The White House’s top economist Thursday pushed back against President Trump’s idea of raising the federal gasoline tax to help pay for a $1.5 trillion infrastructure plan, calling the levy an outdated approach.
Kevin Hassett, chairman of the White House Council of Economic Advisers, said the gas tax that currently finances highway projects simply isn’t designed for the 21st century.
“Suppose that everyone in this room and all of society had an electric car,” he told reporters at the White House. “If we are all driving around in Teslas who is going to pay to fix the pot holes because there is no one using gasoline any more.”
Mr. Trump reportedly endorsed a 25-cent increase to the gas tax during a closed-door meeting on infrastructure.
A White House official wouldn’t confirm it but said the idea had “pros and cons.”
The federal gas tax, currently 18.4 cents a gallon for gasoline and 24.4 cents for diesel, has not increased since 1993.
The idea was also slammed by low-tax crusader Grover Norquist, who championed the tax cuts that Mr. Trump signed into law in December.
“A gasoline tax would claw back as much as 60 percent of the benefits from the Trump tax cuts,” he said. “Every second day or every third day [when filling up your gas tank] you’d be reminded you were screwed.”
Mr. Hassett stressed that Mr. Trump wasn’t singularly focused on the gas tax, saying the president was perusing a long menu of methods to finance a massive program to rebuild America’s highways, bridges, airports and inland waterways.
“He’s basically instructed everybody to think creatively about how we are we going to finance that to make sure that the legislation becomes law and all of the possible tools are on the table,” he said.
Mr. Trump has been casting about in search of a means to pay for the infrastructure plan.
His proposal is to use $200 billion in federal spending over 10 years, coupled with cutting the federal red tape that slows project and innovative financing options, to leverage a total investment of $1.5 trillion from state and local governments.
The infrastructure plan was a prominent campaign promise from Mr. Trump in 2016 campaign and it is near the top of his agenda for his second year in the White House.
Capitol Hill Democrats have been cool to the proposal. They prefer direct federal spending of at least $1 trillion.
They also accuse the president of trying to shift the burden of paying for infrastructure to cash-strapped state and local governments.
Some of the other ideas being floated include user fees imposed by states, such as tolls and high-occupancy toll (HOT) lanes, in which motorists pay to use a less congested lane of highway.
The annual Economic Report of the President, which the council released Wednesday, highlighted a pilot program in Oregon for a tax motorists based on the number of miles they drive.
The Oregon program charges motorists who volunteer to participate in the program a 1.7 cents per mile for travel on roads and highways inside the state, with rebates or credits for state fuel taxes paid, according to White House officials.
“Though small, the program offers tangible evidence that a tax on vehicle miles traveled (VMT) is a promising alternative to relying on fuel taxes,” said the report.
Mr. Norquist said user fees should be approached cautiously. He warned that the money collected is often diverted to projects other than the road or bridge where they are collected, effectively converting the fee into a tax.
“You really have to check and see if it is a disguised tax,” Mr. Norquist said.
• S.A. Miller can be reached at smiller@washingtontimes.com.
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