I grumble about high gas prices just as much as the next guy (or gal in this case), but when a friend asked me about the ‘Gas Tax Holiday’ proposed by Hillary Clinton and John McCain, I told her it was a bad idea. Here’s why:
– The federal gas tax is 18.4 cents a gallon. Clinton and McCain would like to suspend that tax for the summer months. That money funds the federal Highway Trust Fund (HTF), which finances road projects nationwide. The HTF already faces a $3.4 billion shortfall, which is why our roads are in bad shape and we hear constant complaining about them.
– The federal transportation department says every $1 billion in highway spending creates 34,779 jobs, which means the a gas tax holiday could cost 300,000 construction jobs.
– Economists say the average driver will only save about $30 over the summer, or 33 cents a day, because oil companies will most likely push up the price of gas by almost the size of the tax cut if there is a gas tax holiday.
– Eliminating the tax will lead to increased consumption.
So that’s my reasoning. Anyone have anything to add or a differing opinion?