Gas Tax Holiday from Reality

For those of use not living under a rock for the past few months, we are all quite aware of both Senator McCain and Senator Clinton’s promises, should they be elected (one at a time, folks), that they would push for a temporary gas tax holiday. The idea, of course, is to offset the meteorically rising costs at the pump so that people can enjoy their summers in a manner as close to what used to be normal as possible.

As a consumer, and someone who enjoys driving probably as much as any revving, fist-waving, windows-down American, it’s a nice thought. And in all practical terms, it could very well be a real attempt - beyond charges of base political pandering - to give American consumers what little reprieve possible.

But that doesn’t change the fact that it’s a poor, poor idea. As someone who has bemoaned the externalities of cheap gasoline many a time, I can’t say that the idea of the government rigging policy to reduce prices temporarily is desirable. Let’s face it - the era of cheap gas is coming to a close, and it’s well past time for us to readjust accordingly. That doesn’t mean a Prius in every garage, but actually reforming the predominant land-use configuration of this country congruent with the realities of the market. In other words, we need to wean off automobile dependence. It won’t be easy, and it won’t be cheap, but it might very well be the most economical, pragmatic avenue (no pun intended) for us to take. And the market is already reacting accordingly - perhaps not as quickly as some of us would like - but it’s happening; from the increasing popularity of public transit and transit oriented developments to changing car habits, consumers are doing what they can to adjust to the changing conditions, as should have been expected. We may not be rational creatures, but a society can make freakishly rational decisions when it comes to their pocketbooks.

To this end, any effort by the government to artificially reduce the costs of gasoline will only push back the timetable for much-needed reform that is better to happen sooner rather than later. Moreover, as an open letter by some 200 economists indicate, castrating the federal gas tax is tantamount to trashing much needed revenue streams to maintain existing highway infrastructure, much of it badly in need of maintenance. It’s simply poor public policy.

In the spirit of open mindedness, however, I am willing to concede this: even if it may be deleterious in the long term, we should not discount just how popular this idea could be. Any relief from skyrocketing prices will immediately benefit the millions of Americans whose livelihood depends on that gas guzzler, or who don’t have reliable access to public transportation (if at all). Even if land use configurations begin to change, it’s certainly not something that can be fixed overnight. There are many people who need help now.

But it doesn’t change the reality. For all we know, gas prices may overtake the canceled tax margin before it makes any difference anyway. Either way, people are going to suffer, and it’s best to get through it now rather than wait around for a miracle in energy prospecting that’s not likely to happen. What SHOULD happen, however, is that money be increasingly appropriated to public transportation projects instead of our continued insistence on road building; make no mistake, even with prices like they are, there are still hundreds - probably thousands - of road-building and expansion plans to be paid for with federal dollars. I say these need to be immediately reviewed against the context of, well, this brand new context.