The impact of infrastructure spending on the Federal Gasoline Tax

Today (June 6th) marks the 85th anniversary of The Revenue Act of 1932.  The Tax Act was designed to close a significant federal deficit (general fund) gap of just over $1 billion at the time. A component of the 1932 Tax Act was a 1 cent/gallon temporary gas/fuel tax that was scheduled to expire in 1934, this tax is known as the Federal excise tax on gasoline. Initially this excise tax was intended strictly for deficit reduction and not dedicated to building or maintaining infrastructure (roads and bridges).

Like all taxes, the Federal excise tax on gasoline never expired but it expanded. Today the excise tax sits at 18.4 cents/gallon for gasoline and 24.4 cents/gallon for diesel where it has remained steady since 1997 (the Clinton Administration). From it’s origins in 1932 until 1997 the excise tax was split in various percentages between deficit reduction (general fund) and infrastructure (Highway Trust Fund) but in 1997 President Clinton redirected the entire excise tax (100% of it) to the Highway Trust Fund. The Highway Trust Fund takes in about $35 billion a year from the Federal excise tax, which many lawmakers argue is insufficient to the tune of about $15 billion annually for maintaining the Nation’s infrastructure. Many lawmakers, including the normally tax increase adverse GOP,  have been calling for increases on this Federal excise tax for many years arguing that it is a consumption tax that pays for the infrastructure which it’s consumers (travelers) are using. 

Trump’s Infrastructure Plan: Trump has proposed to spend $1 trillion over 10 years on critical infrastructure spending plan to rebuild the country’s roads, bridges, airports, electric grid and water systems. Washington insiders have pegged the realistic direct federal spending on infrastructure much lower than $1 trillion at a range of $200 – $300 billion dollars, which is still significant. This is no clear pathway for Congress on how they would find the lower number of $300 billion in new money to pay for this plan. With funding details for this plan currently  about as clear as mud, the one thing for certain is that consumers can expect to pay significantly more at the pump in terms of Federal excise tax.

If just $300 billion of new infrastructure spending is approved over 10 years, it would translate to the Federal excise tax on gasoline increasing by 15.77 cents/gallon to 34.17 cents/gallon assuming consumers had to foot the entire bill.

Some of the obvious benefits of the proposed increased in infrastructure spending include: fixing a crumbling infrastructure that is badly in need of repair, lower vehicle repair costs to drivers caused by poorly maintained roadways, a safer transportation system, more jobs and less pollution emissions given that the higher cost of driving will reduce the amount of driving that takes place.

The big downside of the increased infrastructure spending is the additional pain at the pump for consumers and truck drivers. As most drivers know, the Federal excise tax isn’t the only tax that they pay at the pump. Drivers also pay State & Local gas taxes that vary from 12.25 cent/gallon in Alaska to 58.20 cents/gallon in Pennsylvania (30.64 and 76.60 cents respectably with the Federal excise tax included). The table above illustrates the State gas tax rates per gallon ranked from highest to lowest.

An increase in the Federal excise tax of 15.77 cents to cover the $300 billion in new infrastructure spending would translate into a 20 – 50% tax increase at the pump. In real dollars the increased tax equates to an additional $165 per year / per car that consumes 20 gallons per week.

If for some reason the entire $1 trillion in infrastructure spending was approved and passed onto consumers at the pump, which is highly unlikely, then it would translate into an increase in the Federal excise tax of nearly 50 cents per gallon representing a  65 – 163% tax increase at the pump with out of pocket cost to consumers increasing in excess of $500 per year / per car that consumes 20 gallons per week.

The silver lining in this $1 trillion cloud is that the increased tax would probably put the U.S. into compliance with the Paris Climate Agreement by significantly reducing the number of cars on the road and thereby reducing our emissions.

So the question is do we root for higher Federal excise taxes given that the societal benefit seem to be substantial while on the other side of the ledger the penalties for low-wage earners would be potentially devastating?


Rick Bassett


The origins of Leap Day

Today is LEAP DAY!!

A YEAR is typically defined as 365 days, or roughly the length of time that it takes the Earth to orbit around the Sun once but in reality the Earth doesn’t complete it’s orbit around the sun in precisely 365 days, its actually closer to 365.2524 days (“a vernal equinox year”).

To make up for the ¼ of a day difference, a corrective measure or an extra day known as February 29, is usually added to the calendar every four years, and that day is called a leap day.

In 46 BC, Roman emperor Julius Caesar introduced the Julian calendar, which was an amended version of the Roman calendar, with an extra leap day (or intercalary day) every fourth year.

Gregorian calendarThe Julian calendar would’ve worked out perfectly except the Earth’s obit around the sun takes 365.2425 days and not precisely 365.25 days. So over a century, this small difference accumulated to a slightly more than three-quarters of a day. From the time the Julian calendar was introduced to the 16th Century AD, the beginning of spring shifted from March 23 to March 11.

In 1582 Pope Gregory XIII established the Gregorian calendar and introduced the century rule to correct the rounding error. If a leap year falls at the beginning of a century, a year ending in double zeroes, you only add a leap day if it’s divisible by 400. The century years 1600, 2000 and 2400 are leap years, but years 1700, 1800, and 1900 are not. The Gregorian calendar also shifted the beginning of spring to March 21.


There is far more to Dolly Parton than meets the eye

Dolly Parton is a Paul Harris Fellow and an Honorary Rotarian

Dolly Parton is a Paul Harris Fellow and an Honorary Rotarian in the Cleethorpes Rotary Club

Dolly Parton, born 70 years ago today, is mostly thought of as a widely successful  American singer-songwriter, which is true,  but there is far more to her than just that.

She’s also an actress, businesswoman, entrepreneur, philanthropist, dedicated Wife, Doctor of Letters, Paul Harris Fellow and a Rotarian.

Dolly came from very humble beginnings in Tennessee where she was 1 of 12 children who’s family was so poor that it’s rumored her father had to pay for her birth with a bag of grain.

She is perhaps one of the most decorated musical talents in history with 25 certified Gold, Platinum or Multi-Platinum Records, 26 songs reaching No. 1 on the Billboard country charts, 42 career top-10 country albums and over 100 million recordings recording sold world-wide.

But don’t think for a moment that Dolly is a one-dimensional Gal… she’s never forgot her roots in poverty or the early struggles that her family endured as a result of her father being unable to read and write.

Dolly is a hands-on philanthropist who leverages her talents, her resources and her entrepreneurial skills to improve the lives of many others. A brief highlight of a seemingly endless list of Dolly’s good deeds include:

  • Being a longtime supporter of charities, especially those relating to literacy.
  • She established the Imagination Library in 1995, which sends one book per month to children from the time of their birth until they enter kindergarten. Many Rotary Clubs partner in this program.
  • Giving $500,000 to Fort Sanders Medical Center to help launch a new Cancer Hospital
  • Leading significant efforts to preserve the bald eagle through the American Eagle Foundation’s sanctuary at Dollywood.
  • Giving out countless scholarships through her foundation.

She’s very aware of her public persona and isn’t above poking a little fun at herself.

When asked in a recent interview if she’s had work done, she replied “It takes a lot of money to look this cheap”.

John Germ & Dolly Parton

John Germ & Dolly Parton

Dolly received an honorary doctorate of humane and musical letters from the University of Tennessee in Knoxville in 2009, so she’s really Dr. Dolly – or Double D as she referred to herself to RIPE John Germ on the stage of the Rotary International Convention in Montreal in 2011. Dolly was a keynote speaker at that conference and closed it with a performance of 9 to 5.

At 70 years old Dolly is still an energetic beauty with an amazing voice that shows no signs of slowing down as she’s still a significant presence in the music industry, works actively on her foundation to make the world place and generously gives of her time and talents to her family.

Dolly epitomizes Service Above Self by giving of herself day in and day out, she is the ultimate model of what a Rotarian is all about.

Dolly is also Paul Harris fellow – presented by RIPE John Germ in Montreal and she’s a Rotarian – a member of the Cleethorpes (Grimsby, UK) Rotary Club.

I wish that the North Haven Rotary Club thought of inviting her first.

Rick B


Nellie Tayloe Ross – The First U.S. Female Governor

Nellie Tayloe Ross

Nellie Tayloe Ross (American Heritage Center)

On this date (Jan 5th) in 1925 Nellie Tayloe Ross became the first female governor in the United States when she was sworn in as the 14th governor of Wyoming. She handily won a special election to finish out the remaining term of her predecessor, who happened to be her husband, who passed away from complications with an appendectomy just 1.5 years into his elected term.

Her platform of tax cuts, government assistance for poor farmers, banking reform, and laws protecting children, women workers, and miners and the strengthening of prohibition laws were in lockstep with her late husbands.

Women had only had the vote nationwide for just over 4 years when Ross became governor.

Her strong support of the prohibition laws likely led to defeat in her bid for reelection in 1926. She served as governor from 1925 – 1927.

In 1928 she was a strong supporter and campaigner for Al Smith‘s presidential bid. Despite their diametrically opposed views on prohibition, Ross received 31 votes from ten states for vice president on the first ballot at the 1928 Democratic National Convention. She is believed to have been the first female given serious consideration for the position of Vice President of the United States, although Joseph Smith from Arkansas ultimately received the nomination.

When Smith lost to Herbert Hoover, Ross was offered the  job of director of the Women’s Division of the National Democratic Committee, which she accepted and moved to Washington D.C..

Nellie Tayloe Ross on her Mint medal designed by Chief Engraver John R. Sinnock

Nellie Tayloe Ross on her Mint medal designed by Chief Engraver John R. Sinnock

Ross was appointed director of the U.S. Mint by President Franklin D. Roosevelt in 1933 making her one of the first women to hold a federal post of that importance. During her 20-year term the mint introduced the Roosevelt dime, the Jefferson nickel, and the steel penny, the latter an emergency measure during World War II.

Roosevelt appointed her to (3) five-year terms in the job, and President Harry Truman appointed her to a fourth term, a role which she served in until her retirement 1953.

After  retirement,  she made a number of profitable real estate investments, contributed to a number of magazines, traveled extensively and spent time with her children and grandchildren.

Governor Nellie Tayloe Ross lived to the age of 101 (11/29/1876 – 12/19/1977), she passed away in Washington D.C.

Footnote: Ross had the distinction of becoming the first woman governor by a small margin; Miriam Ferguson was inaugurated governor of Texas just 16 days later.



Charles Goodyear – New Haven based Inventor that turned Naugatuck into the Rubber Capital of the World

Charles Goodyear

Charles Goodyear

Charles Goodyear was born in New Haven, Connecticut on this day (Dec 29th) in 1800 and is best known for patenting a process known as vulcanization.

Amasa Goodyear, Charles’s father, opened the first US manufacturer of pearl buttons in the town of Naugatuck, CT in 1807, which supplied the US government with its entire inventory of metal buttons during the war of 1812. Charles was raised in Naugatuck, CT. where he learned the button trade and worked on the family farm as a young man. His enterprising father encouraged Charles to move to Philadelphia and take up an apprenticeship in a company called Rogers and Brothers.

After his apprenticeship, Charles partnered with his father to open the first domestic hardware store in Philadelphia, which is believed to be the first of it’s kind in the United States. While they enjoyed some success in the early years of the venture, it came crashing down in 1830.

In the early 1830’s the bankrupt Charles Goodyear was introduced to rubber at the Roxbury India Rubber Company in New York City where the proprietor explained that while rubber was a fine product in climate friendly Brazil, it wasn’t well suited for the extreme climates of the Northeast US as it had several fatal flaws; it melted in the summer while emitting a terrible smell and cracked in the winter.

Philadelphia County Debtor's Prison (source:

Philadelphia County Debtor’s Prison

Charles was thrown into debtor’s prison soon after returning to Philadelphia, due to his failure to pay off his creditors. He kept himself occupied with solving the flaws of rubber during his time in prison.

Speculation in the Rubber Industry in the 1830’s caused many investors to lose great sums of money as the promise of the miracle material from Brazil had failed to live up to commercial expectations. By 1835 the US based rubber industry was bust and abandoned by most investors.

Charles Goodyear Patent 3633

Charles Goodyear Patent #3633

Undeterred by the failure of rubber, Charles has a vision for 100’s of commercial applications for rubber including soles for shoes, frogmen suits,, life preservers and many more. He had virtually no resources, no formal training as chemist and his education wasn’t very deep but after many attempts over nearly 15 years to turn rubber into a commercially viable material he would develop a patented process known as vulcanization, which he received his patent for in 1844. Goodyear’s vulcanization process solved the problem of the fatal flaws that most commercial rubber manufactures in 1830’s were unable to solve.

More than sixty additional patents were granted to Goodyear for the application of his original vulcanization process for various uses, including rubber condoms, intrauterine devices, douching syringes, and “womb veils” (diaphragms).

Goodyear Metallic Rubber Shoe Company, Naugatuck, ca. 1900 (Source:

Goodyear Metallic Rubber Shoe Company, Naugatuck, ca. 1900

In 1844 Goodyear built a rubber factory in Naugatuck, which turned it into the rubber capital of the United States and put Naugatuck, Connecticut, on the map as rubber manufacturing capital during the 19th and 20th centuries.

While earning limited fame for his process, Goodyear didn’t financially profit from it as he spent all of his resources during his later years defending his patents in an estimated 32 patent infringement cases. He was in and out of debtor’s prisons in the US, England and France at least 5 times during his lifetime for running up bills which he couldn’t satisfy.

His business acumen never matched his inventive prowess as he made bad deals, failed to patent his process aboard, extended credit to people who couldn’t pay and charged far too small of a royalty percentage on his prized patent, which was the opposite problem that Eli Whitney experienced with the Cotton Gin.

Charles is buried in New Haven at Grove Street Cemetery.

Charles is buried in New Haven at Grove Street Cemetery.

From about the age of 30 through the balance of his life, he was in poor health, him and his wife lost 6 of their 12 children and his family lived in extreme poverty. When he died in 1860 he was nearly $200,000 in debt.

The family did receive modest royalties on Charles’s patents until 1865, which helped them to offset the effects of extreme poverty that they had lived with from 1830 – 1860. They sold the rights to the patents in 1865 just as they were due to expire.

Charles Goodyear had nothing to do with the Goodyear Tire & Rubber Company, which was founded in 1898 by Frank Seiberling 38 years after his death.