Grocery prices getting hard to swallow
Where's my stimulus rebate?

Savings from suspending state gas taxes

The debate between presidential candidates and economists over the efficacy of a temporary suspension of the federal gas tax rages on and likely will continue at least through the summer vacation season.

Gas_canBut, as noted in this earlier blog, state gas taxes add much more to the price of a gallon of gas than the 18.4 cents per gallon that goes to Uncle Sam.

So some state politicians, seeing a chance to get in on the demagoguery, also are calling for reductions at that level.

According to a story in today's New York Times, lawmakers in Florida, Missouri, New York and Texas have proposed a summer break from their states' gas taxes. Candidates for governor in Indiana and North Carolina also are sparring over fuel price relief ideas.

The legislators, both already in office and those hoping to be, know what the number crunchers are ignoring:

"The [political] 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."

Motorist savings per state: In addition to the story, the Times' has a nice table that estimates the savings per driver in each state and the District of Columbia if the jurisdictions took a summer break from their gas tax collections.

California motorists would net the most, with potential savings of $81.07 if the Golden State's 46 cents per gallon levy was suspended in June, July and August.

The smallest boost to a driver's bank account would be in Washington, D.C., with motorists there realizing only $12.26 in savings for those three months. That's 88 cents less than what drivers in Alaska would pay even though the 49th state's gas tax is only 8 cents a gallon vs. 20 cents a gallon in the nation's capital.

The difference comes because in calculating the estimated savings, the Times looked at not only the state tax rates, but also the number of drivers and the average amount of gasoline sold in each state during the summer.


Feed You can follow this conversation by subscribing to the comment feed for this post.

The comments to this entry are closed.