President Donald Trump's Council of Economic Advisers warned on Wednesday that taxing gasoline to pay for infrastructure improvements is an "imperfect" system.
The input from the president's top advisers on the economy comes after Trump proposed raising the federal gas tax by 25 cents to pay for his infrastructure plan. The idea has raised the hackles of some conservatives, who believe it could offset the benefit from recently passed GOP tax cuts and put Republicans in a tough spot ahead of midterm elections.
In a report released Wednesday, the Council of Economic Advisers raised a number of concerns about relying on taxes to pay for the nation's roadways.
"One of the things that we point out in the economic report to the president that came out today is that the gas tax's current design isn't really a 21st century design — that the gas tax was set at levels that were needed to fund highways back in the days when fuel economy was really low and we didn't have electric cars," Kevin Hassett, the council's chairman, told CNBC on Wednesday.
The 18.4-cents gasoline levy, which funds federal highway and mass transport spending, was last raised in 1993. Since then, inflation and rising fuel efficiency standards have eroded the purchasing power of funds raised through the tax.