Kaltbaum Capital Management President Gary Kaltbaum discusses the pressure on chip makers and AI stocks, the economic impact of high oil and gas prices and monetary policy under Fed Chairman Jerome Powell on Varney & Co.
The leader of a trade group representing most major automakers called on the federal government to eliminate them gasoline tax and replacing this with a vehicle fee to finance road infrastructure needs.
John Bozzella, CEO of Alliance for Automotive Innovation, whose group represents automakers such as General Motors, Toyota, Volkswagen, Hyundai and other leading automakers, introduced a proposal urging the federal government to address the growing Highway Trust Fund deficit with a vehicle fee.
The proposal would function as a vehicle registration fee That is assessed for all vehicles based on their weight, and was first reported by Reuters. It comes as the federal government’s current Surface Transport Act expires on September 30, which could spark debate over policy changes.
“This policy would ensure that every vehicle on the road contributes something to sustaining America’s transportation network,” Bozzella said. “Those who drive older, less fuel-efficient vehicles or travel long distances bear the financial burden. That’s not fair.”
AMERICANS ADOPTED EVS FOR LARGER VEHICLES AS CAR TRENDS REVERSE
An auto industry trade group is calling for a new vehicle registration tax to replace the gasoline tax. (Al Drago/Bloomberg via Getty Images)
The Highway Trust Fundwhich funds the federal government’s surface transportation programs related to highways and mass transit, is expected to declare bankruptcy in 2028, leaving the country facing a 46% budget cut, according to the nonpartisan Committee for a Responsible Federal Budget.
Revenue from the 18.4 cents per gallon gasoline tax has fallen 60% in real terms as the federal gas tax has not increased since 1993. indexed to inflation.
THE $10,000 TAX DEDUCTION FOR CAR LOAN: WHO ELIGIBLE AND HOW TO CLAIM IT
The federal gas tax has not been increased since 1993 and has eroded due to inflation. (M. Scott Brauer/Bloomberg via Getty Images)
The deficit has led Congress and successive administrations to divert more than $275 billion from the federal government general fund to help pay for road repairs since 2008 as expenses have consistently exceeded revenues.
With the rise of the gas tax, revenues from gas taxes have also decreased electric vehicles (EVs) and more fuel-efficient hybrids that reduce the frequency of refueling by drivers.
CAR DEALERS WARNED BY FTC OF DECEPTIVE PRICING PRACTICES AND HIDDEN FEES
The Highway Trust Fund helps finance federal expenditures for surface transportation programs. (Stephen Goin)
A House Republican proposal last year would have imposed a new annual fee of $250 for electric cars and $100 for hybrid electric cars, although this was not included in the bill. One big, beautiful bill.
Last year, an EV advocacy group known as the Electrification Coalition argued that the proposed $250 fee for electric vehicles was unfair because the average gas-powered vehicle pays only $88 a year in federal gas taxes.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Reuters contributed to this report.
