What’s up with the gas tax holiday?

Sunday, September 18th, 2005 at 2:03 pm | In Politics, Wisconsin |

After reading the article “It Is Time for a Gas Tax Holiday” by WI State Senator Mary Lazich (R - New Berlin) on WisOpinion.com, I sent her an e-mail expressing my concern with the proposal:

Dear Senator Lazich,

I read your article on the gas tax holiday and felt the need to
respond. Although it is true that the gas tax holiday would save
motorists over $100 million, that would be $100 million less that the
state could spend on health care, education and property tax relief.
republicans have been complaining that we spend too much on education,
that property taxes are too high. Taking more money from the state is
probably not the way to go about solving these problems.

The individual savings from the gas tax holiday to individuals and
families will be negligible. Filling up a Ford Explorer with a 22.5
gal. gas tank 5 times during the 30 day period would only save the
owner $16.88.

That savings is not enough to balance a loss of over $100 million in state
funding at this time.

If you truly care about lowering gas prices, I urge you to support the
repeal of the minimum markup law so as to eliminate an artificial bump
in gas prices. The law does little to protect “mom and pop” gas
stations today (I don’t remember the last time I saw an “independent”
gas station) and isn’t necessary to cover the cost of credit card
transactions.

Thank you for your time.

Mike Westling

Here is the e-mail I got in response:

Hi Mike,

Thank you for your e-mail. Wisconsin is a high tax state. We lose
population and taxe revenues because people flee the state. If we
reduce taxes, maybe more people will stay here and the economies of
scale will benefit all Wisconsinites. The price of gas is hurting
people. If affects food and clothing purchases as well as health care
purchasing.

Senator Mary Lazich

In response to Sen. Lazich’s response, I first need to say that I agreed that there was a problem with high gas prices… I simply don’t believe that a tax holiday is the correct solution.

Secondly, it sounds as though Sen. Lazich’s economic basis for the plan is pretty shakey. Just banking on the fact that “maybe” people will stay in the state if we reduce taxes is risky in my book. I dont know if many economists would support tax cuts simply based on the reasoning that “maybe people won’t leave”. I need some more evidence to convince me that this would make a positive impact.

Correct me if I’m wrong, but I doubt that an extra $17 is going to be the difference between someone leaving the state or staying here. Now, taking an extra $100 million from the state budget… enough to fund an entire school district in, say, Florence… that might piss someone off enough to leave.

Gas prices are high around the country… this particular issue shouldn’t be dragged into the Republican agenda of cutting taxes so that richer consituents can keep a few extra bucks in their pockets while those who can’t afford private education suffer for lack of public funding.

Yes, Wisconsin is a high tax state. I’m not saying that we should never cut taxes… I’m just saying that it’s probably not the best idea in this case. It’s a PR friendly political publicity stunt that generates a lot of press (holiday just makes me feel warm and gooey inside), but it’s poor public policy that won’t do anything to relieve the underlying problem. Just because it sounds good and is popular doesn’t make it a good idea. Not too many are going to say “no” to an extra holiday.

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  1. […] The Wausau Daily Herald published an editorial Sunday expressing essentially the same opinon that I shared on The New Vernacular in September. The Daily Herald adds a detail that I missed in my critique: the $30 million in tax dollars lost during the holiday would come directly from the state transportation budget. The state would either need to cut funding for transportation or get that money from somewhere else. And as the budget debates this summer show, the state coffers aren’t overflowing with extra cash. Why is that a bad idea? For starters, the bill would eliminate the tax but not the annual increase built into the state’s transportation budget. See, every penny of Wisconsin’s gasoline tax is dedicated to road construction, repair and maintenance. Those costs keep increasing, so the transportation budget keeps increasing. […]

    Pingback by The New Vernacular » I’m not the only one who thinks the gas tax holiday is a bad idea — October 31, 2005 #

  2. […] September 18, 2005: What’s up with the gas tax holiday? […]

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