Gas tax hike could be part of fiscal cliff solution

Wonder why no one has brought this up in the Washington fiscal cliff talks?

Gas tax hike could be part of fiscal cliff talks: "Currently at 18.4 cents a gallon, the federal gas tax is used primarily to build and repair roads, bridges and other transportation infrastructure. The tax raises about $32 billion a year. But that's not enough. The government hands out about $50 billion a year to states and towns to help with road costs. The difference comes out of general funds or has to be borrowed. Meanwhile, the gas tax hasn't been raised since 1993. "Establishing a sustainable resource base for transportation needs to be part of any grand bargain," said Emil Frankel, a former transportation expert in the George W. Bush administration and now director of transportation policy at the Bipartisan Policy Center. "In the short run, raising the gas tax is the best way to do that." Raising the gas tax was one of the recommendations of the Simpson-Bowles debt reduction plan in 2010. The plan called for a 15 cent-a-gallon hike to the gas tax, a level that would basically cover the current shortfall in the transportation budget. Others went further. In a 2010 letter to the commission Delaware's Democrat Senator Tom Carper and former Ohio Republican George Voinovich proposed a 25 cent-a-gallon hike in the gas tax, with the additional 10 cents a gallon going toward debt reduction. The pair estimated it would generate $83 billion over five years to chip away at the debt, and an additional $117 billion for road repairs. . . ."

25 cents sounds about right considering inflation since 1993.

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Fiscal Cliff: The Solution is Obvious

An open letter to Tim Geithner on how to dodge the next debt crisis - The Washington Post: "The solution is obvious, along the lines that my colleague Geoff Colvin and I proposed in September: broadening the tax base so that we can lower rates while increasing tax revenue; treating income from capital and work the same way; and trimming the growth of entitlement programs such as Social Security and Medicare, especially for people like me who are well off. Much of this has become the conventional wisdom in Washington — and it’s actually wise."

So why is Washington having such a problem with the fiscal cliff?

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