This bill would allow the Dept. of the Treasury to issue 30-year “Invest in America Bonds” that would finance transportation infrastructure projects and would be paid for by increasing the tax on gasoline and diesel and indexing it to inflation. Bonds would be repaid at the end of their 30-year term, and the Treasury would be authorized to issue them through 2030.
Indexation of the gasoline and diesel taxes would be based on two factors: the cost of construction for transportation projects and reduced motor fuel usage. It’s estimated that the tax would be increased by 1 cent per year and generate about $500 billion in tax revenue. To prevent large fluctuations in the level of the tax, the indexation would be capped at 1.5 cents per gallon.
This legislation would also undo a provision of current law that requires $7.6 billion in highway funding be rescinded on July 1, 2020 -- effectively allowing the government to still use the funding.