President Obama Warming Up to Hike in Federal Gas Tax

Washington, D.C. – While gas prices continue to rise both as a result of the summer driving season and the turmoil in Iraq following America’s hasty withdrawal of forces from Iraq, President Obama is now beginning to embrace the idea of supporting an increase in the federal gas tax.

Thus far, the tax increase would stand little chance of passage given the dominance of the GOP in the House of Representatives, but that hasn’t stopped a small bipartisan effort from starting to create a renewable highway trust fund supported by a 12 cent increase in the gas tax. At issue is the current fund of $164 billion will be exhausted soon. President Obama wants to fund a new $302 billion fund, but the GOP is insisting the measure be funded to avoid exacerbating the deficit.

Officially, the Obama administration does not support the idea of a hike in the gas tax. Such measures have largely been unpopular with the general public who are loathe to see prices at the pump rise. The measure can also been seen as a regressive tax as it hits lower income people harder than it does the wealthy.

“The Administration has not proposed and has no plans to propose an increase in the gas tax,” said White House spokesman Matt Lehrich, when asked about the alternate pay-for. “It is critical that we pass a bill that not only avoids a short-term funding crisis but provides certainty and lays the groundwork for sustained economic growth. So we appreciate that members on both sides of the aisle continue to recognize the need for a long-term infrastructure bill, and we look forward to continuing to [work] with Congress to get this done.”

At the same time, the Obama administration hasn’t said it would veto the measure if it were approved by the house and senate. The GOP is bound by a no-tax pledge, but believes that the proposal by conservative Tennessee senator Bob Corker and Connecticut senator Chris Murphy does not violate that pledge. This is because the increase in the taxes upon all Americans would be offset by closing tax breaks on certain corporations. It is funny how political machinations work when senators propose raising taxes on everyone isn’t a net increase in taxes because they were also increased on a smaller minority. The purpose of the no-tax pledge was to not burden taxpayers.

Average retail gasoline prices in New York have risen 4 cents per gallon in the past week, averaging $3.90 per gallon Sunday.

This compares with the national average, which has increased 2.6 cents per gallon in the last week to $3.68, according to gasoline price website

Gas Tax Hike On The Way?

Gas Tax Hike On The Way?

“While concerns in Iraq have led to higher prices in many areas across the nation in the last week, a new concern has come to light: a possible increase in the federal gasoline tax,” said Gasbuddy analyst Patrick DeHaan. “Suddenly, there are a few different situations that bear monitoring that could have an impact at the pump: Iraq, the Feds (raising gas taxes), and the peak of hurricane season, which is coming soon. While this week at the pump could be a quiet one, especially if there’s no major Iraq news, motorists still face the threat of higher prices later in the summer, and watching lawmakers debate raising gasoline taxes certainly is worth monitoring,” DeHaan said.

The national average has increased 4.6 cents per gallon during the last month and stands 10.9 cents per gallon higher than this day a year ago.


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