliver the same message to senators who have been siding with the White House on delaying any action.

The chamber says it would support an increase along the lines of what a federal commission suggested in 2005 -- around 10 cents per gallon right away, followed by annual increases of about 5 cents for the next few years and then subsequent increases to keep pace with inflation.

"After 15, 16 years of not having an increase in the federal fuel tax, it is time to do that," Donohue said. "It's just a small amount of the money that will be needed over time. Fuel prices are back down pretty much. Ten cents on the gallon -- everyone will make lots of noise about, they'll be worrying about it for two days, and then we'll be back to building the roads we need."

Donohue scoffed at the White House's fears of raising gas taxes in the middle of a recession. The gas tax, he said, was less a tax than a user fee, and what better time to raise it than when the price of gas is relatively low.

Such a move may be criticized by others, he said, but not by the business community. "We're trying to give them a way out in this deal. The American business community is saying, we don't see this as a tax, this is a user fee. Those people who use these roads and bridges ought to be contributing to the maintenance, upkeep and expansion where that needs to be done," he said.

He added, "Do it! Just damn do it. You've got a window of opportunity now. If you do it, you're going to make some progress, put people to work, improve productivity in this country and strengthen the economy. If you wait, you're going to be doing it in the midst of a lot of other issues and be held responsible for it."

Donohue was backed up by Steve Odland, the CEO of Office Depot, who also derided the White House for worrying about the political fallout from a higher gas tax at the same time as Democrats are discussing raising taxes on the wealthy to pay for health care.

"The idea that people don't want to raise taxes is laughable," Odland said. "When you're talking cap and trade, health care surcharges, raising income taxes by 500 basis points next year -- we're raising taxes all over the place. What we're saying is, stop raising those taxes, and let's start with the user fees that will get our economy growing again... We view this as user fees, not as a tax. The idea that we're not willing to raise that tax but we're willing to raise every other tax in America, that's just silly."

Posted at 5:03 PM ET on Jul 15, 2009  | Category:  Economy
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It's time for us Americans to start paying a more honest price for our polluting ways. Only when gasoline is priced higher than it is today, will we be encouraged to use it more wisely. For our children, our health and our public budgets, the time to raise the gas tax is now. And I agree that a dollar sounds about right, but we certainly would settle for a quarter, or even a dime with future increases.

Posted by: nalp | July 17, 2009 1:09 AM

Boy that Donohue is a smooth talker.

Kimkim, I really hope your comment was overwhelmingly smothered with sarcasm.

Posted by: suchafinedancer | July 16, 2009 2:32 PM

How can tax payers punish the chamber of commerce? I'm ready.

Posted by: 1uncle | July 16, 2009 2:24 PM

Yeah, who needs roads anyway?

Posted by: nodebris | July 16, 2009 1:28 PM

Pee on thee, times are tough enough without more tax on gas!

Posted by: shadyman | July 16, 2009 11:58 AM

"Excessive intervention in economic activity and blind faith in the state's omnipotence is another possible mistake... Instead of streamlining market mechanisms, some are tempted to expand state economic intervention to the greatest possible extent...

In the 20th century, the Soviet Union made the state's role absolute. In the long run, this made the Soviet economy totally uncompetitive. This lesson cost us dearly. I am sure nobody wants to see it repeated...There is no reason to believe that we can achieve better results by shifting responsibility onto the state...

And one more point: anti-crisis measures should not escalate into financial populism and a refusal to implement responsible macroeconomic policies. The unjustified swelling of the budgetary deficit and the accumulation of public debts are just as destructive as adventurous stock-jobbing."

-- Vladimir Putin, Russia Prime Minister
Feb 2009 Lecturing the U.S. on the dangers of socialism.

Posted by: star_key2 | July 16, 2009 11:37 AM

Don't you see that this is a deep dark Republican Plot so that they can claim that President Obama is ONCE AGAIN raising taxes?

Posted by: ghmbfisher | July 16, 2009 11:04 AM

Wow. What, they are proposing that taxes allow government to produce something useful? The whole Chamber is going to have to resign en masse from the GOP now.

If fixing the roads were wise, we all know taxpayers would have done it themselves by now with their own money. Only taxpayers know how to spend their own money well, not the government -- that's a GOP dogma you can't contradict.

Posted by: nodebris | July 16, 2009 10:05 AM

Lets raise the tax on big oil too. Since there pulling in the billions from natural resources that they seem to have a monopoly on, its only fair that we put a 70% tax on their profit. After all they shouldn't be entitled to all the gas and oil.

Posted by: kimkimminni1 | July 16, 2009 9:34 AM

Since the CC is willing to take on the load, and since their normal constituency is actually the republicans in Congress, perhaps they should get their side lined up for this gas tax increase. Surely if a super majority of Republicans insist on that increase the Democrats will provide enough votes and abstentions to pass the legislation, which Barack Obama would certainly NOT veto.

But ten cents is a bit miserly, all things considered, it OUGHT to be a dollar, so a quarter wouldn't be a bad compromise. (And I WOULD vote for a Congressmen or Senator who voted for the dollar, absolutely.)

Posted by: ceflynline | July 15, 2009 10:08 PM

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