Trump Toys with the Idea of Raising the Gas Tax
When the federal government decides to levy a higher tax on gasoline and fuel, nobody feels it like the trucking industry. Accordingly, when the President of the United States announces to reporters that raising the gas tax is “something that I would certainly consider,” it is due to draw a reaction from American truckers. But, perhaps counterintuitively, it would seem that the trucking industry is in full support of a raise in the gas tax— on one condition.
The ATA, the Truckload Carriers Association and the OOIDA have all voiced their support for a hike in the gas tax so long as all of its increased revenues are dedicated to upgrading the U.S. transportation infrastructure.
It is relatively rare to see an industry support a tax that would greatly raise its own cost of operations. Fuel expenses are among the most significant costs that trucking companies and owner-operators incur as they conduct day to day business, and even a slight raise in the tax on gasoline could cause a major disruption in the industry.
Why Truckers Want a Higher Gas Tax
Since 1993, the Highway Trust Fund has not been able to keep pace with the deteriorating highway system, and truckers are willing to shoulder a gas tax if it means less potholes, less traffic and less wear and tear on their big rigs.
In this case, the cost of deterioration greatly outweighs the cost of a higher gas tax. With better roads come quicker trips, less damage and happier drivers. With quicker trips comes more business, and with more business come more profits.
ATA Press Secretary Sean McNally told reporters, “As an industry that pays half of the tab that funds the Highway Trust Fund we welcome a discussion around tax reform and how best to generate the additional revenue we need to improve our roads and bridges so we can continue to safely and efficiently 70 percent of the nation’s freight move.” Mr. McNally raises an important point—the trucking industry is by far the largest benefactor of the Highway Trust Fund, and they thereby have the most to lose if the fund is insufficient.
Congressional projections suggest that a 35 cents-per-gallon raise on the gas tax would give the government $473.6 billion dollars over the next ten years.
President Donald Trump ran a fierce campaign centered on an “America First” mentality—he called for lessening the trade deficit, fixing the budget deficit and upgrading the crumbling American infrastructure. The proverbial “rebuilding” of the country won him many grassroots and working class votes, many of which came from the trucking industry. Truckers and trucking company owners alike are eager to see Trump live up to his promises, even if it means incurring a cost via tax in the short run.
If the gas tax is passed, your long-run operational costs are sure to decline—however, in the short run, you will face financial hardships as a small trucking company owner/owner-operator. How will you grapple with the additional expenses? You will need a financial plan to ensure that you can take on new clients and cement yourself within the industry. To get started, call Factor Finders and ask us about our freight factoring programs, fuel cards, and other money-saving methods of alternative finance. It will be expensive for the United States to rebuild its transportation infrastructure, and while construction is underway, you will need to stay ahead of the game—let us point you in the right direction.
