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Koch brothers try to kill gas tax hike

File photo of a customer filling up on gas. (Christopher Occhicone/Copyright 2018 The New York Times)

Some Republicans have very slowly come around to an idea that is anathema to their less-is-more governing philosophy: raising the federal tax on gasoline. Even President Donald Trump, eager to find new revenue to fund infrastructure and to take on the mantle of a builder-in-chief, is on board.

That presidential pressure, however, may not matter for vulnerable Republicans in need of campaign cash: A pair of powerful GOP donors, David and Charles Koch, don't want to see the new tax and are pushing back hard on multiple fronts.

"I urge you to oppose the 25-cent gasoline tax increase to fund infrastructure legislation," Philip Ellender, president of government and public affairs at Koch Companies Public Sector, told members of Congress last week.

"Just as many Americans are starting to see more money in their pockets from tax reform, ask yourself: Does the government want to take back a large portion of this tax relief to pay for more government spending?" he continued in his letter.

The notice was significant for two reasons: First, it came from the government outreach arm of Koch Industries, the private refining and manufacturing behemoth owned by the billionaire Koch brothers. The two conservative industrialists often prefer to communicate their political wishes through affiliated groups instead.

Second, the urging comes after Trump, following months of rumors, asked Congress to pass a 25-cent increase in the gas tax in a closed-door meeting. Before the meeting, Koch-affiliated groups such as Americans for Prosperity and Freedom Partners had already come out against the tax hike.

"Trump came back to the idea of a 25-cent increase several times," said Sen. Thomas Carper, D-Del., who attended a closed-door meeting between Trump and lawmakers this month.

On Tuesday, Feb. 20, Americans for Prosperity and Freedom Partners doubled down on their gambit with a report tabulating the additional tax burden motorists in each state would face from a 25-cent gas tax increase, which is meant to power the president's proposed $1.5 trillion infrastructure push. Trump won nine of the ten states facing the highest estimated percentage increase in tax liability, according to the report. The numbers provide political fodder against congressional proponents of the tax increase.

The gas tax issue is the latest test of the Koch brothers' influence after Trump - not exactly their first choice during the 2016 election to run the country - came onto the scene and sucked up all the oxygen.

Last summer, for example, the Koch network lobbied against the Senate Republicans' health-care bill for not being conservative enough - or, as AFP chief Tim Phillips put it, being "a slight nip and tuck" of the Affordable Care Act.

The result: The Senate went ahead with the vote, which failed narrowly after three moderate Republicans defected (they thought the bill went too far). A better test of their power was the Koch groups' bid to kill the border-adjustment tax or BAT as a way to pay for sweeping tax cuts (they succeeded and the tax overhaul stoked massive deficit spending).

So far, fighting the gas tax looks like a less difficult challenge since some key Republican lawmakers remain unswayed by the president. And passing the infrastructure bill is a longshot anyway.

"I oppose raising the federal gas tax," John Barrasso, R-Wyo., chairman of a key Senate committee that is working on infrastructure and heard Trump's statement firsthand, said after meeting with Trump. "Not everyone who uses the roads today pays the tax, and not all of the money collected goes towards fixing America's aging roads and bridges."

Story by Dino Grandoni. Grandoni is an energy and environmental policy reporter and the author of PowerPost's daily tipsheet on the beat, The Energy 202.

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