Arkansas will soon raise its state gas tax by 3 cents per gallon to help pay for state road improvements. The tax hike--scheduled to go into effect Oct. 1--will impact not only drivers, but everyone else, as businesses are likely to pass the higher cost of doing business on to the general public.
Unfortunately, our pain at the pump may be far from over.
That's because there is talk in Washington about raising the federal gas tax by as much as 25 cents per gallon to help pay for infrastructure improvements. If this happens, Arkansas families may see an annual tax-burden increase of nearly $300 per household, according to a recent study.
Our elected officials in Washington should soundly reject this proposed tax increase that will impact the most vulnerable in our state, especially those on a fixed income and living paycheck-to-paycheck.
Instead of immediately looking to raise taxes, lawmakers in Washington should look to see if there are ways we could better spend our infrastructure dollars more wisely, and prioritize true national transportation and infrastructure needs. The Heritage Foundation found that around 29 percent of the national Highway Trust Fund isn't even spent on highway projects, but instead on things like ferry boats, driving simulators, boardwalks, and even a white squirrel sanctuary.
Besides better prioritizing federal infrastructure needs, policymakers could also reform outdated and costly regulations. Over time, regulatory requirements have exploded, and duplicative permitting processes required to complete infrastructure projects have driven up costs and caused lengthy delays to projects--by years, in some cases. It takes an average of 788 days to obtain a permit from the U.S. Army Corps of Engineers for some projects.
There are other reasons to avoid another tax hike.
After enacting the Tax Cuts and Jobs Act of 2017, most of us are paying less in taxes. According to the Joint Committee on Taxation, about two-thirds of all taxpayers will pay less in taxes this year with nearly half of all filers receiving a tax cut of $500 or more.
Here in Arkansas, the average middle-income family of four saved $1,535 in taxes in 2018, according to a study from the Heritage Foundation.
A gas tax hike threatens to undo this tax relief. According to one estimate, increasing the gas tax by 25 cents per gallon--as is currently being proposed--would claw back roughly 25 percent of the total benefit from tax reform, giving new meaning to the phrase "robbing Peter to pay Paul."
Some in Washington want us to believe that our only option is the status quo or raising taxes in order to help pay for better roads and bridges. That's a false choice.
Let's take these steps to cut regulatory red tape and use all the gas tax on roads and bridges rather than ask hardworking, taxpaying Arkansans to reach even deeper into their pockets.
------------v------------
Ryan Norris is Arkansas state director at Americans for Prosperity.
Editorial on 05/18/2019