Opinion: Don’t Roll Back the Gas Tax

May 16, 2008

By Richard G. Little

As the presidential candidates trip over themselves with proposals to roll back the 18.4 cents per gallon federal gas tax for the summer to provide “relief” to America’s drivers, some simple arithmetic is in order.

If someone drives 2,500 miles a month in June, July and August in a vehicle that gets 20 miles per gallon, his savings under a rollback would be a total of $69 — not much, but something.

On the other hand, the cost to the Highway Trust Fund (where federal transportation funding comes from) would be staggering. If just a quarter of the estimated 250,000,000 passenger vehicles in the U.S. took advantage of the “gas tax holiday,” more than $4 billion in funds would be lost — funds desperately needed to rebuild America’s highways and bridges.

Putting aside other reasons not to encourage driving — like greenhouse gases, global warming and $1,300 for the $3.50 per gallon gasoline to drive those 7,500 miles — with economic thinking like this, we don’t have to dig too deep to find the roots of the sub-prime crisis, do we?
 
Richard G. Little is director of USC’s Keston Institute for Public Finance and Infrastructure Policy. He is an expert on utility and energy issues, infrastructure and public finance.