Gas Tax Vacation? Bad Idea

Although two of the 2008 presidential candidates and several other officials that face election in November have come up with the idea of suspending the Federal Gas Tax for three months this summer, it's an idea that will hurt all of us. We believe that the proposal is a ploy to earn attention and support from those who need help getting elected. Realists, like dozens of top economists and New York Mayor Mike Bloomburg, are not only against the idea, they give valid reasons why this proposal will be harmful in the long run.

For the average driver, the elimination of the tax will cause a reduction of 30 cents per gallon at the pump. That is assuming that the oil companies, the gas station owners, or others involved in the process, do not simply raise the prices artificially to increase their profits even more. (Does a quarterly profit of $6 billion seem "disappointing to anyone?) Over three months, if the entire tax savings is actually passed on to the consumer, we may see an extra $30 in our pockets. But what will we lose?

The Federal gas Tax is earmarked and actually goes to the repair of roads and bridges. Those three months loss of funds will either result in a lack or repair (and thus dangerous conditions) or the money to handle these projects will come from some other tax increase. Or perhaps Congress will simply add to our National Dept so that we pay for this "saving" next year. Typical -- Congress, and the current president, have a history of pushing the financial load on the backs of those who follow them, with no real long-term savings to the consumer.

Alternately, Congress may simply decide to suspend the road and bridge repairs that the three months of Tax Free Vacation would have paid for. How many construction workers and related industry jobs will be lost? One estimate puts it at over 300,000. Can our already hurting economy, with so many housing construction workers out of a job, afford that?

More to the point, do we want to encourage people to drive, to use gas, to own and use low gas-mileage vehicles? Especially during the vacation months?

If Congress has extra money to spend, rather than eliminating the gas tax, why not give the transportation industry a break? The vast majority of good in this country travel by truck, and some truckers are facing $1,000 tank fill-up costs. The increase to them is passed on to all of us in the form of higher prices, and thus reduced consumption. You want to stimulate the economy, then do it by giving gas vouchers for reduced fuel costs to truckers (companies and independent drivers). This savings, passed on to consumers, will halt the decline in retail purchasing. (Assuming, of cause, that the savings is passed on by the trucking industry.)