Republicans and Democrats exchange locations by taxing drivers to pay for road repairs

Discussions on how to pay for national roads, bridges, and transportation systems have led Republicans, who are usually tax-exempt, to accept higher taxes on drivers, even new ones based on mileage instead of purchased fuel. ..

However, some Democrats who supported the idea of ​​charging mileage fees are now opposed. They see infrastructure as an economic stimulus and want to pay corporate tax.

The change in position has plagued Washington observers.

Adrian Moore, vice president of policy for the Libertarian think tank Reason Foundation, said:

The debate over whether drivers or businesses should support the bill threatens to break negotiations between President Joe Biden and Senate Republicans for a large-scale infrastructure program. Biden has withdrawn from one-on-one talks with West Virginia Republican Senator Shelley Moore Capito, but the White House says some Democrats want their party to do it alone. Nevertheless, he said he was still involved with another senator bipartisan group.

According to deliberation savvy people, a bipartisan senate group has agreed to market Biden a $ 1.2 trillion eight-year infrastructure spending package. This is well below the $ 1.7 trillion that Biden proposed in a face-to-face meeting with Capito.

The president is in Britain for the Group of Seven Summit, but Democrats from the bipartisan group went to the White House on Thursday. “We need to address questions specifically about both policy and payment details,” said Andrew Bates, a White House spokesman.

Indexing the fuel tax (currently 18.4 cents per gallon) as an indicator of inflation is being discussed by a bipartisan group working on a compromise, according to Utah Republican Mitt Romney. .. He said it wouldn’t raise a lot of money.

Dick Durbin, No. 2 The Senate Democratic Party said Thursday in favor of indexing the gasoline tax. Still, it’s unclear if the White House will support such a move.

Just two months ago, Secretary of Transportation Pete Butigeg said the Biden administration was considering the so-called vehicle mileage tax as a way for all drivers to pay for road maintenance. The advantage of VMT is that it offsets the federal gas tax loss caused by increased sales. Electric car..

However, the White House subsequently reversed its policy, saying it violated Biden’s pledge not to raise taxes on the middle class.

“When it comes to US employment plans, we’re working hard to find something in common with the Republicans, but we’re refusing to raise taxes on Americans who earn less than $ 400,000 a year to pay for it,” Biden said on Tuesday. Tweeted to. “It’s a long time ago that HNWIs and businesses pay a fair share.”

The Democratic Party has been obsessed with the idea of ​​raising taxes for large corporations, including those whose taxes were cut during the Trump administration.

“There is no evidence that this view that tax cuts for the wealthy are good for the economy,” said Senator Sherrod Brown, a Democrat in Ohio. “They want to raise the gasoline tax for $ 60,000 a year, rather than raising the income tax for $ 300 million a year.”

25 cents truck tax per mile?

Republicans oppose the idea of ​​raising corporate taxes to pay for roads.

In May, Illinois Republican Rep. Darin LaHood said, “In the last three decades we have passed in a bipartisan way, infrastructure bills here in Congress have always been based on some user fees. “. 19 Houseways and Means Committee hearing.

“But instead, today we’re talking about tax diversions that talk about raising corporate tax rates to fund infrastructure,” he said.

Texas Republican Senator John Cornyn last month proposed raising $ 33 billion annually by imposing a quarter tax on every mile a heavy-duty truck drives. This is almost the same as fuel tax.

The truck driver immediately disputed.

“We are not against VMT,” said Bill Sullivan, Executive Vice President of Advocacy for the American Trucking Associations. “What we strongly oppose is this idea of’let’s do this just for the truck.’ “

Greg Regan, president of the AFL-CIO’s Department of Transport and Trade, argued that Republicans who opposed the increase in gasoline taxes and the shift to mileage rates would have a disproportionate impact on low-income earners. Now, it’s the Democrats who are discussing it, suggesting that Republicans need to use user tolls to pay for roads and transportation.

Ed Mortimer, vice president of transportation and infrastructure at the US Chamber of Commerce, attributed the change in user pricing among Republicans to their familiarity. Electric car As a phenomenon of the blue states. So he said they ignored the warning about gas tax shortages until Republican-led states began to see their fuel taxes go down.

“Some Republicans may be reluctant to raise user fees and corporate taxes,” Mortimer said.

Electric car

Sam Graves, Missouri, a top Republican member of the House Transport Infrastructure Commission, argued that VMT could be easily implemented using a gas pump-evaluated formula, as well as a fuel tax payment method.

Such tolls also help support highway funding.With gas diesel The tax excludes a whole new category of drivers on the road: electric vehicle drivers. Proponents say it will help fill the federal highway funding gap. Gas tax brings $ 34 billion annually and federal spending on highways and public transport exceeds $ 50 billion annually.

“Middle-class workers are proposing to pay what giants don’t pay,” Senate Finance Committee chairman Ron Wyden of the Democratic Party of Oregon said in a May panel hearing on financing infrastructure. Stated. “It’s not a step towards fairness.”

Before commenting, Weiden said he would consider a petrol tax indexing proposal, such as Romney said he was considering. He pointed out that Biden “reserved this as a regressive tax,” emphasizing the Democratic view that businesses are currently underpaying taxes.

Senator Chuck Grassley, a Republican veteran in Iowa, said Thursday that “it’s better than raising the fuel tax and is likely to be achieved” in the levy indexing. He also said that if it had happened in the early 1990s, “we wouldn’t be in the situation we are in now.”

The Highway Trust is expected to be part of the infrastructure program, but Congress is working on an independent bill to replace the five-year, $ 305 billion bill extended until September 30. The $ 494 billion water transport bill in July 2020 has not been approved by the Senate. Democrats in the House of Representatives have submitted a $ 547 billion water transport bill. Republicans in the House of Representatives countered with a smaller $ 400 billion measure.

Former U.S. Secretary of Transportation Rodney Slater, who served in the Clinton administration, said the last fuel tax hike from 14 cents in 1993 to 18.4 cents was related to the federal government’s efforts to reduce deficits. .. It passed without a Republican vote.

According to Slater, 4.3 cents per gallon was devoted to the Highway Trust Fund in 1998.

Slater said the consideration of alternatives to the gasoline tax, including mileage charges, dates back to the Clinton era. In addition to his early VMT research, he cited the creation of the Transportation Infrastructure Finance and Innovation Law Program and Rail Rehabilitation and Improvement Finance in 1998.

“We tried to get started with the VMT,” he said. “We realized that we couldn’t rely solely on gasoline taxes for transportation. We were beginning to look for innovative financing methods.”

Republicans and Democrats exchange locations by taxing drivers to pay for road repairs

Source link Republicans and Democrats exchange locations by taxing drivers to pay for road repairs

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