A 25-cent gasoline tax, reportedly endorsed by President Donald Trump, would help wipe out 60 percent of the benefit from the tax breaks he recently signed into law for individuals, according to Strategas Research, CNBC reports.
Daniel Clifton, Strategas’ head of policy research, said the increase in gasoline prices would also be nine times larger than the estimated $4 billion workers are receiving from employers due to the corporate tax cut.
The gasoline tax, now 18.4 cents per gallon, has not been raised since 1993 when Bill Clinton was in the White House. Gary Cohn, White House economic advisor, has been discussing a gasoline tax raise.
Government data already show an increase in gasoline prices of 20 cents per gallon this year, costing consumers about $34 billion, Clifton noted.
“The proposed gasoline tax increase adds another $0.25 per gallon. The combined $0.45 per [gallon] increase in gasoline prices eats away $71.6 billion from the $120 billion in individual tax cuts, or 60 percent of the net tax savings for consumers,” Clifton wrote in a note.
Trump reportedly endorsed hiking the federal gas and diesel tax by 25 cents. Democratic Sen. Tom Carper of Delaware said Trump said he’d be willing to provide leadership on the increase to pay for improvements to roads, highways and bridges.
The average national price of gasoline Thursday was $2.55 per gallon, down from $2.60 a week ago, but well above last year’s $2.28 per gallon, according to AAA. Diesel fuel was selling for an average $2.98 per gallon, up from $2.51 per gallon a year ago.
For an average family, the proposed 25-cent jump in the gasoline tax could become noticeable quickly. For instance, a 12-gallon fill-up would cost $3 more with the new tax. Read more at CNBC.