Eliminating the gas tax?

The situation: Bridges are falling down, traffic congestion is worsening, gains in fuel efficiency are reducing gas tax revenues, worthwhile transit projects are sitting on the shelf, and the Highway Trust Fund — funded by the 18.5 cents a gallon gas tax that is already inadequate for funding transportation investments — is about to run out of money.

A proposed solution to our current economic woes? Suspend the gas tax.


This week, economic analysts are predicting a recession, the homebuilding industry is slowing to a crawl (more on that later), and oil just hit an all-time high of $113 a barrel. Gas prices have gotten high enough that people are, for one of the first times in recent history, actually beginning to drive slightly less. No doubt that the high prices at the pump are putting pressure on Americans, to the point where many are altering their driving behavior or even perhaps thinking about living somewhere that allows them to drive less.

Presidential candidate John McCain announced a few economic proposals while speaking in Pittsburgh at Carnegie Mellon University. One of his proposals for curing our economic ills was a plan to completely suspend the federal gas tax from Memorial Day to Labor Day.

Could it be that we’ve misread the state of our transportation infrastructure, and we actually have plenty of money to repair bridges, maintain roadways, and invest in more transit and transportation alternatives? Does our infrastructure take the summer off?

An artificial and temporary reduction of gas prices will simply guarantee that absolutely no money goes towards having suitable roads and bridges for those filled-up cars to drive on — not to mention congestion-reducing alternatives like commuter rail and transit. Instead, we can send the full price of gasoline directly into the pockets of oil companies. (An estimated $10 billion in transportation revenue would be lost, or enough to fully fund Amtrak rail service for 6 years or so.)

The best way to lower the price of oil and gasoline is to reduce demand, which one economist pointed out on CNN.

Oil analyst Tom Kloza on Tuesday called McCain’s proposal “a quick fix for people who believe cheap gas is their birthright. It’s not a prudent thing to do.” The amount of money motorists would save would do little to stimulate economic growth, and revenue from the gas tax is much needed for road repairs, said Kloza, chief oil analyst at research firm Oil Price Information Service. Kloza also said reducing demand is one of the best ways of lowering gas prices.

At a time where people of all political stripes are realizing our desperate situation with transportation infrastructure, the effects of an energy policy reliant on foreign oil, and the knowledge that we can’t reduce our emissions without making sure that we drive less, it seems incredibly foolish to put forward a proposal that will (1) artificially lower the cost and raise the demand for driving, and (2) cut off the precarious flow of gas tax revenue for transportation improvements.

Friends of the Earth‘s Colin Peppard said,

“Suspending the gas tax will set back our fight against global warming. Eliminating the federal gas tax will increase driving and resulting global warming pollution at a critical time. Further, his proposal will hamstring the federal government’s ability to invest in the energy-efficient, climate-friendly transportation alternatives we need to reduce transportation emissions. If McCain were serious about addressing global warming, he’d be thinking of ways to decrease this pollution rather than proposing actions that would send it through the roof.”