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U.S. gasoline tax hike talk increases in Congress

January 9, 2015

By Richard Cowan

WASHINGTON (Reuters) – The possibility of a gasoline tax increase to help pay for federal highway improvements was attracting increased attention in the U.S. Congress as a prominent conservative Republican on Thursday said he was willing to consider the move.

Senator Orrin Hatch, the new chairman of the Senate Finance Committee that oversees tax measures, told reporters he has an “open mind” on raising the 18.4-cent-per-gallon tax levied at the gasoline pump.

“I prefer not to increase taxes, but to me that’s a user fee. People who use the highways ought to pay for them. And that’s a small price to pay to have the best highway system in the world,” Hatch said.

Nevertheless, the idea faces an uphill fight, especially in the House of Representatives.

A few years ago, Hatch was one of many Republicans to sign a pledge, circulated by the conservative Americans for Tax Reform, promising to oppose any income tax hikes or reductions in tax credits or deductions unless they were matched by reducing tax rates.

On Sunday, another prominent Republican, Senate Commerce, Science and Transportation Committee Chairman John Thune, said that no highway funding mechanism ideas should be taken off the table.

Also this week, the second-ranking Senate Democrat, Senator Dick Durbin, said now was the time to raise the tax but that it should be done in a way that does not penalize lower-income motorists.

Despite all the chatter in Congress at a time when gasoline retail prices have sunk to their lowest levels in more than five years, there was plenty of skepticism that a gasoline tax hike would actually be enacted.

President Barack Obama has refused to rally support, saying he would look at the idea if there was a groundswell. Many of his fellow Democrats in Congress would like to come up with a new funding mechanism for roads, bridges and mass transit projects.

And House Speaker John Boehner on Thursday noted to reporters that there likely were insufficient votes in his chamber to pass a gasoline tax increase.

“I’ve never voted to raise the gas tax,” Boehner said.

Improving fuel efficiency of vehicles driven in the United States has made it more difficult for Washington to rely on the tax to provide adequate revenues for road-building.

(Reporting By Richard Cowan; Editing by Alan Crosby)


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