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Congress claiming no tax increases

October 5, 2012
The Inter-Mountain


From the outset, the Obama administration and Republican leaders agreed on one point. Neither would support a tax increase. The Obama administration said it would not raise taxes during the recession and Republicans oppose tax increases on principle.

Now, at about this same time the Transportation Surface Committee came up with the idea of VMT's, but as it was brought forward it turned out to be a non-starter for both sides, as well as the president. During the next three years of negotiations, legislators occasionally talked about a VMT tax. Highway user groups such as the American Trucking Association were pushing for a fuel tax increase, but such talk amounted to bubbles that floated briefly on a pond and then popped.

The Senate Finance Committee, for example, flirted with the issues when Sen. Michael Enzi, R-Wyo., offered and withdrew the idea of indexing the fuel tax with the rate of inflation. This drew rhetorical support from senators on both sides of the isle, and the chairman of the committee, Sen. Max Baucus, D-Mont., indicating that the idea has a future. You all need to remember this. He stated "that when unemployment comes down and housing starts to make a strong come back, this will be on the table for further action."

Baucus will have the opportunity to follow up on this very soon, as MAP-21 is set to expire Sept. 30, 2014. This means that Congress needs to start hearings for the new bill after the election in November.

They also need to remember that the funding mechanisms that were cobbled together for this present law amount to a one-time funding change that will be hard to replicate the next time around. Congress had to supplement the Highway Trust Fund by transferring $19 billion from the general fund and $2.4 billion from a unknown fund called the Leaking Underground Storage Tank Trust Fund. Offsets for these came from changes in accounting for the pension interest rates and Pension Benefit Guarantee Corp. premiums. Now I don't know about you, but all this movement of funds and creative accounting seem very shady to me.

To keep the law funded they need, by their own account, $50 billion a year. By the accounting and looking at what they are supposed to have cobbled together, they only have $21.4 billion by my account. Where is the other $28.6 billion going to come from? So if Congress claims that they are not going to raise taxes, you just need to do the math and you have your answer.

We are the ones that will end up paying for this, either at the pumps or through raising the price of vehicle fees, taxes on new tires and batteries along with registration fees for your vehicles. If this is not a tax, I don't know what is.

Mike McRae




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