Republicans in Congress want to raise the federal gas tax. Yes, the same Republicans who oppose tax hikes most of the rest of the time.
You won’t hear them say, “let’s raise the gas tax,” exactly. There’s a code phrase: “user fees.” Senate Minority Leader Mitch McConnell, for instance, says Republicans will support $600 billion in infrastructure spending, as long as user fees cover the cost. “We’re happy to look for traditional infrastructure pay-fors, which means the users participate,” McConnell said in Louisville on May 3.
By “participate,” McConnell means whoever uses the infrastructure should pay for it, through taxes, tolls or other charges. That’s quite different from what President Biden wants to do, which is raise taxes on businesses and the wealthy to pay for nearly $2 trillion in road and bridge projects, green energy, and numerous other building programs. Republicans are dead-set against Biden’s proposed tax hikes, which would reverse some of the 2017 tax cuts that passed with only Republican votes.
The conventional wisdom on infrastructure is that it’s one rare area of bipartisan agreement, since everybody wants better transportation and a more efficient economy. But there’s not really bipartisanship, because of the clash over how to pay for it. It’s like a husband and wife saying they agree on the importance of money, except he wants to spend it while she wants to save it.
User fees would force Biden's hand
If Republicans controlled Congress, it’s extremely unlikely they’d raise user fees or impose new ones to pay for an infrastructure plan. The federal gasoline tax, which is supposed to cover the costs of the national highway system, is a classic user fee because people who buy gas—drivers—pay into the fund that maintains the roads they drive on. But the gas tax has been stuck at 18.4 center per gallon since 1993, and it’s now too low to cover all the costs it’s supposed to. President Trump supposedly wanted a big infrastructure plan, and his fellow Republicans controlled Congress during the first two years of his presidency. Yet they never mounted a serious infrastructure plan, let alone new user fees to pay for it.
So why do Republicans favor user fees now? Because they would force Biden to break a core campaign promise, damaging him politically. Biden pledged not to raise taxes on households earning less than $400,000 per year, and any user fee applied broadly to the public would violate that pledge. User fees are actually a sensible and proven way to pay for big projects, yet Biden, for better or worse, has effectively ruled them out as a funding source for his ambitious plans.