Repatriation Tax Holiday Is Not a Fix for Highway Trust Fund Insolvency
All over the United States, construction crews are shaking off the winter cold and gearing up for a busy season repairing and expanding our transportation infrastructure. Yet, one ominous question remains: Will the Highway Trust Fund have enough money to keep them on the job?
The most recent estimates by the U.S. Department of Transportation show the trust fund running short before the end of the fiscal year. Moreover, as cash balances dwindle, the department will begin holding reimbursement payments to states. When the dollars run out, pink slips will soon follow — an unnecessary bit of self-inflicted economic pain.
The Highway Trust Fund faces major structural deficits stemming from dramatic improvements in vehicle fuel efficiency. As cars consume less gas, they also pay less in federal gas taxes, which are the main revenue source for the Highway Trust Fund. Meanwhile, federal gas tax rates have remained constant since 1993. By model year 2025, fuel economy will nearly double to 54.5 miles per gallon, meaning the current gas tax will be even less adequate. Congress needs to provide stable, long-term revenue for the trust fund.
Read more here.
This article was originally published in Roll Call.
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