Americans Need More Than a Gas Tax Holiday | Citizens Against Government Waste

Americans Need More Than a Gas Tax Holiday

The WasteWatcher

As fuel prices have continued to rise to record levels, several states have tried to alleviate the costs to consumers by temporarily suspending their gas taxes.  These gas tax “holidays” underscore the high costs of the Biden administration’s failed energy policies.  

On his first day in office, as part of his “green energy” policies, President Biden issued an executive order to stop the Keystone XL Pipeline, which would have transported 830,000 barrels of oil daily from Alberta’s oil sands to American refineries, along with an executive order directing the Secretary of the Interior to impose a temporary moratorium on the Coastal Plain Oil and Gas Leasing Program, which has allowed the Bureau of Land Management to lease land in Alaska for oil and gas extraction.  Soon thereafter, he issued another order to pause oil and gas leases on public lands and waters.  These policies changed the United States from an energy independent nation into dependent on oil from other countries.

The President’s policies on oil and gas, along with the massive increase in federal spending that has been the proximate cause of near-record inflation, have resulted in a dramatic increase in the cost of gas.  When President Biden took office on January 20, 2021 the national average cost of a gallon of gas was $2.20.  Within five months, the average cost had risen to $3.08 per gallon.  By April 2022, the national average cost for a gallon of gas had nearly doubled from its January 2021 total to $4.32 per gallon.

The White House has taken, or considered, several steps that it believes will help to lower gas prices.  On March 31, 2022, President Biden announced a plan to release 1 million barrels of oil per day from the strategic petroleum reserve (SPR).  It will take weeks for this policy to have any sort of tangible effect on everyday Americans, and it does not solve the longer-term problems.  Those issues will also not be resolved by negotiating with countries like Iran and Venezuela for more imported oil.

The administration considered, but then ruled out, the possibility of spending billions of dollars to offset the issues it created by mailing gas cards to Americans.  The proposed gas cards would hardly put a dent in the added cost to consumers of rising gas prices, which are estimated to be $2,000 per year.

The President has also offered what might be called his Marie Antoinette policy:  Let them buy an electric car.  In his announcement that the administration would be tapping into the Strategic Petroleum Reserve, the President stated that, “A typical driver will save $80 a month from not having to pay gas at the pump.”  These remarks reflect his utter disconnect from reality.  

According to Kelley Blue Book, the average cost of a new electric vehicle in November 2021 was $56,437.  By comparison, the average American brought in $65,836 in wages before taxes and expenses in 2019.  As prices continue to rise across the board, few if any Americans can afford to buy a $56,000 car for the comparatively meager savings of $80 a month.

The Department of Energy calculated show that it takes 15 years for an electric car to cost less than gas-only cars, since the total cost of ownership, not just fuel costs, determines which is less expensive over time.  Based on the average lifespan of a car, which is 200,000 miles, the savings would be $4,380, or $292 annually (less than $1.00 per day) over 15 years.  And electric cars do not go as far without the need to be recharged as gas cars can go without the need to be refilled. These calculations fail to consider the value of someone’s time waiting at a charging station. Consequently, consumers could experience either no savings or even a loss once the extra time to recharge is considered.

The Biden administration has not only proposed subsidizing electric cars, including extra subsidies for those made in unionized factories, but also provided money for electric vehicle charging infrastructure.  The Infrastructure Investment and Jobs Act included $5 billion for charging stations and the fiscal year 2023 budget calls for another $1.4 billion.  The Build Back Better Act, which passed the House, has a $7,500 tax credit for new electric case, which rises to $12,500 if the cars are made by unionized workers. 

Instead of allowing America to remain energy independent, the Biden administration has doubled down on policies that have led to high prices at the pump while cutting off commonsense responses at the knees.  While states should be commended for attempting to reduce costs for their residents, they should not respond to misguided federal decision making with temporary policies that will not solve the underlying problems.  The American people deserve far better from their federal government.  

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