In recent days, a growing number of congressional Republicans have signaled a willingness to increase the federal excise tax rates on gasoline and diesel. As I noted earlier, there is no fiscal conservative case for raising the federal gas tax. Thankfully, the editorial board of The Wall Street Journal this morning decided to inject a much needed dose of fiscal conservatism into the debate, calling for an abolition of federal highway taxes and spending programs:
Some highways do need repair and modernization, and the U.S. does need more roads to relieve congestion and encourage trade and economic activity. The real crisis isn’t the amount of money but how it is spent.
The 47,714 miles of the interstate highway network would likely be less complete absent federal support, but the system was officially finished in 1992. It is less rational for drivers nationwide to send so many dollars to Washington for Congress to apportion among winners and losers as they did under Eisenhower. Today, the costs of transportation can be reasonably borne by the people who enjoy the benefits, which will generate more accountability and fewer political boondoggles.
Almost three-quarters of highway spending is already supplied by state and local governments, and if the federal role is reduced, they can decide either to increase their own gas taxes; fund roads some other way, such as tolls or public-private partnerships; or use tax dollars for other priorities like schools. States can build cheaper in any case, since the Davis-Bacon prevailing wage rules and Buy America procurement provisions that accompany federal funding don’t apply.
Democrats always want to raise the gas tax. When prices are high, that’s the best time to encourage drivers to buy an electric car or take the bus. When prices are low, they can skim some of the proceeds for other spending. The mystery is why Republicans would go along.
I'm not sure about that last line about Democrats. While some Democrats, along with senior congressional Republicans, have called for increasing federal highway user taxes, this position puts them to the left of the Obama White House, which has stuck to its guns and continues to oppose raising the highly unpopular gas tax. Among some bad policy recommendations, the Obama administration has actually endorsed a very sensible, fiscally conservative proposal that would lift the current federal prohibition on states tolling their own Interstate Highway System segments. This is something we at CEI have advocated for years and have again included it in our forthcoming Agenda for Congress.
The "mystery" of recent GOP support for fuel tax increases really isn't that mysterious. Unfortunately, the Republicans appear to be under the sway of the U.S. Chamber of Commerce, which favors fuel tax hikes and opposes road pricing. In turn, the Chamber is under the sway of its powerful trucking industry members (Chamber president Tom Donohue was previously the president of the American Trucking Associations), who prefer a federal tax-and-spend system that effectively allows them to shift the costs of their use (namely the damage heavy trucks do to roads) onto the traveling public. They fear expanded tolling would reduce this subsidy and, in an effort to be "part of the solution" in the eyes of gullible members of Congress, push politically difficult fuel tax increases instead.
Republicans just won control of both chambers of Congress for the first time in eight years because voters wanted to see some legitimate fiscally conservative governance. Tax increases should not be among the first orders of business. It is now long overdue for the Republicans to break with the road socialists who dominate their business wing and support surface transportation policies that embrace fiscal conservatism, markets, and federalism.