Trading cheaper gasoline for bad roads is no bargain

Trading cheaper gasoline for bad roads is no bargain

Who wouldn’t love a tax cut, any tax cut?

Well, a whole lot of people don’t love the tax cut being touted by two of the three presidential candidates. Construction companies, for instance. Construction workers. Asphalt and cement companies. Civil engineers. Highway planning officials in almost every state in the union. The reason that those folks are concerned about a break in the highway revenue stream are obvious. Their livelihoods depend on the revenue from federal gasoline taxes.

And there are good reasons for just about everyone else to be wary of this tax cut. It is not overstating the case to say that every motorist’s life depends on the orderly collection and dispensing of federal gasoline taxes. At a time when the nation’s infrastructure is already strained (have we forgotten so soon last August’s collapse of a bridge in Minneapolis that killed 13 people and injured 145), this is not the time for a gas tax holiday.

The proposal by Sens. Hillary Rodham Clinton and John McCain may be good politics, but it’s bad economics and probably a false economy.

The idea is to suspend that 18.4-cents-a-gallon federal gas tax from Memorial Day to Labor Day, supposedly as a way of bringing some relief at a time many families take to the roads for summer vacation.

Pennies on the dollar

The actual benefits of the holiday are small, about $28 per motorist over the course of the summer, according to state transportation officials. And that’s assuming the tax savings are passed on to consumers and that the savings aren’t wiped out by further increases in the price of gas. Indeed, the tax holiday itself could drive up the price by increasing demand.

Clinton’s rival, Sen. Barack Obama, called the plan “a classic Washington gimmick.” It is also a gimmick Obama endorsed at the state level in 2000 as a member of Illinois’ Legislature. The suspension seemed to have no discernible effect, and the senator’s campaign says those dubious results are why he opposes it now.

Economists seem overwhelmingly opposed to the gas-tax holiday. Asked over the weekend about this lack of support, Clinton airily said, “I’m not going to put my lot in with economists.”

Perhaps she should listen to the people. A new CBS/New York Times poll found that 49 percent of voters nationally thought a gas-tax holiday was a bad idea; only 45 percent were in favor.

Or perhaps she should listen to her political muses, who would tell her that her plan to recap the lost sales tax through an excess profits tax has little chance of making it through Congress, and less chance of surviving a presidential veto.

The gasoline tax is one of those creatures of taxation that takes a relatively small bite from the average motorist but provides nearly $35 billion a year to the federal highway trust fund. That’s a lot of road and bridge construction — meaning a lot of jobs for people building those roads and bridges and a lot more safety and convenience for people driving on them.

It is particularly interesting to hear so-called fiscal conservatives argue for the tax holiday. They are, by and large, the same folks who argue that tuition subsidies for middle-class students simply drive up college costs. Yet they accept as a matter of faith that oil companies would take a more altruistic position on the fuel market place than those avaricious universities do in the education market place.

No one wants to pay any more for gasoline than is necessary, but trimming $200 off the fill-up of an average sedan at the cost of continued and orderly highway construction is penny wise and pound foolish.