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Some Experts Favor Gasoline Tax Hike to Add Revenue

By    |   Thursday, 29 Nov 2012 09:46 AM

As Democrats and Republicans prepare to resume negotiations on the fiscal cliff Thursday, some experts recommend an increase in gasoline taxes to raise revenue.

Federal gas taxes currently total 18.4 cents a gallon, generating $32 billion a year, CNNMoney reports. That money is used to improve the transportation infrastructure, including roads and bridges.

But that doesn’t cover all of the states and cities’ costs for the upgrades. The rest comes from the federal government’s general funds and/or borrowings. At the same time, gas taxes haven’t increased since 1993.

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The Simpson-Bowles deficit reduction committee recommended a gas tax hike of 15 cents per gallon two years ago to cover the $50 billion annual transportation deficit.

And Emil Frankel, director of transportation policy at the Bipartisan Policy Center, agrees.

"Establishing a sustainable resource base for transportation needs to be part of any grand bargain," he tells CNNMoney. "In the short run, raising the gas tax is the best way to do that."

Some experts advocate a carbon tax, though the Obama administration has indicated it won’t seek one.

“Major studies, including one from the non-partisan think tank Resources for the Future, show that a tax on carbon is better for overall U.S. economic growth than the current mix of higher taxes on work and capital that a carbon tax could displace,” consultant Paul Bledsoe, a staff member of President Bill Clinton’s Climate Change Task Force, writes in The Hill.

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As Democrats and Republicans prepare to resume negotiations on the fiscal cliff Thursday, some experts recommend an increase in gasoline taxes to raise revenue.
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Thursday, 29 Nov 2012 09:46 AM
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