HARRISBURG, Pa., May 12 /PRNewswire-USNewswire/ -- In addition to Sen. John McCain's proposal to suspend the federal gasoline tax for the summer -- subsequently embraced by Sen. Hillary Clinton -- there now is a similar proposal making the rounds in the General Assembly. The Transportation Construction Industries coalition, Pennsylvania's largest association representing the highway construction industry, presents the following data to show that suspending gas taxes would have far-reaching negative consequences while benefits to motorists would be negligible:
-- Suspending the gas tax would put very little money into individuals'
pockets. If you drive 15,000 miles per year in a car that averages 25
miles per gallon, you consume 600 gallons per year, or 50 gallons per
month. For the three months that the proposed "gas-tax holiday" would
be in effect, your savings from suspending the 18.4-cent federal gas
tax would total $27.60.
-- Pennsylvania would lose $400 million in highway funding. According to
PennDOT, Pennsylvania's highway funding program would lose $400 million
as a result of the proposal to suspend the federal gasoline tax, nearly
doubling the existing funding gap in a year in which catastrophic
bridge failures have already shut down the Birmingham Bridge in
Pittsburgh and I-95 in Philadelphia for days at a time.
-- Pennsylvania would lose 12,000 jobs. According to the Federal Highway
Administration, every $1 billion spent for highway projects creates
approximately 30,000 jobs. A $400 million loss in highway funding
would mean a reduction of approximately 12,000 jobs in the
Commonwealth.
-- Gas prices could actually go back up as demand increases. Economics
101: reducing the price increases demand. As demand increases, so does
the price. The price at the pump could quickly return to the pre-
"holiday" level, resulting in little or no savings to individuals,
while oil company profits increase by the amount formerly spent to
maintain the highway system. Internationally renowned futurist and
business strategist Peter Schwartz describes this scheme as, "Maximize
demand, minimize supply and buy the rest from the people who hate us
the most."
-- The consequences of suspending Pennsylvania's 32.3-cent per gallon
gasoline tax along with the federal tax would be as follows:
approximately $1.1 billion in lost highway funding and a reduction of
33,000 Pennsylvania jobs, while the highway system continues to
crumble. The total savings for the typical motorist if all gas taxes
were suspended would be $76.05 for the summer -- assuming that the law
of supply and demand would also take the summer off, thus allowing
prices to remain at their reduced level.
In summary, a "gas-tax holiday" would save the public little -- if any -- money, while worsening the condition of our highway system, which is already in poor shape. The industry urges our political leaders to abandon this and other gimmickry and focus on developing a vision for our future mobility. Only then can we begin to solve this very important problem, assuring a more prosperous future and a greater quality of life.
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