Politics, as the saying goes, makes for strange bedfellows. Witness the national and state debates on temporary gas tax holidays. President Joe Biden on Wednesday went on national TV to lay out a series of proposals aimed at bringing down the price of gasoline, which is now close to $5 a gallon.
Within the multi-pronged plan is a proposal to suspend the federal gas tax for 90 days. That would theoretically take about 18 cents off the price per gallon, although pundits and experts are already proclaiming that the full 18 cents would not be realized because the petroleum industry is complicated and greedy, among other things.
In his talking points, Biden reached out to the governors and legislatures around the country, asking that they join him by cutting their own states’ gas taxes. The combination of a federal cut and a state cut, at least in Massachusetts, would amount to around a 42-cent-per-gallon, or around a $6 saving for a 15-gallon fill-up. In New Hampshire, the savings would be comparable to Massachusetts.
That is nothing to sneeze at. And it’s interesting, given that Biden — a Democrat — is singing the same tune as Republicans in the Massachusetts Legislature, who are pushing for a temporary cut to the state’s gas tax.
In recent months, several states — including Connecticut and New York — imposed temporary gas tax holidays. New Hampshire has been talking about suspending its 23-cent gas tax, but so far the legislation hasn’t passed.
In a letter to Massachusetts Democratic political leaders, a group of mostly Republican legislators called for suspending the 24-cent-per-gallon gas tax as part of a relief package that is expected to be taken up before the end of the session.
“Despite efforts to thwart the effects of outrageous prices at the pump, we have failed to act,” the lawmakers wrote. “We have failed to step down from Beacon Hill to consider the realities of those we have promised to represent.”
Senate Minority Leader Bruce Tarr said the GOP’s plan would “backfill” the projected loss of gas tax revenue with state surplus revenue. He said the state is flush with surplus revenue amid record-high tax collections and can afford to cover the estimated $300 million to $400 million loss to the state’s coffers.
“State revenues are wildly exceeding what we need to operate and the resources are present to support tax relief for those who work hard every day to pay the bills of state government,” the Gloucester Republican said. “Gas prices impact those families with the lowest incomes the most — but they are a burden for all of us.”
Biden, meanwhile, seemed to echo the comments made by Tarr, noting that the country can afford the loss of revenue from the gas tax.
“With the tax revenues up this year and our deficit down over $1.6 trillion this year alone, we’ll still be able to fix our highways and bring down prices of gas, we can do both at the same time,” he said.
While approval of both the federal and state gas tax holidays seems like an uphill battle, these are difficult economic times that demand difficult decisions. Even if it’s temporary, and even if it’s not a lot of money saved per fill-up, the combined federal and state gas tax holidays would be good for consumers and ultimately the economy.
Inflation continues to run high, but Americans are also still spending at a pretty healthy clip. If the price of gas were to go down, even slightly, that’s more disposable income in the pockets of U.S. citizens, which is good for the country and the world.