Some members of Congress – apparently intent on ensuring that no positive development in American life goes unpunished – have had a surprising reaction to the steep decline in gas prices that has taken place in recent months: It’s time to make fueling your car more expensive.
That’s the message coming from many Democrats and a handful of Senate Republicans – foremost amongst them Tennessee’s Bob Corker, who joined with Connecticut Democrat Chris Murphy to propose increasing the levy by 12 cents over two years and indexing it to inflation. Other members of the GOP – Sen. John Thune of South Dakota and Sen. James Inhofe of Oklahoma, for instance – have refused to rule out such a proposal.
We’re not unsympathetic to the underlying concern in this case. The federal gas tax – currently 18.4 cents per gallon – hasn’t been raised since 1993. That’s salient because the revenue from the tax goes to finance the Highway Trust Fund, the mechanism by which the feds fund transportation infrastructure projects. Without a doubt, these kinds of expenditures represent a legitimate use of public money.
Equally unquestionable is that there are serious problems besetting the fund. Current estimates have it facing a shortfall of $160 billion over the next decade. Moreover, much of the country’s infrastructure is in dire need of a facelift.
However, this is more than a question of simple economics. It’s a question as to how best to organize public finance. We believe that federal money ought only to be spent for truly federal purposes. On that front, the Highway Trust Fund falls short.
Originally organized to finance the Interstate Highway System – a genuinely federal project if ever there was one – the fund now suffers from severe mission creep. About a quarter of its revenues aren’t even spent on highway projects, going, instead, to decidedly local concerns like mass transit or bicycle paths. According to congressional testimony from the Cato Institute’s Chris Edwards, that spending adds up to about $9 billion a year.
As John Marshall observed, “the power to tax is the power to destroy.” That’s why we regard any proposal for higher levies with caution. We believe that tax increases are only ever justified when the federal government can prove three things: 1) That it is only spending public money on legitimate public purposes; 2) that it is not spending public money on tasks better left to state and local governments; and 3) that it is spending public money efficiently. The Highway Trust Fund fails on all three counts.
Washington should tighten its belt and devolve financial responsibility for non-national projects back to state and local governments before taking more money out of taxpayers’ pockets.
We pay enough at the pump without having to subsidize Congress’ incompetence.
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