Auto Care Insider Volume 110 - 22

GOVERNMENT
AFFAIRS
By: Aaron Lowe, senior vice president,
regulatory and government affairs,
Auto Care Association

ENACTING INFRASTRUCTURE
LEGISLATION: HOW COMPLICATED
CAN THIS BE?
NOW that Congress has achieved tax
reform legislation, many in Washington,
including the president, are calling for
infrastructure legislation to be the next
big-ticket item for Congress to tackle.
Taking congressional action that
increases funding for infrastructure
projects is great for politicians because
it creates jobs and improves the
quality of life. Further, improving the
nation's infrastructure is a bi-partisan
subject and could bring both sides
of the aisle together to support a bill
that provides many benefits to the
economy and the American people.
For the aftermarket, investing in
infrastructure would have many benefits.
We are an industry that depends on
being able to move goods from point A
to point B, and anything that reduces
bottlenecks and helps to make that
process more efficient, is going to

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benefit the industry's bottom line.
This seems like a no-brainer for
Congress, but how do we pay for it?
Currently, federal funding for
road construction comes from the
highway trust fund, which is paid for by
gasoline taxes. However, the tax has
not been increased since 1993, and
has lost 40 percent of its purchasing
power due to inflation. Additionally,
the increased fuel economy of today's
vehicles means less gas consumption
that can be taxed and therefore
less revenue that can be raised.
Many on the Hill have said that
an increase in the gasoline tax
would amount to a tax increase and
therefore violates a pledge made by
many legislators not to raise taxes.
Further, many contend the gas tax
is regressive because it forces poor
and rich drivers to pay the same tax.

Of course, there are other options
to the gas tax including a tax on
vehicle miles traveled (VMT), which
has gained more attention recently.
While a VMT tax would eliminate the
challenge of reduced revenue from
more fuel-efficient vehicles, it is still
considered a tax and therefore opposed
by many politicians and the public.
So, as we go down the road in
this Congress, be wary of elected
officials' vocal support for infrastructure
legislation without any commitment to
make the tough choices needed to fund
these projects. It's easy to be supportive
of mom and apple pie until someone
must spend the money to buy the pie
and negotiate with mom to bake it.
The original version of this article appeared
in Aftermarket Business World.
http://www.searchautoparts.com/aftermarket-business/opinion-commentary-distribution/enacting-infrastructure-legislation-how-complic
Table of Contents for the Digital Edition of Auto Care Insider Volume 110
