Gas tax holiday good politics, not policy
A gas tax holiday may be good politics but it’s not good public policy, according to Evan Horowitz, executive director of the Center for State Policy Analysis at Tufts University.
President Biden last week proposed the temporary elimination of the 18.3-cent federal gas tax and urged states to do away with their gas taxes as well to provide some relief to drivers at the pump.
Gov. Charlie Baker sided with Biden, saying Massachusetts is so flush with cash that it can afford to eliminate the state’s 24-cent gas tax and still have plenty of money available for additional, more permanent tax cuts.
Horowitz said on The Codcast that the problem of high gas prices is a real one, and it’s not unreasonable to return some of the state’s surplus cash to taxpayers. But he said a gas tax holiday doesn’t really address the underlying problems causing high gas prices and predicted the price of a gallon of gas wouldn’t drop by 42 cents a gallon if both the federal and state taxes are eliminated.
Horowitz said the president and the governor know a gas tax holiday will have limited impact. “There’s a reason that the Biden administration still endorsed this policy,” he said. “It’s not because he’s surrounded by people who think it’s a great economic policy. It’s because he’s surrounded by people who know it’s good politics. People are hurting and you want to demonstrate that you hear them, care about them, and you’re doing something.”
Horowitz said some might say it would be better to take advantage of the high gas prices by subsidizing alternatives like electric vehicles or solar panels rather than trying to lower the price of gasoline.
“You’re still creating an incentive for people to drive more,” he said of a gas tax holiday.
Policy wonks differ on whether tax cuts are even warranted. The liberal-leaning Massachusetts Budget and Policy Center has made the case that the state’s current surplus isn’t as big as it appears and available funds should be used to address unmet needs.
The Center for State Policy Analysis thinks the state can afford tax relief. It issued a short paper detailing the dos and don’ts of cutting taxes – directing a tax break to people who really need it, making sure the tax break enhances the state’s competitiveness, and, to be on the safe side, going with temporary tax cuts when possible.
“The big challenge is time,” said Horowitz, noting the tax cut discussion has been kicking around Beacon Hill for six months yet no proposal has emerged yet from the Legislature.
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FROM AROUND THE WEB
The size of Worcester’s homeless population jumped by 43 percent this year to nearly 500 people as the city seeks to address a lack of affordable housing. (Telegram & Gazette)
Violent crime is decreasing in Worcester, a fact city officials attribute to active youth outreach and efforts to get guns and drugs off the street. (MassLive)
Adams rescinds bylaw requiring every new residential unit to have a garbage disposal. (Berkshire Eagle)
Physical improvements are ongoing at the ailing Springfield courthouse, with a deep clean scheduled for July 4 weekend. (MassLive)
Congress is moving on a bill co-sponsored by Rep. Lori Trahan that would require doctors to have better training to recognize the symptoms of opioid addiction. (Eagle-Tribune)
Opponents of the law giving driver’s licenses to immigrants without legal status accuse Attorney General Maura Healey of deliberately slow-walking the process of approving a referendum to overturn the law on the November ballot. (Boston Herald)
Democrats see the overturning of Roe v Wade as a winning issue for them to turn voters out in the midterm elections, while Republicans seek to keep attention on crime and economic issues. (Washington Post)
Dan Kennedy worries about the collapse of politics in Massachusetts. (Media Nation)
A Boston Globe editorial blames Boston Mayor Michelle Wu for the failure to break a deadlock between the city and state over oversight of the Boston Public Schools.
School bathroom closures are becoming a divisive issue as school administrators keep the facilities locked for longer portions of the day to prevent vandalism and vaping. (Boston Globe)
Tanisha Sullivan, a candidate for Secretary of State and head of NAACP Boston, raises concerns that neither of the two finalists for the Boston school superintendent position are Black or Latino. (Boston Herald)
The high prices for gasoline are a reflection of tight refinery capacity brought about by COVID and the overall trend lines in the economy away from fossil fuels. (NPR)The Baker administration distributes grants to 60 communities to help them lower their energy usage. (Eagle-Tribune)
The Pittsfield Suns offer free admission to anyone who brings an empty nip bottle to the game. The promotion comes as Pittsfield is considering a ban on the sale of nip liquor bottles, which often end up tossed on the ground. (Berkshire Eagle)