May 8, 2017

WE ARE ALL NEOCONOMIST NOW:

Raising the Gas Tax Is No Longer Taboo In Many States : Nearly half the states have increased fuel taxes in the past five years, suggesting it's perhaps not the political risk it was once thought to be.  (DANIEL C. VOCK, MAY 8, 2017, Governing)

While raising the gas tax is still a politically treacherous idea in Washington, lawmakers in state capitals are increasingly coming around to it. Already this year, governors in California, Indiana and Tennessee signed laws to raise fuel taxes, meaning a total of 22 states have passed laws imposing higher gas taxes in the past five years. Chances are also good that the list will grow even longer this year.

"It is such an unusual thing to see nearly two dozen states boosting taxes in such a short amount of time," says Carl Davis, the research director for the left-leaning Institute on Taxation and Economic Policy (ITEP). But the reason so many states have gone ahead with fuel tax increases is because of support from business groups. "They're viewing [gas tax hikes] as economic development initiatives," he says.

Ratings agency analysts agree with the assessment. "These states' actions address investment needs that are critical to preserving and expanding their economies," wrote researchers at Moody's Investors Service last week. 

Posted by at May 8, 2017 6:04 PM

  

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