Curious as to what all the talk of a “Gas Tax Holiday” would mean for our family’s bottom line, I decided to do the math to see what I would save if it were instituted.
A Gas Tax Holiday would suspend the federal government’s 18¢ tax on gas from Memorial Day until Labor Day. By my calculations that’s a period of about 14 weeks.
Our 1998 Honda Civic has a ten-gallon gas tank, which I need to fill about once every week and a half. (I know our fuel consumption is way less than most families. It is also intentionally so.) This means that, based on current consumption levels, we would go through approximately 9.3 tanks of fuel during the Gas Tax Holiday period.
Now let’s crunch some numbers:
10 gallon tank x 9.3 fill ups = 93 gallons
93 gallons x 18¢/gal. Tax Holiday savings = $16.74
It has been estimated that a Gas Tax Holiday would cost the federal government $10 billion in lost revenue. Money from the gas tax is currently deposited into a trust fund which is used exclusively to repair our nation’s roads and bridges (aka, our infrastructure). Only two possibilities exist if that money is not available for deposit into the fund; necessary work on our nation’s roads and bridges will not be completed, or, the money will have to come from somewhere else.
John McCain’s version of the Gas Tax Holiday has been criticized for being unable account for the $10 billion shortfall. The money simply wouldn’t be there. Critics say this would potentially leave vast amounts of needed repairs undone, further hurting our already deteriorating infrastructure, and could also mean job cuts for highway workers.
Hillary Clinton is for the Gas Tax Holiday, despite having voted against a similar plan in 2000. Her plan would account for the $10 billion deficit by levying a “windfall tax” against oil companies. Critics of her plan point out that, if such a “tax” were instituted, there’s no telling what would keep oil companies from simply raising prices further to make up for the dent in their profit margins.
Barack Obama claims that this is all just an election year stunt to buy up votes from struggling families at about $25 a pop (or in our case $16.74). He argues that this “gimmick” does nothing by way of offering real solutions to the gas crisis and would likely make matters worse in the long run, regardless of whether we went with McCain’s or Clinton’s plan. Obama’s critics like to point out that the Illinois senator voted in support of a Gas Tax Holiday in 2000, when he was a state senator.
I’m inclined to agree with Obama. While I don’t know why he voted in support of a similar plan in 2000, and I’m willing to admit it has me wondering if he’s flip-flopping on this issue, what he’s saying about it today rings the most true to my ears.
When I first heard McCain’s proposal the first thought that entered my head was “it’s a gimmick.” I still think it is, and an ill-conceived gimmick at that.
I don’t like McCain’s plan to just kiss $10 billion good-bye, that doesn’t seem wise to me. But I also don’t like Hillary’s plan to penalize businesses for being profitable. If there was an investigation into price gouging by the oil companies that showed they were indeed jacking up prices – I would favor stiff penalties (to be paid directly to taxpayers). But until then, I’m going to assume that their record profits have everything to do with our record consumption.
In the end, it just doesn’t add up. You can’t simply pull $10 billion in revenue out of the federal treasury and think it won’t have a reverberating effect elsewhere. You also can’t just simply rob Peter to pay Paul and call it a solution – no matter how rich Peter is or how little your paying Paul.
So let’s just call a spade a spade here. This is just an election year gimmick – plain and simple.