Gas Tax Holiday = Wasted Opportunity

I sometimes wonder if politicians actually have any brain cells in their heads. Then I realize that most of them are probably very smart people but they say what they say and do what they do because they pander to that which helps them earn money and get re-elected; corporations and the general masses.

One of the latest ideas that certain politicians (Hillary Clinton, John McCain, and probably others) are pushing for is so stupid it got me again wondering if these politicians have any brain cells in their noggins (like the Family Guy episode where Peter has one brain cell left in his brain which has just broken its glasses, which is actually a reference to an old Twilight Zone episode). This idea is for a federal gas tax holiday this summer (gas is currently taxed by the government at 18 cents a gallon). I haven't done out the math myself, but the number being thrown around is that the average family will save $30 from the government not charging this tax over the summer.

This is one of those ideas that may sound attractive at first, but is really just dumb. It does absolutely nothing to address the fundamental problem of our addiction to gasoline and other fossil fuels. Most economists think this will do nothing to lower gas prices, as the cut in price will slightly increase demand, driving prices even higher! It's Econ 101, supply, demand, and pricing. Historically, when there have been gas tax breaks, the price did not drop the same amount as the tax break. For example, quoting the New York Times here,

When Illinois and Indiana suspended about 7 cents of their state gas taxes in the summer of 2000, prices fell by an average of only 4 cents, according to a study by the American Road and Transportation Builders Association, which opposed the plans. Drivers saved no more than $2.50 a month, while each state lost tens of millions of dollars in tax revenue

At least Barack O'Bama has the balls to say that he does not support this gas tax break, and that it is stupid and does nothing to address the root of the problem. In addition to this, not charging this tax will take away something like $9 billion in tax income from the federal government, increasing further the national debt. At least not all politicians are proposing stupid measures like this one. Again, quoting the same NYT article,

And Georgia, which briefly shelved its gas tax after Hurricane Katrina, has no plans for a sequel. Instead, Gov. Sonny Perdue, a Republican, has pushed to expand state bus service and is relying on new tax incentives for telecommuting that give people “the option not to buy gas,” said Bert Brantley, his spokesman.

This is a great opportunity for politicians to tell Americans to get out and walk more, take the bus, ride a bike, get exercise, stop driving so much, change their wasteful habits. Instead, some of these politicians want a temporary tax break that will do nothing to curb demand. Americans are addicted to gasoline and fuel (I'm no exception, I still drive my Honda Civic almost 20 miles each way to work each day, but I'm planning to start biking 1 - 2 days per week). Urging people to get outside out of their cars will also encourage people to exercise, which judging by the fact that 30% of Americans are obese, collectively as a country we could use it! Why not promote Bike to Work Week? If 10% of those who drive to work regularly switched to walking/bicycling/taking public transportation, it would have a ginormous effect on national fuel consumption and pricing. If Americans did get some transportation exercise, this would in turn save a lot of fuel as well. As I described in this post, if every American lost one pound, 39 million gallons of fuel would be saved per year.

What happens when the gas tax holiday ends? The price goes up again and demand has not fallen! I personally think the gas tax needs to increase! The extra money can go to programs to promote alternative energy and energy efficiency increases, promoting public transportation and bicycling, etc. For really poor Americans who cannot afford increased pricing there can be gas vouchers, etc. like food stamps to help them out, or slightly lowered taxes for low income Americnas.

The politicians could be talking about how this is a great opportunity for America to save energy by increasing fuel economy standards for cars + trucks, promoting local and organic food, buying less crap from China and more high quality stuff from USA, promoting walking/biking/taking more public transportation instead of driving everywhere, promoting renewable energy alternatives and increased efficieny requirements for everything. Instead, because of their corporate interests and pandering, this stupid ass idea is being promoted to solve our problems. And no, using corn to make ethanol is not a solution to our gasoline addiction/problem. It has only exacerbated already high food and fuel prices in the US and around the world (and actually increased global pollution instead of reducing it). People are starving so Americans can fill up their SUV's with ethanol (I have read that the amount of corn used to make enough ethanol to fill up an SUV can feed a person for a year. That's really sad).

I really do worry what the energy and food situation will be like in American in the future. Without politicians to step up to the plate to promote real solutions that will solve the real problems, there won't be much real progress. At least there's grass roots people, like the Dervaes at the Path to Freedom, who really are getting people to change their lives. Individual people and grassroots organizations can make a difference, but federal mandates can be the real kick that is needed to get everyone moving.