Oppose Temporarily Suspending the Gas Tax

Background:

• Suspending the gas tax will not help consumers or the future of our nation.  It is bad transportation policy, bad energy policy and bad economic policy.  While superficially attractive, suspending the gas tax will not address the root cause of our gas price problem today, which is a complex combination of many factors.  It is really nothing more than political gamesmanship.

AGC Message:

• Suspending the Gas Tax Will Not Help Consumers.  A gas tax suspension will not necessarily result in lower gas prices.  There is no guarantee that any of the savings will be passed on to consumers.  The federal gas tax of 18.4 cents per gallon makes up just a small portion of the price of gas (about 6 percent, assuming a price of $3.00 per gallon).  Thus, even if the savings were passed on to consumers, they would be minimal.
• Suspending the Gas Tax is Bad Transportation Policy.  A gas tax suspension would violate the sanctity of the Highway Trust Fund.  This would undermine this trust by putting at risk billions of dollars of necessary investment in our nation’s highway and transit infrastructure.  All motor fuel user fees (gasoline and diesel taxes) are deposited into the Highway Trust Fund.  And thanks to TEA-21 and SAFETEA-LU, all of those revenues are guaranteed to be spent on highway and transit improvements.  As a result of the loss of revenue from a temporary or permanent repeal:
  • States and localities could face significant reductions in spending for transportation planning, highway and bridge repairs, public transit, bike and pedestrian facilities, clean air programs, and, most importantly, highway safety.
  • Construction of congressionally-designated projects of national significance would also be affected.
  • Without a predictable flow of federal transportation funds, states and localities may face more difficulty in long-term transportation planning, which will cause projects to be more costly and result in safety concerns.
  • Highway and bridge improvements that have already been delayed for nearly two years while Congress debated the reauthorization of TEA-21 will be further delayed by a gas tax suspension.
  • Any modest savings a motorist may receive by suspending the gas tax will be offset by an additional average $401 per year in increased maintenance and reduced fuel efficiency resulting from reduced road improvements.
• A Gas Tax Suspension is Bad Energy Policy.  A feel-good gas tax suspension is no substitute for a comprehensive energy policy that decreases our dependence on foreign oil.  This will not do anything to increase our fuel supply or curb demand for fuel during this crisis.
• A Gas Tax Suspension is Bad Economic Policy.  A gas tax suspension would reduce federal revenue, thereby increasing the federal deficit.  The suspension could hurt the economy by putting at risk billions of dollars of investment.  Again, with the economy suffering from the effects of last year’s hurricanes, this is the wrong time to be disinvesting in the nation’s infrastructure.

Additional Information:

• 04/15/2008 - Press Release: McCain's Proposed Moratorium On Gas Taxes Should Be Dead On Arrival
• 04/16/2008 - Letter: Transportation Construction Coalition Letter to Congress on Opposing McCain’s Gas Tax Proposal

• H.R. 1569 - Gasoline Tax Relief Act of 2007
  03/19/2007 - Introduced
• H.R. 2415 - Affordable Gas Price Act
  05/21/2007 - Introduced
• H.R. 2448 - Emergency Gas Price Relief Act of 2007
  05/23/2007 - Introduced
• H.R. 2480 - Gas Price Relief Act of 2007
  05/24/2007 - Introduced