A GOP proposal to create an annual $20 fee for all U.S. vehicles — which has been criticized by members of both parties as a national car tax — was pulled Wednesday from budget reconciliation legislation.
The chair of the House Transportation and Infrastructure Committee, Rep. Sam Graves, a Republican representing Missouri’s 6th District, had proposed the annual registration fee to try to eventually phase out the federal gas tax.
But it was criticized by Republicans as well as Democrats.
Senate Minority Leader Chuck Schumer posted a short video that said, “Of all the crazy things Republicans want to do, now they want a car tax? Hell no.”
Graves on Wednesday amended budget reconciliation language to take out the $20 fee.
“It unfortunately became a political distraction that no longer centered around seriously addressing the problem,” he said. “While this provision goes away, the problem still remains — we have a broken highway trust fund.”
Graves had hoped the fee would start a movement away from the federal gas tax of 18.4 cents a gallon, which hasn’t been raised since 1993.
Federal gas tax revenue has been decreasing, in part because of the growth of electric vehicles, as well as the increase in more fuel-efficient vehicles.
The legislation still includes a $250 annual fee on EVs as well as a $100 fee on hybrids.
Before the $20 fee was pulled, Rep. Chris Deluzio, a Democrat representing Pennsylvania’s 17th District, criticized Republicans for supporting it.
“Republican members of this committee are trying to raise taxes on every car owner in America,” he said.
GOP lawmakers on several committees are marking up legislation as part of President Donald Trump’s so-called “one big, beautiful bill.”
The provisions are a mix of deep spending cuts as well as measures designed to raise money to offset more than $4 trillion needed to extend Trump’s tax cuts from his first term.
Democrats charge that Republicans are effectively punishing everyday Americans with higher costs and reductions in federal services in order to pay for tax cuts to benefit the wealthy.
Republicans counter that the funding cuts are necessary to deal with a bloated federal government and the tax cuts will benefit a broad range of American taxpayers.
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