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Narrowly Avoiding The Gas Tax Trap, Moderate Democrats

Narrowly Avoiding The Gas Tax Trap, Moderate Democrats

President Joe Biden's White House spent much of the weekend and Monday killing the idea of incorporating a gas tax increase into a bipartisan infrastructure deal, potentially saving the Democratic Party from a massive unforced political error.

“That is a nonstarter,” White House press secretary Jen Psaki said during her daily press briefing, noting that it would violate the president’s pledge not to raise taxes on people earning less than $400,000 per year.

Psaki's removal of any wiggle room provided relief to Democratic strategists who had quietly worried about the possibility of two vulnerable Senate Democrats up for reelection in 2022 endorsing a gas tax hike, an idea that public and private Democratic polls show is deeply unpopular with voters.

The near-mistake, which was included in an outline of the bipartisan infrastructure proposal released last week, demonstrated how moderate members of Congress routinely assume ideas popular with interest groups in Washington are also popular with the voting public. It also demonstrated how Democrats are significantly more politically exposed to a potential backlash in any partisan infrastructure proposal.

It's unclear how close a gas tax increase came to being included in the still-developing agreement, which could channel close to $600 billion toward the nation's infrastructure needs. Senators from both parties said an increase was off the table as of Monday night, as the provision would have raised a relatively paltry $30 billion over ten years.

According to a spokesperson, Arizona Sen. Mark Kelly, one of the vulnerable Democrats negotiating the package, would have voted against a hike.

“Senator Kelly does not support an increase in the gas tax,” Kelly spokesperson Jacob Peters said in a statement to Stardia. “He is continuing to work with Republicans and Democrats to advance Arizona’s infrastructure priorities and ensure these investments do not fall on the shoulders of working families.”

Sen. Maggie Hassan of New Hampshire, the other Democrat facing a potentially difficult reelection battle who is part of the group negotiating the plan, did not respond to requests for comment.

Indexing the gas tax to inflation has clear policy benefits. Transportation policy wonks have long agreed that road users, whether they are everyday commuters or the trucking industry, should bear the majority of the cost of maintaining and building highways and bridges.

Unlike most taxes, the federal gas tax is levied on a per-gallon basis, which means that the value of the revenue it generates diminishes over time; since the 1993 increase that brought the levy to its current 18.4 cents per gallon, the levy has lost roughly two-thirds of its purchasing power.

As a result, the gas tax has long attracted support from interest groups on both sides of Washington’s political divide, with supporters pointing out that both the AFL-CIO and the Chamber of Commerce support raising it. But there’s one problem: the public dislikes the idea, with two-thirds of the population regularly opposing it.

“The gas tax is the quintessential issue that Beltway people want voters to think is good, but voters absolutely despise,” said Sean McElwee, founder of the progressive polling firm Data for Progress.

Data for Progress polls and nonpartisan polls have consistently shown that voters strongly prefer raising the corporate tax rate to pay for an infrastructure plan; however, that idea has far less support among Washington interest groups, and Republicans have ruled out any changes to their 2017 tax law.

Many Democratic strategists believe the party should pick a fight over corporate taxes, which moderate Democrats are likely to avoid in the interest of bipartisanship.

“It’s absurd that we’re talking about raising gas taxes, user fees, and putting it on everyday Americans rather than asking the world’s largest corporations to pay their fair share,” said Tyler Law, a principal at AKPD Message and Media.

The potential political pain for Kelly and Hassan exposed another dynamic that could shape the still-fragile bipartisan negotiations. Democrats are set to defend four Senate incumbents widely regarded as vulnerable in 2022: Kelly, Hassan, Georgia Sen. Raphael Warnock, and Nevada Sen. Catherine Cortez Masto, with Kelly and Hassan almost certain to vote for any eventual infrastructure deal.

Republicans are defending open seats in Pennsylvania and North Carolina, as well as Wisconsin Sen. Ron Johnson and Florida Sen. Marco Rubio, and there is little chance that either Johnson or Rubio will vote for an eventual deal, which means Democrats are taking on significantly more short-term political risk than Republicans by embracing any politically risky parts of a bipartisan agreement.

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