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Koch network asks Trump not to raise gas tax for roads

Vehicles travel on Interstate 395 (I-305) next to a building construction site in Washington, D.C., on July 29, 2015. Bloomberg photo by Andrew Harrer.

The influential Koch political network is urging President Donald Trump to reject a proposal made by the U.S. Chamber of Commerce to increase the federal gas tax to help modernize American roads, bridges and other infrastructure.

Last week, the chamber called on Congress and the Trump administration to raise federal fuel taxes by 25 cents a gallon, pass initiatives including a new federal loan guarantee program, streamline the permit process and take steps to ensure that there are enough trained workers.

The White House hasn't endorsed a gas-tax increase, but it also hasn't ruled it out. A leaked draft of the administration's principles for the president's promised $1 trillion infrastructure plan became public earlier this week, and more specifics are expected in the coming weeks.

"Our organizations worked hard over the past year to support your efforts and the efforts of tax-cutters in Congress to provide American families much-needed and long-overdue tax relief," reads a letter being sent to the White House from executives of the Koch-affiliated Freedom Partners Chamber of Commerce and Americans for Prosperity. "But increasing the gas tax would effectively undermine recent tax cuts by clawing back hundreds of billions of dollars - roughly 25 percent of the total benefit from tax reform."

The letter isn't surprising, given the history of opposition to taxes from a political network led by billionaire industrialists Charles and David Koch. Still, it pits two of the most powerful forces in conservative American politics against each other.

"We put forward a plan that would allow America to invest the hundreds of billions of dollars that are needed to rebuild and modernize our infrastructure," Neil Bradley, the chamber's chief policy officer, said in response to the letter. "We're ready to work with anyone who is willing to get this done and we welcome alternative ideas to fund that investment, but let's be clear, America won't move ahead if we are trying to rebuild and modernize on the cheap."

The chamber has recommended increasing the federal gas tax by 25 cents -- 5 cents per year during the next five years, including indexing the rate to inflation -- to raise $394 billion over 10 years. The increase would cost the average American about $9 a month more in gas taxes, the chamber has said.

The federal per-gallon taxes of 18.4 cents on gasoline and 24.4 cents on diesel were last raised 25 years ago. Since then, the revenue they generate has declined as inflation has reduced their purchasing power and the average fuel economy of passenger vehicles has increased.

"Maintaining core infrastructure is an important function of government that should be carried out in the most efficient and effective manner possible," says the letter from the Koch-affiliated groups. "Efforts to improve our nation's infrastructure should focus on maximizing taxpayer dollars by targeting priorities such as roads and bridges, eliminating wasteful spending, removing regulatory barriers that delay projects and drive up costs, and ensuring there is proper oversight and accountability."

Story by John Mccormick