A report from Daniel Clifton, Strategas Research’s head of policy research showcased just how destructive the Gary Cohn, Donald Trump backed Gas Tax could be.
Raising the federal tax on gasoline would help erase 60 percent of the benefit from the tax breaks President Donald Trump signed into law late last year, according to a new report from Daniel Clifton, Strategas Research’s head of policy research.
President Trump reportedly endorsed the idea of raising the gas tax, currently 18.4 cents per gallon, by 25 cents. Gary Cohn, the former Goldman Sachs executive who is now one of Trump’s top economic advisers, has reportedly raised the idea with lawmakers.
The government already expects gasoline prices to rise by 20 cents per gallon, according to Clifton.
“The proposed gasoline tax increase adds another $0.25 per gallon. The combined $0.45 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 research note. The Strategas analysis was first reported by CNBC’s Patti Domm.
Looked at another way, the proposed tax would more than wipe out all of the gains workers are expected to see from the corporate tax cut. Clifton’s analysis indicates that the cost of an increase in gasoline prices due to the tax would be nine times greater than the estimated $4 billion workers are expected to receive from employers due to the corporate tax cut.
Two days ago we covered Trump’s backing of the Gas Tax. Here is what I wrote.
So we have a few things to look here. The first is if its a good way to pay for Infrastructure spending. My answer to that would be yes. Cars on the road are using the infrastructure so the more you use the roads the more you would pay through the gas tax. This doesn’t mean however that I support this initiative. Republicans just gave working-class families a big beautiful tax cut. Taking that money back by forcing them to pay more for gas is an awful idea.
Trump needs to look in the mirror and realize forcing Americans to front the bill for infrastructure is a poor idea. He needs to allow the States to handle their own infrastructure issues and make sure they create as many jobs within their own communities as possible. Privatising infrastructure wouldn’t be a bad idea either if handled at the State level.
It seems that my initial intuition of this Gas Tax is a bad idea is now supported by the facts. The study mentioned above showcases that this Tax would basically do away with the good of the Tax Cut. This Gas Tax wipes 60% of the savings from the Tax Plan and will almost certainly anger those who have turned to Trump over its success.