Now that oil has fallen below $85 a barrel, and with America's highways and mass-transit systems starved for funding, is anyone in Washington sensibly calling for a gas tax increase?
Of course not. Raising the gas tax is bad politics. But the economic case for a gas tax hike is compelling.
Many economists believe that public infrastructure investment that expands economic capacity is the best hope for shaking the U.S. economy out of its doldrums. The federal gas tax is the primary source of highway and mass-transit funding, but Congress hasn't increased it since 1993. Inflation has since cut its value by 40 percent, and rising fuel efficiency has also reduced its value.
Last summer, Congress had to punt on a long-term transportation-funding bill because there was no money to pay for it. Instead, lawmakers came up with a 10-month fix, which means they will have to deal with this issue again in the spring.
Editorial on 10/20/2014