Tax Policy Special Report
Navigation Bar
Navigation Bar


TAX POLICY
 Overview
 Key Stories
 Opinion
 Game
 Links &
 Resources
 Talk
 Special
 Reports


  blue line

. . . And Blinking at Responsibility

By Charles S. Robb
Wednesday, May 8, 1996; Page A25


From a statement in the Senate Monday by Sen. Robb (D-Va.):

I rise to address the majority leader's announced intention to introduce legislation that would repeal the 4.3-cents-a-gallon tax on gasoline that this body passed as part of the 1993 budget bill. Repealing a tax – any tax – and particularly a tax consumers are reminded of every time they fill up their cars at the pump, is unarguably attractive as a matter of raw politics, but it is terrible as a matter of public policy. Just when we're beginning to make sustained progress on bringing down the deficit, just when we are within reach of actually balancing the budget in seven years and making a serious and principled commitment to real fiscal responsibility, we blink. We can't take the political heat. Well, on something this important to our nation and our children's future, if we can't take the heat we ought to take President Truman's advice and get out of the kitchen.

We talk about a market economy, but we won't let the market work. The federal government has an important role to play in our lives, but it cannot and should not attempt to solve every problem we confront – particularly when to save the average motorist $27 a year we move in precisely the wrong direction on the more important challenges of energy independence, national security and fiscal responsibility – and send the wrong signals to our allies and others around the world about whether or not we are serious.

I hope that a majority of our colleagues will have the political courage to resist what will undoubtedly be an extremely popular bill, and if we don't, that the president will be willing to demonstrate the intestinal fortitude we lack – as he did in proposing the tax in the first place.

In my view, a $30 billion tax repeal shouldn't even be considered in the absence of meaningful action on our long-term budget problems. The 1993 deficit reduction package, which contained this modest gas tax and had no support on the other side of the aisle, has made a substantial dent in our annual deficits, making balance in seven years possible. In the absence of that deficit reduction effort, we probably wouldn't be discussing seriously the idea of actually reaching balance in such a relatively short period of time. Even with that 1993 effort, however, trying to reach balance has been a monumental task. A number of us in the bipartisan group of senators referred to as the Centrist Coalition have been working for months to find a balanced-budget compromise, and a repeal of the 4.3-cents-a-gallon tax will only complicate our efforts to balance the federal budget by sometime early in the next century.

Not only would the repeal move us in the wrong direction as far as balancing the budget is concerned, it wouldn't solve the problem of higher gasoline prices. If the energy companies are culpable, I have no desire to take them off the hook, but prices have been rising because the demand for fuel has been rising while production has fallen short of this need. Quite simply, the evidence suggests that demand is rising as Americans are driving further, at higher speeds, in less fuel-efficient vehicles. Supplies have been curtailed because of a longer winter that kept refiners producing heating oil longer than expected and delayed their shift to gasoline, and fuel inventories were also allowed to remain low because of an anticipated release of oil from Iraq that simply hasn't come to pass.

The fact of the matter is that the recent price increases aren't due to a 4.3-cents-a-gallon tax increase that was put into law three years ago. That 4.3 cents a gallon is no more responsible for the recent increase in gas prices than it was responsible for the low gasoline prices we've enjoyed for the previous two years when the measure was also in effect.

If we take the oil companies at their word that recent gas prices are the result of demand outstripping supply, then the last thing that we should be considering is a repeal of the 4.3-cents-a-gallon tax, which would simply further push up demand. For those of us who believe that a higher gasoline tax is a necessary element of sound public policy because it encourages conservation and it reduces our dependence on foreign oil, a repeal of this tax would be totally inappropriate.

I fully understand that rejecting politically popular tax cuts in an election year represents a tough choice for legislators, even if this tax repeal would involve less than $30 a year for the average motorist. But if there is a good public policy reason for the tax in the first place and a repeal won't be likely to dramatically affect the perceived problem, it shouldn't be that tough a choice.

© Copyright 1996 The Washington Post Company

Back to Top

Navigation Bar
Navigation Bar
 
yellow pages