Rostenkowski Urges 15-Cent Gas Tax Hike

Chairman Dan Rostenkowski of the House Ways and Means Committee said Tuesday that a 10- or 15-cent-a-gallon increase in gasoline taxes to be earmarked for reduction of the budget deficit would be the most politically acceptable way of raising more federal revenues.

“If I had my way, it would be higher than that,” the Illinois Democrat said at a breakfast meeting with reporters.

The influential congressman said also that the Social Security system no longer must be considered untouchable in discussions of how to reduce spending or increase revenues.

“We’ve got to start with a clean brush and look at everything--including the Social Security system,” he said, differing with many Republicans and Democrats on the issue. “We’ve got to look at everything where revenues are concerned.”

But Rostenkowski said that President-elect George Bush would have to reverse his campaign pledge of “no new taxes” and seek a tax increase before the Democratic-controlled Congress even would consider such a step.

“He’s going to have to swallow hard and look at revenues,” Rostenkowski said of Bush. “In campaign rhetoric, you say one thing; in practical governing, you do another.”

However, when Bush and Rostenkowski discussed taxes at a meeting later Tuesday, the President-elect reaffirmed his anti-tax stance.

Each 1-cent increase in the federal gasoline tax would raise about $1 billion a year, according to government estimates, so a 15-cent-a-gallon raise would bring in $15 billion to the Treasury.

“I think that’s the easiest thing to move,” Rostenkowski said. Earlier, Chairman Lloyd Bentsen of the Senate Finance Committee had said that a gasoline tax would be politically damaging and unfair to Western states, where driving distances are greater than in the more urbanized East and Midwest.

Rostenkowski said that his committee, where all tax legislation must originate, would also be looking at excise taxes, a value-added tax and perhaps oil import fees if the new Administration endorses a revenue increase.

“I’m not very enthusiastic about a value-added tax, personally,” he said.

The Bush Administration will make a big push for reducing capital gains taxes, he said, but any cuts in this area would be offset by raising marginal rates for all taxpayers.