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Some in Washington Want to Buy Your Vote with a Suspension of the Federal Gas Tax - That's Not a Good Idea

#1 · February 16, 2022, 1:37 pm

Quote from Savings Beagle on February 16, 2022, 1:37 pm
Discussions are going on right now - primarily amongst Democrats - to suspend the federal gas tax through December 2022.

This is an overt effort to "buy" votes as the spring primaries and, sooner than we expect, November mid-term elections hit. Make no mistake, this is politics at its worst.

And a fiscally imprudent move to boot.

As someone who worked on state budgets, specifically transportation budgets, I know how vital the gas tax is to maintaining the roads and bridges in communities across this country.

Any suspension for political gain will only result in financial pain down the road.

But, then, maybe Democrats feel maintaining the traditional funding stream is unnecessary after passing the $1.2 trillion Infrastructure Investment and Jobs Act. All I'll say about that is check exactly how much of that $1.2 trillion actually goes to road and bridge construction and repair. You might be surprised.

So, without question, suspending the 18.3 cent per gallon federal gas tax is a bad idea. Even if the plan is to replace the gas tax with general revenue dollars. Remember, the U.S. government already spends more than it takes in on an annual basis. It's not like there're excess dollars just waiting to fill budget holes when they appear.

Here are some comments from the Committee for a Responsible Federal Budget expressing similar concern over this proposal.

"In this calendar year alone, more than $42 billion in revenue is expected to flow into the Highway Trust Fund, over three-fifths of which will come from the federal gas tax. A federal gas tax holiday that lasts from March through December would decrease trust fund revenue by $20 billion, cutting this year's Highway Trust Fund revenue stream nearly in half. Without the general revenue transfer in this bill, this holiday would advance insolvency of the Highway Trust Fund by a year, from Fiscal Year (FY) 2027 to FY 2026."

You can read the Committee's full post at this link.

Maybe rather than playing political games to try and offset increased pricing, the administration should take a hard look at its policy and regulatory actions instead, adjusting those to bring some financial relief to U.S. consumers.

Discussions are going on right now - primarily amongst Democrats - to suspend the federal gas tax through December 2022.

This is an overt effort to "buy" votes as the spring primaries and, sooner than we expect, November mid-term elections hit. Make no mistake, this is politics at its worst.

And a fiscally imprudent move to boot.

As someone who worked on state budgets, specifically transportation budgets, I know how vital the gas tax is to maintaining the roads and bridges in communities across this country.

Any suspension for political gain will only result in financial pain down the road.

But, then, maybe Democrats feel maintaining the traditional funding stream is unnecessary after passing the $1.2 trillion Infrastructure Investment and Jobs Act. All I'll say about that is check exactly how much of that $1.2 trillion actually goes to road and bridge construction and repair. You might be surprised.

So, without question, suspending the 18.3 cent per gallon federal gas tax is a bad idea. Even if the plan is to replace the gas tax with general revenue dollars. Remember, the U.S. government already spends more than it takes in on an annual basis. It's not like there're excess dollars just waiting to fill budget holes when they appear.

Here are some comments from the Committee for a Responsible Federal Budget expressing similar concern over this proposal.

"In this calendar year alone, more than $42 billion in revenue is expected to flow into the Highway Trust Fund, over three-fifths of which will come from the federal gas tax. A federal gas tax holiday that lasts from March through December would decrease trust fund revenue by $20 billion, cutting this year's Highway Trust Fund revenue stream nearly in half. Without the general revenue transfer in this bill, this holiday would advance insolvency of the Highway Trust Fund by a year, from Fiscal Year (FY) 2027 to FY 2026."

You can read the Committee's full post at this link.

Maybe rather than playing political games to try and offset increased pricing, the administration should take a hard look at its policy and regulatory actions instead, adjusting those to bring some financial relief to U.S. consumers.