President Donald Trump said he’s willing to raise the U.S. gas tax to fund infrastructure development and called the tax-overhaul plan he released last week the beginning of negotiations.
“It’s something that I would certainly consider,” Trump said Monday in an interview with Bloomberg News in the Oval Office, describing the idea as supported by truckers “if we earmarked money toward the highways.”
Trump released a tax plan on April 26 that would cut the maximum corporate tax rate to 15 percent from the current 35 percent. The same reduced rate would apply to partnerships and other “pass-through” businesses.
He said he is willing to lose provisions of his tax plan in negotiations with Congress but refused to specify which parts. He also repeated his call for a “reciprocal tax,” which would be aimed at imposing levies on imports to match the rates that each country charges on U.S. exports.
“Everything is a starting point,” Trump said of his tax plan.
The Trump proposal also would eliminate the alternative minimum tax and the estate tax, cut individual income-tax rates and repeal an investment-income tax for high earners, fulfilling a conservative wish list from the past several years.
The one-page plan was silent on both a gas tax or the notion of a reciprocal tax. Trump said he has made no commitments on an increased gas tax but, “it’s something I would certainly consider.”
Declining Revenue
The federal per-gallon taxes of 18.4 cents on gasoline and 24.4 cents on diesel were last raised in 1993. Since then, revenue from the fuel levies has declined as inflation robbed them of their purchasing power and the average fuel economy of a passenger vehicle increased by 12 percent, according to the U.S. Department of Transportation.
Business and transportation groups have called for increasing the federal gas tax for years to help sustain and increase funding that flows to states through the Highway Trust Fund, which Congress has kept solvent with transfers from other sources. The trust fund is projected to become insolvent by 2021 without additional funding, according to the Congressional Budget Office.