[Congressional Record Volume 142, Number 62 (Tuesday, May 7, 1996)]
[Extensions of Remarks]
[Page E723]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          FEDERAL GASOLINE TAX

                                 ______


                            HON. NICK SMITH

                              of michigan

                    in the house of representatives

                          Tuesday, May 7, 1996

  Mr. SMITH of Michigan. Mr. Speaker, Tuesday May 7, 1996 Congress will 
vote to roll back the 4.3-cent increase in the Federal gasoline tax 
that was passed in 1993 over the objections of every Republican member 
of congress. It is appropriate that we talk about this on tax freedom 
day, the day when the average American can quit working for the 
government and begin working for himself.
  The tax increase we experienced in 1993 has resulted in slower 
economic growth than otherwise would have occurred. Using the 
Washington University Macro Model, the model that won the blue chip 
forecasting Award for 1995, the Heritage Foundation estimated that the 
1993 tax hike resulted in 1.2 million less private sector jobs and 
40,600 less new business starts. The economy lost $2,100 in output for 
every household in America over the 1993-1996 time period. And the 
personal and corporate tax increases delivered only 49 percent of the 
revenue predicted by the Congressional Budget Office at the time.
  But while we are talking about reducing the gas tax, we should 
consider repealing the tax at the Federal level and allowing States the 
ability to raise and retain gas tax revenues. Today the Federal 
interstate program is nearly complete and the role of the Federal 
government in transportation needs to be reexamined. I am proposing 
that just as Andrew Jackson found in the 1830's when he returned 
transportation responsibilities back to the States, transportation is 
primarily a local issue.
  There is some role for the Federal Government in maintaining the 
existing interstate structure, although it is hard to imagine that 
States would jeopardize their economic well-being by allowing their 
interstate roads to fall to pieces. But the current system mostly moves 
taxes from the States to Washington DC, redistributes some of it, 
attaches unfunded mandates, uses some for administration, and sends the 
remainder back. Why not let States levy the taxes necessary to fund 
their roads, and use new and innovative methods to finance and operate 
transportation systems unburdened by Federal regulations put in place 
by those special interest groups capable of effective Washington 
lobbying?
  Imagine what advances in technology we might see if States were able 
to freely innovate in transportation. Some States might lower their gas 
tax and allow for private roads with electronic sensing imbedded so you 
could drive and be billed at the end of the month. New satellite 
technology might allow firms to build and maintain roads that are truly 
paid for by the users. These roads would have to be plowed and kept 
free of potholes or people would choose other roads or other means of 
transportation. Other states might choose an entirely different system 
that we can't imagine. What we do know is that the system would be 
better than what we have now. Those of us who were using slide rules in 
college could not have imagined the era of personal computers. Markets 
and competition among the states will yield innovation and innovation 
is key to progress.

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