SLOCOMB, Ala. — Gov. Charlie Crist of Florida has been fighting to cut 10 cents from the state’s gasoline tax for two weeks in July. Lawmakers in Missouri, New York and Texas have also proposed a summer break from state gas taxes, while candidates for governor in Indiana and North Carolina are sparring over relief ideas of their own.þþIf experience with such gas tax “holidays” is any guide, drivers would save less than politicians suggest. But that is not necessarily the point.þþ“It’s about trying to serve the people and trying to understand and have caring, compassionate hearts for what they’re dealing with at the kitchen table,” said Mr. Crist, a Republican.þþHe added, “I’m supposed to respond to the people and try to make them happy.”þþRising frustration with gas prices has led two presidential candidates, Senators John McCain and Hillary Rodham Clinton, to promote proposals to suspend the federal gas tax from Memorial Day to Labor Day. þþBut state gas taxes, which run as high as 45.5 cents a gallon, often add far more to the price of gas than the 18.4-cent federal excise tax and are the primary cause of price disparities across state lines. So lawmakers and candidates at the state level have been getting into the act.þþThe response speaks not just to the reality of skyrocketing gas prices. It also highlights the political potency of anything that affects Americans’ bonds with their cars. Gas is a product that no one can ignore — and one that inspires intense emotion. þþ“It clearly evokes a visceral response because we’re the only industry that has our prices in two-foot-high letters on the street corner,” said John Felmy, chief economist at the American Petroleum Institute. “We’ve seen other things go up in prices, like milk, but if you ask 10 people on the street what’s the price of milk they may not know. All of them will know the price of gas.” þþThe gut-level frustration is especially visible at gas stations near borders between states with wide differences in gas taxes. The pumps here have the feel of a discount store, flush with bargain hunters and families on the edge of an economic precipice. þþAt two gas stations in southern Alabama, at least half the cars were from Florida, where gas taxes are 13 cents higher. A similar flow of California drivers appeared last week at gas stations in Yuma, Ariz., where gas can be more than 70 cents cheaper a gallon.þþMany said that in the last few months, they had reached a breaking point with gas prices that had forced them to change their lifestyle. þþRebecca Laster, a mother of four from Campbellton, Fla., near the Alabama line, said she now stayed near her children’s school after dropping them off to avoid a second trip. þþ“Gas takes up a majority of what I spend,” Mrs. Laster said after putting $40 worth of gas in the tank of her minivan. Referring to politicians, she said: “I don’t think they know what it’s like to count every penny. They’ve never been in that position.”þþEconomic studies have shown that high gas prices disproportionately affect lower-middle-class Americans like Mrs. Laster, whose family lives on her husband’s salary from McDonald’s. And these appear to be the voters politicians are trying to appeal to. þþOne of the Democratic presidential candidates, Senator Barack Obama of Illinois, has criticized the gas tax holiday as a gimmick, saying it would save drivers little money.þþBut his Democratic rival, Mrs. Clinton, and Mr. McCain, the presumptive Republican nominee, have defended their plans with emotional appeals. A recent Clinton advertisement highlighting her support for a summer gas tax suspension ends with a raspy, apparently working-class narrator saying: “People are hurting. It’s time for a president who’s ready to take action, now.”þþSuspending federal and state gas taxes, however, would not necessarily lead to a commensurate drop in prices. þþSince 2000, four states have enacted gas tax holidays: Florida, Georgia, Illinois and Indiana. In general, retailers did not pass on all of the intended savings. þþWhen Illinois and Indiana suspended about 7 cents of their state gas taxes in the summer of 2000, prices fell by an average of only 4 cents, according to a study by the American Road and Transportation Builders Association, which opposed the plans. Drivers saved no more than $2.50 a month, while each state lost tens of millions of dollars in tax revenue. þþPrevious gas tax holidays caused other problems, too. During the last gas tax suspension in Florida in 2004, people hoarded gasoline, driving up demand and prices. þþIt is not clear how the new proposals would prevent such unintended consequences. Texas lawmakers are not in session, so their ideas have been limited to public calls for relief. þþThe draft measures in Florida, Missouri and New York do not require retailers to pass on the tax suspension to consumers, nor are there provisions to prevent hoarding. þþThe New York plan, sponsored by Republicans in the State Senate, would suspend three state gas taxes, amounting to about 32 cents per gallon, from Memorial Day to Labor Day. þþThe Florida plan would create a tax holiday around July 4, cutting 10 cents per gallon off the 33.2 cents in total state gas taxes. þþ
Source: NY Times
