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The U.S. federal Highway Trust
Fund is the mechanism by which the government raises funds for highways and
other necessary transportation infrastructure, and it is funded primarily by
taxes on motor fuels. The current tax of 18.3 cents per gallon for gasoline and
24.3 cents for diesel fuel was last raised in 1993.
Due to a number of
factors, including increased vehicle fuel efficiency and much higher
construction costs, the amounts raised by the current tax have been woefully
insufficient to fund the Trust Fund for many years. This problem is likely to
be exacerbated by the increased use of electric vehicles.
Rep. Shuster proposes the formation
of a Highway Trust Fund Commission that would be charged with recommending to
Congress long-term solutions to the problems. The Commission’s recommended
legislation would be submitted for an expedited up or down vote by Congress
with no amendments.
Shuster also proposes that the
federal government undertake a pilot program to evaluate shifting from a
per-gallon fuel tax to a per-mile user fee based not on consumption, but on
miles driven. Similar test programs have
been done in several states in recent years, including Oregon and Colorado. This
shift would address the problem presented by higher miles-per-gallon fuel efficiency,
and the advent of electric vehicles. The proposal would also impose a 10% user
fee on the wholesale price of electric batteries used to propel motor vehicles.
To provide increased funding
while these other proposals are being evaluated, Shuster would temporarily
increase the gasoline tax by 15 cents per gallon, to 33.3 cents, and the diesel
tax by 20 cents to 44.3 cents per gallon. These increases would be phased in
over three years, would then be indexed for inflation, and would expire in
2028. According the Joint Committee on Taxation, the gasoline tax increase
would raise $194.4 billion over ten years, and the diesel tax increase would
raise $85.7 billion.
Although it is unlikely that
Shuster’s proposal will be enacted in full during this year’s Congress, it will
provide a base for Transportation Committee hearings and other activities
related to the Highway Trust Fund, which expires periodically and must be
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Fuel costs are a major cost
involved in the movement of household goods and other expenses related to the
relocation of employees. The Shuster proposal would significantly raise those
costs. Although a hike in fuel taxes is long overdue according to most
transportation industry sources, companies will need to plan for the increased
costs if the proposal is accepted.