Holiday from Reality

This past weekend, the Sunday public affairs programs were ablaze with the latest nonstarter of an idea from the campaign trail. Yes, the concept of giving motorists a “holiday” from the national gasoline tax continues to be debated, despite universal condemnation from economists.

Let’s do a quick fact check about the national gas tax.

* The tax stands at 18.4 cents per gallon of gasoline.

* As of May 5, the national average price for a gallon of regular unleaded gasoline was $3.61 (18.4 cents represents roughly 5% of that cost).

* It has been fifteen years (1993) since the tax was last increased.

* The national gasoline tax in the United States is perhaps the lowest, as both a percentage of the average cost of a tank of gas and in raw terms, of any industrialized country in the world.

The only benefactors of a low national gasoline tax are those who stand to profit from the sale of oil. By keeping the tax low, the oil and gas industry are free to squeeze as much profit out of a gallon of gas as possible, without harming demand for their product.

Really, it’s a pretty savvy profit model.

Despite the futility of argument, the subject of a gas tax holiday does resurface an important point about the use of revenue from the tax. Eugene Robinson started down this path in his May 3rd column.

Robinson rightly argues that by eliminating the tax, our crumbling public structures would be placed in still further jeopardy. The meager 18.4-cent national gas tax cannot even keep up with the cost of repairing badly outdated roads and bridges. Eliminating it would be a disaster.

Instead of arguing for a holiday, perhaps it is time we revisit the merits of actually raising the national gasoline tax.

I know, conventional wisdom dictates the mere mention of raising taxes is political suicide for any aspiring politician. But, there is evidence to suggest it might not be such a bad idea.

The time has come for a reality-based discussion about what it will take to reduce the demand for oil, as well as what it will take to fully repair our public structures. The gas tax holiday could provide an opening for that conversation.


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