Both McCain and Clinton have said that they'd do away with the federal gas tax. If memory serves that's about nineteen cents a gallon. That would be a savings of about 5% if my math is right. I have a few problems with that.
1) It's a drop in the bucket and with gas prices continuing to go north that percentage will get smaller.
2) If it does pass then demand will simply increase. Supply will stay relatively fixed. I don't know much but that seems to be a recipe for the price to go up.
3) Assuming that that gas tax does go towards paying for something like roads, where would the new revenue stream come from?
4) If it does go away when will it come back? Who will have the guts to bring it back?
5) It's nothing more than pandering. It won't happen more than likely and if it does then it won't help.
Comments? Please? Am I waaaaay off base here?
Comments (1)
Me resist an invitation to comment? Naaaah.
1) Yes and when compared with gas taxes in other countries, ours is very low. I'm partially alright with that because as with any any consumption tax on necessary goods, it is a regressive tax. Another part of me wants higher gas taxes to make alternatives economically viable.
2) That is exactly what all the experts are saying.
3) Roads are payed for at the State level. Each state has it's own gas tax that will not (and cannot) be repealed by the federal government. It is important to note that the interstates are subsidized by the federal government. Higher tolls then?
4) Good question. I hope they would build in a sunset clause at the outset.
5) Exactly! Kinda like the political stimu... I mean economic stimulus package.
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May 1, 2008 1:54 PM
Posted on May 1, 2008 13:54