Tags: low | gas | prices | higher | taxes | economy

Lower Gas Prices Spur Push for Higher Taxes

By    |   Thursday, 08 Jan 2015 09:56 PM

Gasoline prices have plummeted across the nation, and the drop is giving rise to the prospect of higher taxes that can help pay for road projects.

The Wall Street Journal reports that states are now considering raising gas taxes, a move they say would help boost the construction industry by creating jobs. The extra money would be used to repair roads, bridges, and other vital pieces of the highway infrastructure.

Iowa Gov. Terry Branstad, reports the Journal, is looking into a plan to raise the state's gasoline tax — which hasn't been touched since 1989. Branstad's GOP colleagues in the Michigan state Legislature already have a plan in the works to do the same.

Republicans in the Utah Statehouse are considering raising the gas tax to help make up a gap created by spending too much on transportation, reports the Journal.

And in Washington, Republicans and Democrats in the Senate are thinking of raising the federal gas tax. Right now it sits at 18.4 cents a gallon, a figure that's been in place since the first year of the Clinton administration.

The gas tax in some states, according to the Journal, is up to 50 cents a gallon.

A poll last month, meanwhile, said 45 percent of Americans thought gas prices were still too high. The national average at that point was $2.62 gallon. The latest numbers, according to AAA, show the current average to be $2.18 a gallon — a stark contrast to the figure of $3.31 a year ago.

The low gas prices are leading to higher sales of gas-guzzling vehicles like SUVs and pickup trucks.

"The fall in gasoline prices is something of a double-edged sword," Wall Street financier Steven Rattner told the Journal last month. "It's great for consumers, which is the most important piece. But it also encourages sales of SUVs and other gas guzzlers, which makes increasing fuel economy harder."

This week, the price of crude oil dipped below $50 a barrel for the first time in more than five years. Both the Dow Jones industrial average and the S&P 500 index dropped as a result.

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Gasoline prices have plummeted across the nation, and the drop is giving rise to the prospect of higher taxes that can help pay for road projects.
low, gas, prices, higher, taxes, economy
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2015-56-08
Thursday, 08 Jan 2015 09:56 PM
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