Testimony to Ways & Means on Infrastructure Funding

January 29, 2020

United States House of Representatives
Committee on Ways & Means
1102 Longworth House Office Building
Washington, DC 20515

Via email to: WMdem.submission@mail.house.gov

Re: Hearing entitled “Paving the Way for Funding and Financing Infrastructure Investments”

Dear Chairman Neal and Honorable Committee Members,

On behalf of Public Citizen’s more than 500,000 members and supporters, we appreciate the opportunity to submit this statement for the record outlining our recommendations for securing long-term funding for transportation and infrastructure funding.

Public Citizen strongly urges the committee to consider funding options for infrastructure investments that both maximize the benefit for taxpayers and that are sustainable over the long term. Given the existential threat posed by climate disruption, Congress should evaluate potential funding sources that not only generate significant revenue, but also create an incentive to reduce harmful emissions from vehicles such as by increasing the gas tax or implementing a tax on carbon.

In addition, since our nation’s infrastructure needs are enormous and broad—from roads and bridges to public schools, water and sewer pipes, green energy sources, and broadband—we should take this opportunity to go big on reinvesting in American communities. That means looking at additional sources of funding, particularly those that are progressive in nature and that have corporations and Wall Street pay more of their fair share.

It’s clear that America has an infrastructure crisis: bridges are crumbling, roads are in desperate need of repair and mass transit options are too few and far between. The American Society of Civil Engineers 2017 “Report Card for America’s Infrastructure” estimated that $4.59 trillion in investments are needed to modernize and repair U.S. infrastructure by 2025.[1] Further, across the country, teachers are standing up for more resources, cities are demanding safe drinking water, and rural America is struggling for access to information services the rest of the country takes for granted. And, as climate change further strains our infrastructure through increased flooding and high winds from storms, erosion, and other impacts on our physical environment from changing weather patterns, our nation’s needs will only expand as well.

The threat of climate change is why it is imperative that we fund transportation and other infrastructure investments with funding pots that are not only sustainable over the long term, but that would also incentivize positive behavioral shifts to reduce emissions that contribute to climate change such as by increasing the gas tax and instituting a carbon tax. The gas tax has not been raised for more than two decades and because of inflation, the value of the 18.4 cent tax continues to fall. While the tax has done a good job in reducing miles traveled and spurring more gas efficient vehicles, the tax should be raised, and be tied to inflation, as a way to keep up the level of highway funding while incentivizing gas use to continue to trend downward. And, Congress should also finally move forward with a tax on carbon dioxide pollution, with a refund given to low income families as a way to balance out the regressive nature of the tax. Since transportation produces around a third of our nation’s CO2 pollution, which causes climate change, it makes sense to tie proceeds from a carbon tax to fund improvements in mass transit, bike and commuter lanes, and other ways to reduce carbon emissions.

Moreover, if we are going to adequately address the pressing infrastructure needs of the nation, corporations, Wall Street and the wealthy should chip more in toward these investments. For example, at the very least, the huge windfalls in the 2017 GOP tax bill should be rolled back:  the corporate rate raised, top income rate restored, pass-through deduction ended, etc. But, beyond that, we could be implementing any number of progressive tax options[2] that net significant amounts of revenue. For example, a .1% tax on Wall Street trades would generate nearly $777 billion over 10 years[3] or a Millionaires Surtax of 10% on the incomes of taxpayers making $1 million (or $2 million for couples) would conservatively raise $635 billion over 10 years.[4] These two policy options alone would make a huge down payment on turbocharging our infrastructure investments while being paid by the wealthy and Wall Street high-rollers.

The time is now to go big to address America’s infrastructure challenge—while responsibly incentivizing fewer carbon emissions in the transportation sector and otherwise using progressive tax policies that have those who can pay more do so.

Thank you again for the opportunity to submit our thoughts on this important topic.

Sincerely,

/s/
Susan Harley
Deputy Director
Public Citizen’s Congress Watch division

/s/
Tyson Slocum
Director
Public Citizen’s Energy Program

[1] Danielle Muoio, The US Will Need to Invest More Than $4.5 Trillion by 2025 to Fix Its Failing Infrastructure, Business Insider (March 9, 2017) https://bit.ly/3aJJFZQ.

[2] Will Rice and Frank Clemente, Americans for Tax Fairness, Fair Taxes Now: Revenue Options for a Fair Tax System (April 2019) https://bit.ly/38Ljyjj.

[3] Congressional Budget Office, Options for Reducing the Deficit: 2019 to 2028, “Impose a Tax on Financial Transactions” (Dec. 13, 2018) https://bit.ly/3aTEJl9.

[4] Americans for Tax Fairness, Tax Policy Center Revenue Estimates for 10% Surtax (Oct. 15, 2019) https://bit.ly/2U4aORn.