The House Transportation and Infrastructure Committee held hearings last week on funding options for the administration’s $1.5 trillion infrastructure investment plan. It didn’t take long for the gas tax issue to move into the spotlight.
Transportation Secretary Elaine Chao told lawmakers that no decisions have been made on how to pay for the proposal. She added that all funding options, including a gas tax increase, are on the table. Ranking Member Peter DeFazio (D-OR) criticized the lack of progress on identifying pay-fors.
Both DeFazio and Chairman Bill Shuster (R-PA) called on the president to engage more on infrastructure and resolve the funding question since states cannot be expected to shoulder all the costs. In DeFazio’s view, without a gas tax increase, the infrastructure plan is dead in the water. Rep. Sam Graves (R-MO) argued that raising the gas tax is simply not politically feasible.
Senate Democrats have unveiled their own $1 trillion infrastructure plan, which proposes to roll back some of the tax cuts enacted last year to help pay for investments in the country’s roads, waterways, broadband network, and transit systems. The top revenue-raisers in the plan include the following:
- Restore 2017 parameters to the Alternative Minimum Tax (raises $429 billion)
- Increase the corporate tax rate to 25% (raises $359 billion)
- Return the top individual tax rate to 39.6% (raises $139 billion)
- Eliminate the exemption increase for the estate tax (raises $83 billion)
- End the preferential tax treatment of carried interest (raises $12 billion)
Committee hearings may be the only legislative action that infrastructure proponents will see in 2018. House Ways and Means Chairman Kevin Brady (R-TX) has no near-term plans to work on an infrastructure package. Brady wants to wait until there are actual pay-fors on the table, and he is leaving that task for the authorizing committees. So unless some serious financing options crop up soon, lawmakers are unlikely to move legislation this year.