Stakeholder Quotes from 1959 House Gas Tax Hearings

Stakeholder Quotes from 1959 House Gas Tax Hearings

September 07, 2019  | Jeff Davis

The House Ways and Means Committee held three days of hearings in July 1959 on President Eisenhower’s proposed 1.5 cent gasoline and diesel tax increase, requested in order to keep the Highway Trust Fund from running out of money in fiscal year 1960.

The full transcript is here, but we have selected some choice quotes to show how many highway stakeholder groups opposed not just the gas tax increase, but any kind of highway user tax increase, with reference to the page numbers of the statements in the original hearing:

In Favor

U.S. Chamber of Commerce: “With an objective of continuing the program on the Interstate System and at the same time promoting sound fiscal policies, our board recommends that taxes now assigned to the trust fund be increased, with a definite terminal date, as far as practicable toward the goal of providing the revenue necessary to make the fund solvent and the program be tailored to live within the revenue provided.” (pp. 428-429)

Association of American Railroads: “To deviate from pay-as-you-go would be nothing less than dangerous playing with fiscal fires…You have heard before and will again suggestions that general and defense benefits from highways justify the use of general tax revenues in highway financing. This is an excuse, a smokescreen to escape responsibility for highway costs by shifting them from users to the general body of taxpayers, including the railroads. The same fallacious theory of general and defense benefits could be advanced on behalf of any essential industry or worthwhile economic activity seeking to be supported by general taxpayers.” (pp. 350-351)

Associated General Contractors of America: “In our opinion, the American public is willing to pay for the roads it uses. We think this is borne out by the fact that the American people are anxious to use the toll roads that have been constructed for them. Neither would we oppose any combination of gas tax and other methods under consideration here, including the issuance of short-term bonds, which has been proposed, and the dedication of additional highway user taxes to the trust fund. Of these proposals, we believe that the more reasonable approach would be to obtain part of the necessary funds by a gas tax increase, and the balance by dedicating other highway user taxes directly to the trust fund.” (p. 366)

No Opinion Expressed

American Association of State Highway Officials: “In your hearings here this week, you have heard many suggestions as to how to solve the highway finance problem. It is our hope that the Congress and the executive branch will develop and enact some solution that will prevent an interruption of the program. You may wish to consider at this time some legislation to give interim relief to the highway problem, inasmuch as in 1961, you will have the advantage of the next cost estimate and the section 210 cost allocation study for your further guidance and consideration.” (p. 295)

American Road Builders Association: Congress should “take affirmative action to assure the continuation of the program at the planned rate.” (p. 361)

Opposed

American Trucking Associations: “It is the belief of the industry that the highway program, so essential to the national welfare and the general economy of our country, should be kept on schedule. We believe this can be accomplished without placing additional taxes on the Nation’s highway users at this time…This can be accomplished by a return to the original concept of balancing income and outgo in the highway trust fund through the use of repayable advances, loans, or issuance of revenue bonds secured by trust fund receipts.” (pp. 108-112)

American Automobile Association: “We are opposed to any increase in the Federal motor fuel tax. We are opposed to crediting to the highway trust fund, even temporarily, any revenue from excise taxes on passenger vehicles, their parts and accessories. To meet the deficit in the highway trust fund and to assure apportionments for the National System of Interstate and Defense Highways for fiscal years 1961 and 1962, we favor, as an interim measure only, the issuance of short-term revenue bonds.” (pp. 117-118)

National Association of Motor Bus Operators: “we believe that the highway construction program can proceed substantially on schedule without undue delay by raising needed revenues from sources other than an increased tax burden on highway users.” (p. 345)

American Municipal Association (now the National League of Cities): “With respect to the proposal for a temporary 1½-cent increase in the Federal gasoline tax, we have felt that it would encroach on the ability of State governments to finance their share of the national highway program and their own non-Federal-aid construction programs. For that reason we favor borrowing from the Treasury to be repaid from future trust fund revenues.” (p. 377)

National Association of County Officials: “We feel strongly that a gasoline tax increase at the Federal level would have the ultimate effect of forcing the States and local governments out of all non-federally aided highway construction…Highways serve a national defense and civil defense purpose. This purpose requires highway financing in part from revenues from sources other than highway taxes.” (p. 205)

AFL-CIO: “it would appear preferable, in our opinion, that additional moneys with which to replenish the special trust fund be obtained through and from general Treasury revenues.” (p. 418)

National Grange: “Until [the section 210 cost allocation] study is completed, there should be no increase of taxes of any kind on highway users. We believe this is the time to give most careful consideration to Senate Joint Resolution 109, introduced by Senator Case of South Dakota, to the issuance of revenue bonds to cover the interim period roadbuilding funds are needed until such time as adequate moneys are available from the highway trust fund.” (p. 368)

National Rural Letter Carriers Association: “it is our recommendation that the Byrd amendment be suspended so that advances can be made from the general fund to keep the highway program on schedule, and that no additional or higher taxes be enacted at this time.” (p. 372)

Automobile Manufacturers Association: “it would be premature at this time for Congress to impose further special taxes on motorists, or to institute new allocations to the highway trust fund from Federal automotive excise taxes.” (p. 414)

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