On Common Ground: Don’t tax away gas price relief

Walter Nicklin’s editorial “Consume or Invest?” is memorably elitist. Who are these people he writes about who see saving money at the gas pump as an opportunity to have dinner at the Inn at Little Washington? Leaving aside the question of why he is once again casting the Inn in a negative light (“spending on personal consumption and instant gratification”), the “consume or invest” choice is a false one for the vast majority of Americans.

Average household income in America is in decline. According to the U.S. Census Bureau, in 2013 real median household income of $51,939 was 8 percent lower than in 2007. Falling gasoline prices have been the one bright spot this year in otherwise tight household budgets. Prices of basics like food, health insurance, college tuition and textbooks, elder and medical care have been soaring.

Moreover, Americans do a lot of things with their money that’s not “squandered on instant gratification” and would be considered investing in themselves and their families, like adding to their personal retirement accounts, saving for college tuition, paying off a credit card, or finally repairing their cars since too many people can’t afford a new one.

And is a federal gas tax even a good idea? Originally, the gas tax was designed to be “user pays” the theory being that if you drive a car or truck you ought to be paying for some portion of highway construction and repair. So far, so good. But it’s also a regressive tax, meaning everyone pays the same 18.4 cents per gallon regardless of income.

The federal gas tax also tends to redistribute money from poorer to wealthier states. Texas gets 88 cents back of every dollar paid in taxes while Washington, D.C., receives more than twice as much.

It is true that since 2008 federal Highway Trust Fund spending has outpaced gas tax revenues. But it’s not because of spending on roads and bridges and highway maintenance. Since the 1990s a growing portion of the HTF has been diverted to: subsidizing mass transit in just six metropolitan areas, ferries, streetcars and landscaping. The Wall Street Journal reports that if the HTF were to go solely towards highways it would be “98% solvent for the next decade, no tax increase necessary.”

Don’t forget that gas prices are notably volatile and that these low prices are unlikely to last. Let people take advantage of this breather while they can. Don’t tax it away. Let them invest in themselves.