Koch brothers groups confirms opposition to diesel tax as well as gasoline tax
February 1, 2018
Last week, political advocacy groups Americans for Prosperity and Freedom Partners sent a letter to President Donald Trump urging him to oppose any increase in the federal “gas tax.” It was unclear whether or not that included diesel. Land Line has confirmed that the two groups oppose any federal fuel tax increase, including diesel.
Earlier this week, Land Line reported the Koch brothers-funded group’s push to stop what both the letter and news releases referred to as a “gas tax.” When citing current taxes, the groups only referred to the 18.4-cent gasoline tax and made no mention of diesel. Neither group could be reached for comment at the time.
Since then, Gabrielle Braud, a spokeswoman for Americans for Prosperity, has confirmed to Land Line that the group does in fact oppose an increase in the diesel tax.
In the letter to Trump, the groups singled out a proposal by the U.S. Chamber of Commerce that would increase the gasoline tax by 25 cents. That same proposal would also raise the diesel tax by 24.4 cents.
The two groups claim that a fuel tax increase will undermine the recent tax relief millions of Americans received under the Tax Cuts and Jobs Act. In fact, the letter suggests that raising the fuel tax will cut back “roughly 25 percent of the total benefit from tax reform.”
“Efforts to improve our nation’s infrastructure should focus on maximizing taxpayer dollars by targeting priorities such as roads and bridges, eliminating wasteful spending, removing regulatory barriers that delay projects and drive up costs, and ensuring there is proper oversight and accountability,” the letter says. “Increasing the federal gas tax to fund new infrastructure projects would be the wrong approach.”
However, the groups do not offer an alternative source of funding in the letter. There has been no indication that the Trump administration has plans to increase any fuel taxes. A recently leaked outline of the White House’s infrastructure plan makes no mention of fuel taxes or the Highway Trust Fund.
In a separate news release, Americans for Prosperity did have one possible solution: Transportation-generated revenue should go toward infrastructure.
“Instead of looking to tax you more at the pump, lawmakers should allocate the money they have in a more responsible way,” Americans for Prosperity said in a statement.
During the State of the Union address on Tuesday, President Trump briefly mentioned infrastructure, including increasing money generated for investment from $1 trillion to $1.5 trillion. So far, the federal government has hinted at providing only $200 billion of that $1.5 trillion, with no information regarding where that money will come from. The Chamber of Commerce’s proposal could generate $375 billion over the next decade.
The federal gas tax was first introduced in 1932 with a 1-cent per gallon tax. Currently, the federal tax on gasoline is 18.4 cents, which was established in 1993. The last gas tax increase 25 years ago did not include language that would adjust the tax to inflation.
The Owner-Operator Independent Drivers Association believes the fuel tax is the most equitable way to generate revenue.
One solution Americans for Prosperity mention in its news release is to repeal the Davis-Bacon Act. Established in 1931, the Davis-Bacon Act applies to contractors and subcontractors performing on federally funded or assisted contracts in excess of $2,000 for the construction, alteration, or repair of public buildings or public works, according to the Department of Labor. Contractors and subcontractors must pay their laborers and mechanics employed under the contract no less than the locally prevailing wages and fringe benefits for corresponding work on similar projects in the area.
According to a study cited by Americans for Prosperity, repealing the Davis-Bacon Act would save $13 billion over the next decade, enough to pave 1,200 miles of new highway.
Both Freedom Partners and Americans for Prosperity are considered conservative 501(c)(4) non-profit political advocacy groups with direct ties to David and Charles Koch. Americans for Prosperity is funded by the Koch brothers and is considered their primary political advocacy group. Freedom Partners is partially funded by the Koch brothers, with every board member currently working or having previously worked for the Koch brothers.