It's hard to argue that eliminating the federal gasoline tax for the summer months, as proposed this week by Republican presidential candidate Sen. John McCain, wouldn't be welcome news for consumers. With gas prices likely to approach or pass $4 a gallon this summer, any financial relief would be appreciated.
But dropping the gas tax for a few months will do nothing to address the longer-term national economic crisis. The federal tax is 18.4 cents per gallon of gasoline and 24.4 cents per gallon of diesel. McCain proposes a "gas-tax holiday" from Memorial Day to Labor Day, which means that during the summer months the average price of a gallon of gas may be $3.80 instead of $4. While that would be enough to leave a little change in the pockets of Americans, it's not enough to impact the summer driving decisions that affect tourism and a number of other industries. Some estimates are that the "gas-tax holiday" would save the average American about 30 bucks.
The three-month reprieve would, however, cost the federal government tax revenue of about $10 million, according to some estimates. It also, as a result, likely would cost jobs. The federal transportation department says that every $1 billion of spending creates about 35,000 jobs.
Gas tax revenues help fund federal transportation programs - including road and bridge construction and repairs. Former Republican presidential candidate Mike Huckabee was wrong about many things, but he was right when he said that a key to a successful long-term economic recovery policy would be to invest in roads and other infrastructure. Doing so creates jobs and makes travel and economic commerce more efficient. Taking money away from transportation projects, even on a temporary basis, is counterproductive.
The McCain camp has said that the transportation fund shortfall can be made up by transferring money from the general fund. That, however, would add to the exploding federal deficit.
The bottom line is that while a gas tax reprieve would be popular, it's not a very wise policy. And, frankly, the proposal reeks of politics. It should not be considered a coincidence that McCain, the presumptive Republican Party nominee, will be in a presidential election just a few months after the tax holiday. Apparently, at least in this part of McCain's economic fix proposal, he's put politics ahead of common sense. That's unfortunate, and disappointing.
The good news is that McCain's gas tax proposal will not be passed. That's partly because most lawmakers realize the negative or neutral impact it will have on the economy. In greater part, and ironically, it will be because of politics. No one should expect that a Democratic-controlled Congress will pass a gasoline tax reprieve proposal from a Republican presidential candidate who would stand to gain politically in the short term.
But dropping the gas tax for a few months will do nothing to address the longer-term national economic crisis. The federal tax is 18.4 cents per gallon of gasoline and 24.4 cents per gallon of diesel. McCain proposes a "gas-tax holiday" from Memorial Day to Labor Day, which means that during the summer months the average price of a gallon of gas may be $3.80 instead of $4. While that would be enough to leave a little change in the pockets of Americans, it's not enough to impact the summer driving decisions that affect tourism and a number of other industries. Some estimates are that the "gas-tax holiday" would save the average American about 30 bucks.
The three-month reprieve would, however, cost the federal government tax revenue of about $10 million, according to some estimates. It also, as a result, likely would cost jobs. The federal transportation department says that every $1 billion of spending creates about 35,000 jobs.
Gas tax revenues help fund federal transportation programs - including road and bridge construction and repairs. Former Republican presidential candidate Mike Huckabee was wrong about many things, but he was right when he said that a key to a successful long-term economic recovery policy would be to invest in roads and other infrastructure. Doing so creates jobs and makes travel and economic commerce more efficient. Taking money away from transportation projects, even on a temporary basis, is counterproductive.
The McCain camp has said that the transportation fund shortfall can be made up by transferring money from the general fund. That, however, would add to the exploding federal deficit.
The bottom line is that while a gas tax reprieve would be popular, it's not a very wise policy. And, frankly, the proposal reeks of politics. It should not be considered a coincidence that McCain, the presumptive Republican Party nominee, will be in a presidential election just a few months after the tax holiday. Apparently, at least in this part of McCain's economic fix proposal, he's put politics ahead of common sense. That's unfortunate, and disappointing.
The good news is that McCain's gas tax proposal will not be passed. That's partly because most lawmakers realize the negative or neutral impact it will have on the economy. In greater part, and ironically, it will be because of politics. No one should expect that a Democratic-controlled Congress will pass a gasoline tax reprieve proposal from a Republican presidential candidate who would stand to gain politically in the short term.
