Trump's gas tax proposal could 'ruin' Republicans' chances in 2018

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As the Trump administration weighs whether to hike the tax on gasoline in order to pay for the newly released infrastructure proposal, some are warning the president that it could hinder the sudden boost in approval ratings that Republicans have seen since the tax overhaul was signed into law in late December.

The federal fuel tax, which hasn’t increased since 1993, is currently set at 18.4 cents per gallon. President Trump reportedly endorsed the idea of a 25 cent-per-gallon gas increase at a Wednesday meeting with lawmakers.

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“Republicans have had a pop in the polls the last few weeks,” Greg Valliere, Horizon Investments chief global strategist, told FOX Business’ Stuart Varney. “Trump’s numbers are up. So they’re going to ruin this with a gasoline tax, a regressive tax that I think Democrats would love to stick them with? I just don’t see it.”

Economic confidence in the U.S. remains high, according to a Fox News poll. Three in 10 respondents said they see their wallet getting fatter, while 63% said they remain optimistic about the economy. Last January, 66% of respondents said they felt optimistic about the economy.

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On Monday, the White House unveiled Trump’s proposed budget for fiscal year 2019, which included a request for $200 billion for infrastructure spending from Congress. Over the next decade, the debt would likely increase by $7 trillion, as the proposal does not seek to balance the budget. Instead, the budget relies heavily on states to attract outside private investment to fund major projects.

During a White House press briefing, Secretary of Transportation Elaine Chao said the president “has not declared anything out of bounds” when asked whether the federal government would raise the fuel tax to fill funding gaps. But, she said that option was not ideal as it could have a “regressive impact” on hourly workers.

“I see the Republicans capitulating on trade to Trump, I see them capitulating on deficits,” Valliere said. “But they will not capitulate to Trump on a gasoline tax.”

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