March 12, 2015 12:45 PM, EDT

ARTBA Says Raise Fuel Tax 15 Cents, Give Taxpayers Rebates

The nation’s road builders have proposed that Congress hike the federal diesel and gasoline tax 15 cents a gallon and offset the cost for low- and middle-income people with tax rebates.

There would be no rebates, though, for truckers buying diesel at 39.4 cents a gallon compared with the current tax of 24.4 cents a gallon. The gasoline tax currently is 18.4 cents a gallon.

The fuel-tax increase would generate enough new revenue to pay for a six-year, $401 billion transportation reauthorization bill, the American Road and Transportation Builders Association said. ARTBA made the proposal March 12.

The current transportation funding law, MAP-21, was temporarily extended last year, but that extension expires May 31.

Congress has yet to come up with a new funding plan and needs about $15 billion a year in additional revenue from the fuel tax or some other source to keep the Highway Trust Fund solvent.

“Over the last seven months, we have seen little progress on how Congress is going to resolve this $15 billion-plus-a-year problem,” ARTBA President Pete Ruane said.

“In fact, in recent weeks, we’ve been hearing hints from Capitol Hill, that quote ‘We might need another short-term extension,’ end of quote.”

ARTBA said its fuel-tax increase would generate enough new revenue to pay for a six-year, $401 billion transportation reauthorization bill.

Under ARTBA’s proposal, single tax filers with an adjusted gross income of $100,000 or less would receive a $90-per-year tax rebate, which ARTBA said would be the average annual cost to them of a 15-cent gas-tax increase.

Joint filers with adjusted gross incomes of $200,000 or less would receive a $180 rebate, ARTBA said.

Ruane said ARBTA is offering a “political solution” to the “perceived” political debate over how to pay for a new transportation bill.

The ARTBA plan, however, could provoke heated debate in Congress.

The rebates, for example, would only last for the life of the transportation funding bill, but the 15-cent fuel-tax increase would be permanent.

Also, the rebates would come from the general fund at a cost of $103.3 billion over six years, meaning Congress would have to find an offset such as cuts to other programs or some new revenue source.

Lastly, the rebate would go to all those making less than $200,000 a year, not just to those who own vehicles.

ARTBA suggested that one way to pay for the rebate would be repatriation, offering American corporations a deal under which they agree to pay the taxes owed on their overseas profits but at a lower rate than now required.

President Obama, along with some members of Congress, has suggested that such repatriated funds be used to pay for a new transportation bill.

Those who oppose repatriation, however, call it a tax holiday because American corporations would get a large tax break on their overseas profits.