Taxpayer Group Tells Congress: Just Say 'No' to Young's Tax Hikes; Commends Musgrave, Encourages Wavering House Members to Stand Firm

5/21/2003

From: John Berthoud or Maureen Tell of the National Taxpayers Union, 703-683-5700

WASHINGTON, May 21 -- As Congresswoman Marilyn Musgrave (R-Colo.) led the charge today against the House Transportation Committee's proposal to increase gasoline taxes, the National Taxpayers Union (NTU) was on hand to offer the support of its 350,000 members.

"Transportation funding is not the one-way street that House Transportation and Infrastructure Committee Chairman Young has presented. There are many other options available and there is absolutely no need to adopt his proposed 5.4-cent-per-gallon gasoline tax increase," NTU President John Berthoud stated.

"We thank Representative Musgrave for standing up against this proposal to gouge America's families and we encourage other Members of Congress to support her efforts. All House Members should take note: any vote in Congress to increase the federal gas tax will be heavily weighted in our Annual Rating of Congress," Berthoud cautioned.

Berthoud noted that the Chairman's proposed tax hike would raise the typical family's tax burden by at least $135 annually. In fact, a recent Joint Economic Committee study concluded that the cost to the economy -- in terms of reduced private-sector activity, consumer substitution, etc. -- of raising $1 in additional taxes for new federal programs is $1.40.

Berthoud urged that instead of more tax hikes, Congress consider the following:

-- Re-think the Existing Finance Structure. Last year $7.5 billion in gasoline taxes that motorists pay were diverted to inefficient mass transit programs, which carry far fewer riders per dollar than roads. Meanwhile, ending federal subsidies that promote the use of ethanol (and help to enrich a select few agribusinesses) could restore funds to the federal Highway Account and restore market efficiency to fuel costs. -- Let the Private Sector Help. While federal gas taxes can be re-directed towards maintaining existing infrastructure, many new road projects could be built privately and operated by tolls. A 2001 study by NTU's research arm found that an excellent candidate for such a venture exists in Washington's own backyard -- between the high-tech corridors of Reston, Virginia, and Gaithersburg, Maryland.

"Congresswoman Musgrave should be commended for encouraging Congress to take another direction on transportation funding. After all, on the road to fiscal stability, tax hikes are clearly a dead end," Berthoud concluded.

NTU is a non-profit, non-partisan citizen group working for lower taxes, less wasteful spending, and accountable government at all levels. The 2001 study mentioned above, NTUF Issue Brief 134, Privatization: A New Path Across the Potomac, as well as other publications, are available online at http://www.ntu.org.