Gas Tax Holiday Or Nightmare On Main Street
April 23, 2008
I usually confine my blogs to Texas specific topics, but there are times when something tweaks me. The most recent occasion was when Sen. John McCain urged Congress to institute a “gas-tax holiday” by suspending the 18.4 cent federal gas tax and 24.4 cent diesel tax from Memorial Day to Labor Day. I thought he was more logical than that.
My first response upon hearing Sen. McCain’s idea was, “Instead of the government offering a gas tax holiday, why don’t the corporate refineries, who have been raking in exorbitant profits the past few years, take a hog trough holiday.”
SqueezedFrom Both Sides
Highway construction contractors are being squeezed from both sides. Contractors are having to pay more for yet another product that has gone up in cost, and there is less work to be had because it is these excise taxes that fund their livelihood.
People have already begun to use less fuel, meaning that funding for highway construction and maintenance is dwindling. If Sen. McCain’s proposal passes, this revenue would dry up completely for over three months. In 2006, federal funding provided by gas and diesel fees financed almost half of all highway capital expenditures made by the states.
By some estimates, if Sen. McCain’s proposal were enacted, the government would lose about $10 billion in revenue that would go to highway spending, according to ARTBA (American Road and Transportation Builders Association).
Ability Of Government To Provide
Congress had a difficult time passing the highway bill SAFETEA-LU (Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users) with $286.4 billion in funding in 2005 (1-1/2 years past its expiration) when the Highway Trust Fund had around $13 billion in it. Now that the Trust Fund has been spent down, the U.S. cannot afford to give away the means to keep building and maintaining roadways and enable infrastructure programs as suggested by House of Representatives Speaker Nancy Pelosi.
Gasoline prices this April are up between 60 and 75 cents from both 2007 and 2006, the pre-summer peak both years. Diesel prices were up by about $1.10 since one year earlier. The federal gas tax rate has not changed since October 1, 1993. Federal excise taxes, at 18.4 cents and 24.4 cents are small percentages of the price of a gallon of petrol.
Potholes would go unfilled and residential growth areas would remain stuck in two-lane gridlock. Senator McCain, you are pointing in the wrong direction.
Posted by Liz Moucka on April 23, 2008 | Comments (0)
