Gas Tax Holiday Frenzy at the State Level

It's not just Clinton and McCain on the wrong track with calls for suspending the 18.4-cent federal excise tax; governors and lawmakers in many states are calling for a similar tax holiday by suspending their own state gasoline taxes. This is probably the most foolish idea idea I've heard in eons.

Gov. Charlie Crist of Florida has been fighting to cut 10 cents from the state’s gasoline tax for two weeks in July. Lawmakers in Missouri, New York and Texas have also proposed a summer break from state gas taxes, while candidates for governor in Indiana and North Carolina are sparring over relief ideas of their own.

If experience with such gas tax “holidays” is any guide, drivers would save less than politicians suggest. But that is not necessarily the point.

“It’s about trying to serve the people and trying to understand and have caring, compassionate hearts for what they’re dealing with at the kitchen table,” said Mr. Crist, a Republican.

What's interesting is these politicians don't seem to give a damn about long-term solutions to either fuel prices, fuel economy, energy alternatives, or people living below the poverty line regardless of whether or not we have cheap fuel.

But they certainly do know how to jump on the quick-fix bandwagon to appease a public which seems to believe quick-fixes and cheap energy are an American birthright.

The response speaks not just to the reality of skyrocketing gas prices. It also highlights the political potency of anything that affects Americans’ bonds with their cars. Gas is a product that no one can ignore — and one that inspires intense emotion.

The time to bite the bullet is now. Oil futures surpassed $120 a barrel on Monday and if that isn't a wake-up call to start pouring huge resources and attention into long-term energy alternatives, then we reap what we sow. The idea that a suspension of the tax is going to help million of Americans "put food on the table" during the summer is preposterous.

Assuming prices don't continue to rise more than the amount of the suspended tax, then many American may indeed be able to buy a week's worth of groceries. Unfortunately, we can't assume fuel prices won't continue to rise during the summer months. State coffers will suffer and in the end, the lost tax revenue will need to be recouped. And in the end, if by chance fuel prices at the pump have risen another 10-cents to 20-cents a gallon by Labor Day, it's going to be a double whammy when the state and/or federal taxes on fuel are reinstated.

Changing our driving habits can do far more to put food on the table than a temporary suspension of the tax. Eliminating unnecessary trips and driving more conservatively could accomplish a lot. And we have the power to do that on our own, without the involvement of politicians.

What we should be demanding of our politicians is honesty, and a pledge to work sincerely on energy reform, without influence from big oil interests. We don't seem to be there yet.


Crossposted at Big Brass Blog