Would a gas-tax holiday help, or hurt?

by thoughtfulconservative

From The Week magazine’s website

The gas tax holiday is a “stupid idea,” no matter who’s pushing it, said the San Jose Mercury News in an editorial (free registration). McCain and Clinton know that; they’re just “fishing for votes” by pitching a “bad policy” that sounds good to voters who are sick of watching pump prices rise. “The typical motorist might save $25 in gas tax during a summer, but have worse roads to drive on as a consequence.” Only in an election year would anybody think that’s a good idea.

Hey, I’d like to pay as few taxes as the next guy, but isn’t this largely cosmetic? Of course, one could argue that about many political proposals.

Twenty-five bucks is only $25, but it is $25. I might save more because I’m going to be driving extensively this summer (Yes, the loan is already approved).

And I haven’t seen a cost of how much this would cost and it’s probably not going to happen anyway, at least, not this summer.

How much of a dent would it really put into the Highway Trust Fund?

It’s still, most likely, a dumb idea.

But just like the Stimulus Rebate checks, I’d still take it.

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2 Comments to “Would a gas-tax holiday help, or hurt?”

  1. The problem is that lower prices will create greater demand, which will lead to lower supply, which will lead to higher prices and we’ll be right back where we started. And where does the shortfall in revenue come from?

    The US consumes about 20 million barrels of oil each day. Let’s say 2/3 of that goes to gas (it’s probably higher). That’s 14 million barrels, or 644 million gallons each day. The federal excise tax is 18.4 cents. That means a shortfall of $118 million a day, times 96 days (Memorial to Labor Day), which equals about $12 billion. Now granted, there’s been bigger wastes of money at the federal level. But driving up demand for gasoline by reducing the price of a gallon of gas, thus assuring that the price of gas will go even higher, while defunding the highway trust fund makes Gerald Ford’s WIN buttons look positively brilliant.

  2. Yeah, well the Stimulus Rebate checks aren’t such a hot idea either and they passed that. Don’t count on your elected representatives to be so logical. It is an election year.

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