Two Koch brothers groups urge Trump to reject a gas tax increase; no mention of diesel
January 29, 2018
Freedom Partners and Americans for Prosperity, both funded by the Koch brothers, are urging the Trump Administration to oppose any increase in the gas tax. The appeal to Trump comes before expected announcements from the administration regarding the highly anticipated infrastructure bill and how it will be funded.
In a letter to President Trump, the two groups urged Trump to specifically oppose any gasoline tax increase proposal, including one submitted by the U.S. Chamber of Commerce that would increase the gas tax from 18.4 cents to 43.4 cents.
The two groups claim that a gas 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 gas tax will cut back “roughly 25 percent of the total benefit from tax reform.” According to the letter, the average household consumed 1,140 gallons of gas in 2016. The proposed gas tax increase translates to an extra $285 on gasoline each year based on those numbers.
“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. Furthermore, 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.
Furthermore, the language in both the news release and letter to Trump refers to a “gas tax” and mentions only gasoline taxes. There is no indication of whether or not the groups extend their opposition to diesel taxes as well. Neither group was immediately available for comment.
According to a Freedom Partners news release, the group has successfully stopped gas tax increases in Alaska, Arkansas, Colorado, Kansas, Louisiana, Mississippi, Oklahoma and Wisconsin.
Americans for Prosperity noted in its news release that the Government Accountability Office found that less than 50 percent of Highway Trust Fund expenditures went toward roads and bridges.
“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.
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.