Tag Archive for: FederalGasTax

Why Cutting the Gas Tax is a Bad Idea

Estimated Reading Time: 4 minutes

Biden says he will request a three-month reduction in the Federal gas tax and urges states to follow as well. At one time Barak Obama called this idea a gimmick. Obama was right.

Certainly, one can understand why. The increase in fuel costs is hurting everyone, including those at the bottom of the income scale the Democrats say they are concerned about.The public is howling, with about most people polled blaming Biden and the Democrats. Most do not feel it is the fault of the greedy oil companies or Putin. These energy companies that just more than a year ago provided us fuel at half the cost did not just discover profits. They pursued profits when energy was cheaper, as they should.

And, if you have been paying attention, energy costs started to rise after the election and were well on their way higher before Putin invaded Ukraine. No, high energy costs are clearly the consequence of Democrat policies that began years ago but culminated with the election of Biden. As the sticker says, he really did do that!

High fuel costs are altering, if not canceling, vacation plans. They are increasing the price of food and everything that is shipped by rail, air, ship, or truck.

Democrats are looking to “do something” to ease the pain because of the fall congressional elections. But the consequences will be found for years in higher home heating oil prices, higher food prices, higher electricity prices, and reduced industrial production. Economic growth relies on the access to competitively priced energy, where energy sources are determined by engineers and the market, not environmental departments at universities and politicians.

When the world moved from wood to coal, from coal to oil, from horses to cars, from kerosene to electricity, it was entrepreneurs operating with the voluntary forces or profit and loss that made the determination. At the turn of the century, we had electric cars, steam-powered cars, and the internal combustion engine, all competing with one another. We had Westinghouse and Tesla competing again Edison. Let that process work today.

What we have now is a top-down, centrally planned forced conversion to different energy systems based on biased research about CO2 and its role in temperature changes. It is what Biden calls a “transition.”

Republicans should not accommodate Biden for the following reasons:

As a tactical matter, do not provide your opponent help when he is hurting himself. They don’t deserve the assistance and it is politically stupid to help them.

We should replay as often as possible all the campaign promises where Democrats pledged to put the oil and gas industry out of business. We should further explain that this has been a long-standing goal of Democrats going back at least 20 years with Al Gore and his inconvenient blunders.

We should explain to the public how the  ESG movement starves energy corporations of capital and reduces supply. Ideas have consequences. The explanation of why these ideas are bad has more weight when people feel the consequences of bad political and scientific decisions. There is nothing quite like pain and fear to focus one’s attention.

This blowback from high prices needs to be unleashed not just on the politicians but the university departments, the environmental industrial complex, and environmental organizations. This has been their multi-year project and we now see the consequences.

More importantly, reducing a tax does not produce one bit of additional energy. Rather, it gives the Democrats the appearance that they care, while they impoverish us all in their Green New Deal fantasy. 

No, let the reality of what they are doing sink in. Many of the people who voted for Biden need to see reality by experiencing the consequences of destroying an industry before better alternatives are created. It is time for tough love. Democrats are reducing our standard of living deliberately to force their ideas on “climate change.” The collateral economic damage is felt by all, but especially by many who voted for Biden.

That pain is a positive thing because it will create political change.

It is the same with the release of oil from the strategic oil reserve. Such action produces no energy and further, uses what is supposed to be a “strategic reserve” intended for when the country is involved in war or confrontation with a hostile energy producer like Iran or Russia. That is a misuse of the purpose of that reserve. It is not a political piggy bank to be drawn on when Democrats are in trouble.

We could have gotten almost an equivalent amount of oil from Canada simply by completing pipelines that were already well on the way to completion.

Releasing oil from the strategic oil reserve, and cutting the gas tax, are all calculated steps to distract us all from the real problem:  the US has immense energy reserves and Democrats stand in the way of them being utilized. It is painful for us all, but we must let that reality be driven home.

There are additional problems as well. This revenue goes to the highway trust fund and is needed for vital infrastructure improvement. We should not let that trust fund be raided by politicians seeking relief from their own policies.

That money will have to be made up somewhere. Thus, the loss in revenue has to come from somewhere, higher taxes elsewhere, or increases in the deficit that adds upward pressures on inflation and interest rates.

Finally, the amount of 18 cents for gasoline, and 24 cents for diesel, is hardly enough to provide relief and it will be only temporary relief at best. We have seen the price of gas go up that much in a day or two.

I drive a mid-sized pickup that averages about 18 miles per gallon, for city and highway.  I drive about 10,000 miles a year. So, let’s do the math. At 18 miles per gallon, that is about 555 gallons per year.  Saving 18 cents per gallon would save me about $100 for a year.  The three months proposed would equal about $25 of total savings.  C’mon man.  I am not worried about the $25, I am worried about Biden’s energy policy costing me more for gas, electricity, and propane, for the rest of my life and for my children and grandchildren.

In summary, it is a political gesture with no meaningful benefit other than to help Biden.  He doesn’t deserve it.

If we really want to have a sane energy policy that keeps prices low for consumers,  the Democrats need to lose.  We should see that they do.