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Published May 01, 2008 11:40 am -

EDITORIAL: Gas gaffe


New Castle News

Considering the current state of economic illiteracy in America, we knew this idea would inevitably gain popularity.

We refer to calls to suspend the gasoline tax, possibly in Pennsylvania, but primarily at the federal level. It’s said that a temporary moratorium on the gasoline tax would give the nation’s motorist a break, at a time when prices have risen dramatically.

Two of the main presidential candidates, John McCain and Hillary Clinton, are touting this nonsense. Only Barack Obama has questioned the wisdom of this plan.

And the plan has no wisdom. For starters, the federal gas tax stands at 18.4 cents per gallon. That would translate into a mere 5 percent price reduction if the tax were suspended.

But that’s only if the savings were actually passed on to the consumer. What mechanism does the federal government have in place to ensure this would happen? None whatsoever.

Then there’s the annoying little fact that the gasoline tax is imposed to raise money. The funds are used mainly for road and bridge projects, as well as for maintenance.

There would be no real savings to consumers if they are forced into major detours because unmaintained bridges are closed, or if they are required to make hefty repairs to their vehicles’ suspensions because of deteriorating roads. These conditions would likely cost them more than the tax would.

So we suspect that if the gas tax were suspended, the federal government would take the easy way out — and borrow the funds.

We are well aware of the belief that money the federal government borrows is the equivalent of free money. But it has to be paid back — with interest. And who pays it back? Eventually, the taxpayers do.

So let’s review: Any consumer savings from a suspension of the gasoline tax would eventually wind up costing Americans even more. They only difference is that price wouldn’t show up at the pump.

Instead of such silliness, presidential candidates and others should be honest with the American people, and encourage them to take concrete actions that would cut their gasoline costs meaningfully. These include driving less, combining trips, car pooling, taking the bus, traveling at slower speeds and eliminating excess weight from vehicles. These are basic conservation measures that individuals can control for themselves.

It is fundamentally dishonest to suggest the federal gas tax can be suspended with no consequences. And those consequences are more expensive than the tax itself.



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