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1 Joseph Henchman, Transportation Plan Proposes Business Tax but Secretary Floats Possibility of Tolls 1 (2014)

handle is hein.taxfoundation/taxfaaj0001 and id is 1 raw text is: TxS Transportation Plan Proposes FouNDATIoN Business Tax but Secretary Floats Possibility of Tolls May. 2014 By Joseph Henchman No. 430 Key Findings * Rising transportation expenses consistently outpace dedicated transportation revenues, with the 18.6 cent per gallon tax on gasoline stagnating as American driving plateaus and fuel economy improves. * Currently, federal gas and diesel taxes raise about $30 billion per year, and the federal government spend about $70 billion on surface transportation. The Highway Trust Fund will run out of money in August of this year. * The GROW AMERICA Act would boost highway and road spending by about 22 percent to $199 billion, boosts transit spending to $72 billion, and spends $19 billion on rail programs, for a total of $302 billion over four years. This will be enough to satisfy all the relevant transportation interests but still leaves funding unaddressed * The key proposed funding mechanism is an unspecified $150 billion one-time business tax. Because it is only one-time revenue, it does not address the fact that transportation spending is annual, large, and growing. * Additionally, the bill would remove the federal ban which prevents state from tolling interstate highways. * Relying more on tolls and less on general revenues means those who benefit from good transportation pay directly for it, like any other service. * The option to fund transportation with tolls would also reduce pressure to boost sales taxes, income taxes, and business taxes (including the Administration's problematic proposed changes to international business taxation).