February 26, 2018
Federal gas tax hike? Potential impact to businesses in TX.
Fuel taxes are important. These taxes help fund the nation’s infrastructure, they fund bridge and highway updates. They exist at both the federal and state levels throughout the country.
There is concern that the current gas tax is too low. The federal gas tax is just over 18 cents. It has been at this same rate for over twenty-five years. When analysts take inflation and the increased fuel efficiency of today’s cars into account, they find the overall funds gathered from this tax are often not enough to meet the country’s roadway repair and expansion costs.
So what’s the answer? It is not likely that our roadway costs will decrease. This leaves two options: either the funding comes from elsewhere or Congress increases the gas tax.
President Donald Trump recently stated that he would support an increase of the federal gas tax from 18 cents to 25 cents. Those in favor of the tax state it would help fund much needed road repairs. They point to needed expansion and bridges that are at or past their anticipated life expectancies for support. Those against the tax note that it is a regressive tax. It is applied to everyone exactly the same way, regardless of income levels. The impact will be much more difficult to manage for lower income Americans compared to high earners.
How would a tax increase impact TX businesses?
If President Trump follows through on his statement, business in Texas will be impacted. The increase is a federal tax increase, not a state tax. As such, every state in the country will be subject to the change. Any business that uses vehicles as part of its operations will need to budget for this increased cost. Any business that operates in the fuel market will also need to take this change into account.