Pony Up, Middle Class, for a Gas Tax

I like this new Barack Obama, this Obama unchained, opening the door to Cuba and being willing finally to kick a little sand in Republicans’ faces. But with the release of the budget Monday, we saw the limits of his liberation: He still won’t impose a tax, even the most justifiable and needed one, if it’s going to hit middle-income people.

I mean, of course, the gasoline tax. Obama wants to go big on infrastructure. So far, so good. But his way of paying for infrastructure expansion is a one-time, 14 percent tax on earnings that American corporations have stashed overseas. That’s a fine tax in principle, but it’s a one-shot thing. After the money from it runs out, this president (or the next one) and some future Congress will have to scramble to find another revenue source.

Now, before we go any further, let’s interject reality into this column. Infrastructure spending isn’t going anywhere anyway, not with this collection of reactionaries running Congress. So Obama is hardly the real culprit here. The party that took the lead in building the Interstate Highway System is now a party that would just let it crumble, basically, in order to prevent the members of the moocher class from driving on paved roads that they “didn’t pay for.”

Some people think, “Well, the Chamber of Commerce backs infrastructure spending, fer chrissakes, so surely that will bring Republicans around.” Don’t fool yourself. This is an issue, like immigration reform, which the chamber also backs, on which GOP legislators aren’t listening to the chamber at all. If anything, the energy is moving in the opposite and more extreme direction.

This past week, a coalition of 50 conservative groups—led by the Koch-backed Americans for Prosperity and Grover Norquist’s Americans for Tax Reform—wrote to members of Congress (PDF) urging them to cut back on (or maybe eliminate—the wording is a bit opaque, and undoubtedly intentionally so) that portion of federal transportation money that goes to public transit. Conservatives think mass transit is over-funded at the federal level. Looked at one way this is arguably true. Looked at my (rational!) way, it’s underfunded because we ought to be building far more of it—light-rail systems in car-reliant medium-sized cities and so on.

Now—as you’ve been reading, there are a few Republicans on the Hill who have recently spoken in favor of hiking the gas tax. Tennessee Senator Bob Corker says he’d go for it, provided offsetting tax cuts of some kind could be identified. More interestingly, Oklahoma Senator James Inhofe, R-Inferno, has said he’d consider a gas tax. That could mean something someday, but I think there’s very little chance that Mitch McConnell is going to allow this sentiment to snowball beyond just a few members, enough to make the party look “reasonable” and raise hopes of false expectations around those Brookings seminar tables.

So, the long and short of it is that Obama is not going to get an infrastructure bill. Leaning on that assumption, he and his budget people, I suppose, thought something like: Well, let’s put it on the table, and let’s connect it to revenue that is less politically electric than the gas tax, and at least that way the R’s won’t be able to bang our heads with “Obama and his tax-and-spend liberals are picking your pocket again!”

But two points, one narrow and one broader. The narrow point is that a strong case can be made for increasing the gas tax that could stand a chance of winning public support. Ronald Reagan pushed through a huge increase in 1983—at the time, the first hike in 24 years. Milton Friedman liked (or didn’t hate) the gas tax. It’s a “user tax,” he once said. Even conservative economists don’t mind those quite so much. It hasn’t been hiked since 1993, and with the price of gas right now so low, even a 12-cent increase would not be a killer for most people.

The second, broader point is this. Someday, some Democrat who wishes to take the reins of this great nation is going to have to level with the people and say look, you say in poll after poll that you want certain things—the preservation of Social Security without benefit cuts, more assistance for higher education, better day care, paid family leave. Fine. I want to give you those things. But they aren’t free. And the rich, even though they’re rich, only have so much to contribute. The top marginal tax rate just isn’t going to get much higher, and the corporate tax rate if anything should be lowered (although as loopholes are simultaneously closed). So you’re going to have to pay a little.

I wouldn’t necessarily recommend this for a campaign. But let us not forget that the husband of the putative Democratic nominee in 2016 got into office in 1993 and promptly raised taxes, and fairly substantially, on just about everybody. He survived politically, and the succeeding years were the best America has seen, economically, since the pre-globalization, pre-deindustrialization 1960s (for a host of reasons, obviously, not just the 1993 Clinton budget).

The Republicans can stand off to the side and scream no, but one of these days, and maybe fairly soon, the national mood will be right. People will be ready to pay, a little, for a service or good they want. And it will be passed, and it will work, and broad majorities will like it, and history’s dustbin will collect a few more bodies to repose alongside the corpses of those who said Social Security would never work or Bill Clinton’s tax hikes would destroy America.