Gas Tax

SLOCOMB, Ala. — 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. . .

In Missouri, meanwhile, State Representative Jim Lembke, Republican of St. Louis, has sponsored a more novel approach to suspending the state’s 17.6-cent gas tax: drivers would turn in their receipts at the end of the summer and the state would cut them a rebate check.

Last week, the Missouri bill gained initial approval in the House; it has yet to be taken up in the Senate. The New York proposal has yet to pass. And the Florida plan failed in the Legislature on Friday, but Mr. Crist said he would like to revive it.

In North Carolina, the Republican candidate for governor is proposing a gas tax holiday and permanent reduction, while in Indiana the candidates for governor are debating ways to cap or reduce the growth of the tax, which rises with gas prices.

All of these plans come as other states resist letting go of gas tax revenue, which typically finances road construction and maintenance. (Full Story at nytimes)

This is a really, really bad idea. Gas taxes should not be cut at all. All you have to do is think of the logical outcome for a minute, and you will see why. With decreased prices at the pump there will be increased demand. Increased demand at the pump means higher prices on crude. So you have $3 gas this summer and when Fall roles around (and the taxes come back) you have $4.50 gas. In your mom's language: They are robbing Peter to pay Paul. They are only delaying the pain and it could possibly make things much worse in the long run.

Some may ask why they are proposing the "tax relief." The answer is politics. Basically they are pandering to the public outcry over high fuel prices. It gets votes. Any economist will tell you this is a bad idea. Don't get me wrong though, many people are stuck living day to day. They don't have the luxury of considering the price in three months because they are struggling to make it today. They need help but not from the government and not by artificially cutting fuel prices.

But hey, I've never been mistaken for a genius, so what do you think?